The Washington herald., 1917-01-04
SAYS RAILROADS need
/ MORE GOVERNMENT AID
Eastern Banking House Makes Plea
for Carriers During 1917.

] New York, Jan. al. 8. Bache Il COM
pany has issued the following financial
review for 1916:
Adverse factors during 1916 have been
the constantly present agitation due to
international complications with Germany
and with Mexico; failure of crop results
to reach normal figures; and growth OF
labor unrest met widely by wage advance.
Vastly offsettng these, have been con-
stantly expanding domestic industry ac-
companied by great profits, and tremend-
Gus enlargement of our export trade with
huge balances due us, which have been
| lliquidated eithe by gold shipments
amounting for the year to nearly $6H,-
900 900. by sale to us Of our own securi-
ties, or by advances of credit on our
part, in one form or another, the total
of which has reached around 1880, ,o0o. 900.
Looking over the whole situation, one
of the most important things to be done
at present to provide for stability of the
country's business in the future, Is to
place the railroads in position so tina.
when temporary prosperity Is over, they
will still be able to earn fair returns
sufhcient to keep their credit excellent and
their purchasing power unimpaired, be-
cause upon the volume OF railroad pur-
chases year by year in this country, de-
pends, In the last analysis, maintained
activity in all other departments Of in
dustry.
| Incomes Show Gain.
Statements were sent out last week
by the Interstate Commerce Commission
with estimate of railroad earnings for
tho year based upon statistics complete
for nine months. These estimates show
that the total net income for 1916 will
be approximately 8, ,09s. 100000. This is
before the war when returns are sup
posed to be near nomal.
| Taking into consideration what the
war has done for other business under
[ taktngs, an increase in net revenue OF
| SO per cent does not seeem so large.
Under normal conditions before the war.
railroads were steadily sinking into dis
| aster.
On December 81, 1915 seventy-hve rail-
ways in the United States were In re-
| ceivers' hands covering nearly Is, 900
| miles of line (one-sixth of the total mile
age in the United States) and involving
s., 81, 900, 900 of stocks and funded debts.
| The trend Of that period was toward re-
| ceiverships.
| from disaster by the war. Now that
peace Is being vitally discussed, the ques
| ton presents itself, What is the future
| of railroad business?" Undoubtedly war
| activity will last some time longer, and
undoubtedly the impetus given to general
| domestic business will carry activity
/ along for some years. but will not the
| transportation business as associated
with its net earnings be on the down
grade even II only gradually trending in
| that direction7
Not Adequately Equipped.
The railroads are not adequately equip
| ped. their terminal facilities are clog
ged by reason of insufficient expenditure,
| Improvement of existing lines has been
| seriously retarded IN the last few years.
and construction Of new lines has been
| brought to a standstfl The railroad sit
uation needs now exactly the Same reme-
dies which 1t needed in 1913. to keep It
| from approaching the same untoward
conditions which prevailed before the
| war. The railroad business Is primarily
| the greatest agency of national prosper
| ity. All business interests are working
in the endeavor to retain prosperity after
| peace. Is the greatest agency for this
purpose in the best condition to help7
Germsny's great military compaign
| would have been impossible without her
efficient transportation system. Where
this country would be in this regard has
had a demonstration in the rush of mil
itia to the Mexican border We en-
deavored to transport 10000 men in
and though every facility, such as 1t was
was extended by the railroad managers.
the delays would have been vital in case
of real attack.
| Governmental Remedy.
| The expenses of a railway 1t must
meet every year. Its resources are the
| total earnings for decade or more
The condition of the company, there
fore, is only to be gauged by setting
the large earnings of one year against
the small earnings or deficits of other
years.
| The remedy must be governmental
Congress must adopt a policy of protec-
ton to the railroad investor and de-
clare that policy-namely. to permit such
rate regulation as will yield the roads
| revenue enough to do their work ade-
quately and to have earnings left over
enough to assure investors. Regulation
! of interstate commerce rates, and also
wages. should be wholly in the hands of
| the Interstate Commerce Commission
and that commission should be enabled
to perform the vast labors which are
| thrown upon It, by means Of Q series of
| regional sub-commissions.
| The end of the year finds the Sc
curity market involved in peace discus
sions and war scares, after a fall in
| prices, from which a recovery has been
made only In sentiment, as prices have
stayed irregulariy down, and in many
cases are on a peace basis.