Evening journal., 1917-02-12

United States, after paying operating
expenses and taxes, nave retained
during the last ten years. and espe-
cially during the last six years,
smaller part OF their total earnings
than was ever tho case before since
complete statistics regarding their
operations and results have been
kept" says the Railway Age Gazette.
"phls remarkable aud significant fact
IS disclosed by analysis OF statistics
for the last % years published by the
Interstate Commerce Commission In
us annual report FOR the calendar year
1916"
met operating income is what the
roads have left after paying their OPP
Grating expenses and taxes, and,
therefore, is the total amount which
they can use in paying interest and
dividends, and can spend on improve
ments made from earnings. The per-
centagc OF operating income TO total
operating revenue Is, therefore, very
interesting and Illuminating figure.
When I'm a given year II is 80 per cent.
for example, u means that in that year
the railways We're able TO keep out OF
each dollar they earned 30 cents TO be
and in making improvements.
"Tho statistics which the Commits
sion publishes show that the percent
ago OF operating income to total op-
Grating revenues has varied during
the last 26 years from maximum OF
1913. which was reached IN 1903, TO
minimum OF 22.65. which was reach
cd IN 1914. Figures for individual
years are not, however, no instructive
as those for periods OF years. There
fore. the Commission has divided its
statistics into periods of i've years.
"sincc the nations entire system
and policy of railway regulation are
under discussion at this time, the ma
tural dividing line In this 70 years
lis Afforded BY the figures for 1919 ~
was I'm that year that the Hepburn act
which drst established effective Fed
oral regulation, went into effect, and
il was rapidly following it's enactment
that most of the drastic railway reg
ulation OF the various states was
adopted. The period Of 1S9i-lS95 was
ono OF panic and extreme CONNER
eial dopression, and very large mile
age of railways became bankrupt; but
even in that period the ratio or net
operating income TO operating rev
enuo averaged almost 20 II per cent
During the next fiye years, le5o-lsvv,
conditions improved. and the ratlo OF
net operating income OF total earnings
increased 10 1904 per cent Durlhs
the next hve years the prosperity OF
the railways was still greater ana
the ratio of net operating income 10
total earnings advanced TO 1915 per
cent In the entire 10 years from 1891
10 1905. inclusive, there were only
slv wears when tho ratio OF net OPP
Grating income to total operating
revenues was less than 80 per cent
con the other hand, in tho 10 years
f9O6-19l5. the only year in which the
ratio OF net operating income 70 total
GENERATING revenues was as much az 80
| nor cent. was the very year in which
/ enectlvo regulation began, VIZ; 1910
BEFORE effective regulation was adopt
ed tho ratio of net operating income
Ia oneratine revenues was slowly pp'
steadu, increasing, while from 1906
10f5. il rapidly declined; ana IN the
two wears. f0if-1gl5, inclusive, 1t was
only 20 per cent
Its decline was arrested by an
enormous increase IN traffic in 1915,
and there Is a general impression that
this was a year Of record-breakine
prosperity for the railways. Measured
bv tho proportion Of their total earn
ings which they were allowed to keep
for interest. dividends, etc, however,
il was not year Of record-breaking
prosperity for them. The ratio OF
/ their net operating income 10 their
total earnings was 1929 per cent
'yVhy has the ratio Of net operating
income TO total earnings been declin-
| ing? The answer Is anorded by the
following table which shows the per
cottages OF total earnings which, per
iod by period, having been paid out "a
labor IN wages, for other operating
| expenses CHIEFLY for the purchase Of
fuel. equipment, supplies, etc) and II
taxes:
Percentages OF total earnings goine
10 labor, other operating expenses
taxes and operating income;
Labor. 1S91-1S95, 500; 1Ss6-1900
1908; la01-1a05. 1892; 1906-19tO
1867; 1911-t915, 43.4O.
Other operating expenses, Is91-1Se5
"...; lS96-1a00, 25.S2; 1901-1905
1922; 19O6-loio. 1880; l9l1-1si5
2719.
Taxes. 1S01-1Sa5 322; 1S96-1s0O
35i; l90l-l905. 3,1l; 1906-l9i0. 343
i0ll-l9i5, aga,
Operating Income, 1Sat-lS95, 29A1
iS9G-ia00 1864; i9Oi-19O5. 30.75; 1906
1910. 29I0: 19ii-l915, ISIS.
Total, lS9l-Sa5, *...; 1Sa6-190C
10000; 19Oi-l9O5, 10000; l9O6-i9lC
10000; .19l1-19i5. 10000.
FStausiics Of employees compenss
ton is not reported prior 10 1895.
Let us try TO sum up the true sig
nihcance Of the difference between tn
figures Of for the 10 years. ending wit
1905. and the 10 years ending wit