New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-05-25
Thursday, May -, 1911


ties in order that funds required for
Improvement may be raised readily
and at reasonable cost. That is, IN
truth. a necessity. But it is re-
markable that there should be any
public confidence left to MAINTAIN.
Certainly there would be none II IN
vestors were only fraction as pes
eimistic as those who run the rail-
roads and many Of those who write
about them. The spokesman for the
railroads have acquired the habit OF
homeless pessimism concerning the
future. Whoever heard of a rail-
road man Interpreting any event as
favorable to the countrys trans
portation system? The phenomenal
net earnings of 1916, passing the
bilHon-dollar mark for the first time'
are now discussed in italics as NOM
NAL net earnings. And if the 10 per
cent rate increase under considera-
tion in Washington is granted, 1t
will do little good anyway. Perhaps
il will help a trihe, but, even So the
outlook is exceedingly gloomy, for II
will fall far short of meeting the
increase in expenses. As one rail-
road leader said not long ago, rail-
road securities may become an asset
instead of a liability.
So runs the argument, just as 1t
has been running without change
ever since ore can remember. The
Railway Age Gazette" has something
to add to it in criticising a para
graph recently printed in The Trlb-
une. Discussing the question OF IN
trinsic values. 1.-The Gazette says
that "from a general study of pres
ent railroad conditions it would APP
near far more likely that even now
the great majority of railroad stocks
are selling on basis of the rate IN
crease granted in full. 1t is true
that there are few exceptions
which prove the rule, and so far
from having discounted an adverse
decision of the Interstate Commerce
Commission, it would appear much
more likely that even present low
prices discount favorable decision.
That is, of course, merely matter
of opinion, but the inference is that
if the railroad stocks generally have
discounted the advance-in rather
unusual way for the stock market to
discount a favorable event, that IS,
by declining-then there is nothing
for the holders Of such securities to
look forward to but further declines
as expenses go on rising; while II
the Commerce Commission should
act unfavorably it would surely
spell disaster for them. 1t is a
pretty gloomy view TO take, even for
the railroad man who talks pessl-
misticalIy and strangely goes on con-
Quoting railroad operations waste
fully and with boundless optimism.
As a matter of fact, the situation
is not nearly so bad as the pessi-
mists would have you believe. 1t IS
perfectly true that while gross earn
/ ings have increased substantially in
the last three months, operating in
come has fallen off. But, even so,
the figures do not make a bad show
ing when exhibited in contrast with
earnings in other than the record
period, 1916. Thus, the operating
income. which is the income from
operations after deducting all ex-
penSes, taxes and uncollectible reve-
nues. of all Class | railroads in
March, 1917, the latest month for
which returns are available, was
$73,574,000, decrease of $9,571,000.
compared with March, 1916. That
looks rather bad until earnings of
preceding years are examined. In
March, 1915, 1914 and 1913 operat-
ing income was 55,5S0,000, S54,-
100000 and $52,1OO,OO0, respectively.
For the three months ended March
81 the figures, compiled from month
" reports to the Commerce Commits
sion and subject to very slight re-
vision, compare as follows: