The Birmingham age-herald., 1917-10-08

New York, October 7.-CSpecial. )--Rail-
 road shares held the center of the stage
 in Wall street this week. New York Gem tral, Baltimore and Ohio, St. Paul, and a
 number of other seasoned dividend pay
 ing railway shares. making one new low record after another When the stock
 market opened Monday morning Wall
 street had before it the full text of new
 war revenues tax bill just agreed upon by the Senate and the House. Long be- | fore the gong on the exchange floor gave the signal at 10 o'clock to begin the days
 business, Wall street knew that section
 500 of the new war tax bill provided that
 From and after the first day of Noven- Der, 1917, there shall be levied, assessed, l collected and paid a tax equivalent to D per centum of the amount paid TOT the
 transportation by rail or water or oy | every form of mechanical motor power | when fn4 1mpetition with carriers by rail or water of property by freight con l signed from one point in the United States to another" That 1t appeared could only mean that the railroads were | going to be called upon, beginning Wltn next month, to pay a tax of per cent 1 on all freight handled.
 | Knowing that freight makes up 70 per | cent of the income production trafflc or l the railroads, section 800 of the new tax bill was declared by the speculative Wah I street to be a calamity for the carriers. Then. with everybody in the flnanclal district more or less dazed, the raliroaos | began to publish their monthly earnings statements. New York Central, Tor ex- ample, showing an increase of sS. SS9'ovO In gross. but a decrease of $l,bSe,Voo ID net for August, with an increase or SIS o34,oOo in gross. but decrease or sio 65S0oo in net for the eight months or tne current fiscal year. Tn the cary s slaoiiss aas crned to 74zh, compared with lO3ss early this year, and 114t4 this week year ago. st Paul sold down to 52ss and Baltimore land Ohio to 61N, respectively, compares
 with 1o21h and 80 last year. Tnrougnou1 the week these and other railroad snares continued to decline was specu,a.ar
 Wall street right In this weeks conten- tion that the railroads were facing a des- perate situation?
 As far as the new tax bill Is con-
 earned, there is nothing In tnat pro-
 nosed law to frighten investors In raii-
 road stocks. If the railroads haa to pay into the government per cen.
 of their freight earnings there wouiu be cause for alarm. But sucn IS not fhe case. Far down in the bill there
 fs a. small clause which reads: The taxes tmposed by section 500 shall De paid by the person, corporation. pa,l
 nership or association paying Tor tne
 services or facilities rendered. That IS
 plain. The poor ultimate consumer, not
 tho railroads. will pay the per cent freight tax. a,- But while the foregoing clause dis noses of this weeks scare regarding
 the per cent war tax on freight what is there to be said of this weeks state ments of railway earnings. Inese statements certainly show that lhe railroad, like the poor ultimate con
 sumer, is paying it's part of the war costs in higher wages and higher cost of fuel and all material and supplies. But, fortunately for the railroads they 7 are earning more gross than ever pe- fore. Take New York Central: For : August that company earned sly,o ~. : , 600 gross, compared with $lS.VfeV"' tns new high record established for Au- . gust of 1916, and only $14,45S,00o for August of 1915; for the eight months of this year New York Central earned $40. .496,000 gross, against only SEA- SS8.000 for the same months of l916 ! and s103,S73.000 for 1915.
 These large gross earnings, despite the higher operating figures. are al flowing the railroads to show hand , some net earnings compared with lslo . For 1915 Atchison earned for its com
 mon stock 9.2 per cent; Baltimore and
 Ohio, 6.5; Illinois Central, 6.2; Nor ! 1 folk and Western, ST; Southern Pa r cjfic, 7.2; Union Pacific. 10.9. Now
 with these figures fin mind, compare the following net earnings for the 9 eight weeks of 1917, not with 1916 but 1915: -