The Washington herald., 1917-09-13


that the railroads Of the United
States in the month Of June, that
being the latest month for which
full statistics have been received,
gained gross revenues which were
the greatest in the history of the
railroads Of the United States. The
Washington statement expresses
the enthusiasm of the Commission
over these figures by saying that
the June earnings made that month
the banner month for American
railroads.
Nevertheless, market quotations
for railroad securities have been
steadily depreciating and some of
the best railroad stocks have been
quoted considerably below par al
though there was no doubt about
the ability Of these railroads to
earn enough to pay fairly good
dividends. The railroad managers
can in no other way secure needed
funds for Improvement than by
selling short-term notes which bear
a high rate of interest. Yet there
is not a railroad manager in the
United States who upon being ques-
toned respecting the railroad sit
uation fails to say that the rail-
roads must have several billion
dollars of fresh capital if they are
to meet the transportation demand
which will be upon them speedily.
In fact, were it not for the CO.
ordination and cooperation of the
railroads so that they are now op-
Grated as a single unit under the
authority Of the government it
would be impossible for the rail-
roads now to handle the Transport
tation demanded by the govern
ment and fairly well TO meet the
demand of the Industries and mer-
chants for transportation of COM
modities.
In six months beginning on January
last the gross revenues of the rail-
roads Of the United States were very
nearly $l,S0,O6O,OOO. They earned $780,
100000 more than were earned in the
first six months of 1916. One of the
leading railway managers of the Uni
ted States said recently that were
II possible to report gross earnings of
nearly S2,oCoyC,0CO in six months and
at the same time to report that opcr-
citing expenses stood at about the
average figure Of three or four years
ago, then the railroads would he in
position to approach the money mar
ket confidently with intent to secure a
considerable part of the new capital
needed. But unfortunately for the
railroads, notwithstanding their great
increase in gross earnings the opcv-
ating expenses have increased at such
proportionately greater rate that the
net earnings are far from sstisfac-
tory.
A day or two ago market quota
tions for the stock Of the New Haven
Railroad Company fell below thirty,
at which point the quotations had
been lowering for some time. This in
spite of the fact that in July of this
year the gross revenues gained by the
New Haven were $7.2940OO, or con-
Sidcrably greater than the gross rev.
cnues for July of last year. The gross
earnings in July, 1916, were the great
est for one month in the history of
the company until July, 1917.
Yet the net earnings decreased. The
reason Cor that is that operating ex-
enscS have become enormous In
tie first scvel months Of 1916 the
operating eNpersCs OF the Now Haven
were nearly $33,OOO,OO0. The wonder
able TO live without seeking the help
Of the courts If operating expenses
continued at this rate They not only
continued but increased in the first
seven months of the present year.
The increase amounts TO about $1,000,
COO Yet this company, as is the case
til all the other railroad corpora
tons of the United States, has been
operated with the greatest possible
efficiency and has introduced many
valuable economies. Thu cost of sup
plies Of all kinds. the increase in the
wages and salaries paid to railroad
employees, the high price which t has
been necessary to pay FIR coal and
other heavy charges have in the ag-
gTegate eaten so heavily into the
gross earnings that while these have
been the largest in the history of the
road, the net earnings have fallen sol
greatly that the net income Of the
company for July 1917, was nearly
81, 10000 less than in July the preced-
ing year.
At this time when the raj l.oads are
cooperating as though they were a
single unit with the government in
order to secure speedy and adequate
transportation of troops and, of sup
plies. this somewhat alarming situa-
ton is merely spoken of as one which
portends grievous embarrassment not
only to the railroads but to the peo-
pie unless there come a change Rail-
way managers are gratihed to oh
serve that the attitude of the public
toward the railroads is rapidly chang
ing, for it is beginning to be clearly
understood that the prosperity Of the