New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1917-06-20


building the road will not be delayed.
CRISIS is APPROACHING
FOR THE RAILWAY LINES
That the railroads are perhaps fac
ing one of the the gravest financial crises
in their history is slowly but surely
dawning upon every railroad executive
In the country. From. careful survey
of the suitation it is estimated that the
railroad fuel bill during 1917 will be
$140,000,O0O greater than during 1916;
also that the increased cost Of freight
cars, locomotives and other equipment
will cost $200,O00,OOO more this year
than last. Add to this the $60,O00,OOo
tribute exacted by the Adamson Law
and this gives us in these three items
an increase of $400,OOO,OOO in the costs
of operation during 1917 over those of
1916-and this doesn't take into ac-
count many millions of dollars repre-
sented in other wage advances, taxes
and many other items not included in
the above. Therefore it can be seen
that whatever additional revenue may
come from the Is per cent freight adj
vance should the Interstate Com
merce Commission grant it will soon
be completely wiped out
To those who have become obsessed
with the idea that the carriers are in
the midst Of reign of unprecedented
prosperity" it is only necessary to cite
the figures of the great Pennsylvania
System which during the seven months
from September 1, 1916 to March l.,
1917, collected $17,500,000 more in
gross revenues than during the same
seven months the year before but
which found, after casting up the re-
suits, that, after paying the increased
costs Of operation, it had actually earned
$12,400.000 less. In other words, dur
ing the above seven months, the Pen
sylvania system earned $12,4OO,OO0 less
than it did during similar period the
year befo1e-despite the fact that it
| had collected SIT, 100000 more from the
public during the latter period. Thus
it can be seen that ''all is not gold that
glitters' and if they were given their
choice there are scores of railroad ex-
ecutives who would gladly exchange
their war prosperity for the condi-
ticns which existed before. On top of
these mounting costs of operation which.
are going higher day by day, there
looms an acute Worldwide demand
for money which, as the late James j.
Hill prophesied, is almost certain to
force extremely high interest rates upon
all classes of industry and therefore it
will become more necessary than ever
before for the carriers to so maintain
the integrity of their securities that in
vestors will be willing to let them have
the hundreds of millions of dollars of new
capital which they must have regardless
of the interest rate. .-...s. .'
Only recently the New York Central
one Of the most powerful systems in the
country failed in floating an issue of
securities for money of which it had an
imperative need-and this despite the
fact that it has been a road which has
shared most generously in the so-called
unprecedented prosperity of the
carriers. 1t is therefore painfully ap-
parent so far as the exceedingly practical
investors of the country are concerned,
that, as Mark Twain said of the pre-
mature report of his death, the prosperity
of the railroads has been greatly ex-
aggerated." Practically one-ffth Of the
railroad mileage of the country is in the
hands of receivers or has just recently
emerged from receivership when
great systems like the Pennsylvania and
the New York Central are sending up
cry for help, it can be easily imagined
what sort of difficulties confront the
weaker lines and systems. In fact, the
gravity of the situation cannot be over
estimated-and unless the public lends
friendly ear to the appeal which is now
going up fromthe railroads we may soon
find ourselves in the midst of paralysis
Of transportation in comparison to which
1.-The eight hour controversy and the car
shortage have been relatively unimport-
ant. :. ~.
| C0pN rp0p I'M n1ECD