Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1917-07-01
RAILROAD SITUATION,
IT'S MANY PROBLEMS
CONTIyI-FD FROM PAGE -FOUR


actually declined, until the present
year 1t now stands At .707 cents, tn-
lowest In the history of American
transportation.
Moreover, freight charges on rail
roads In the United States are the
lowest in the world, as is also tnen
capitalization per mile. The awges
paid their employees are the highest;
while their operating efficiency is the
greatest. Yet this great transporta-
tion system. embracing over 25O,OOO
miles of road. and representing Il
property value of over $4,000. ,OOD
was permitted to earn a return of
less than per cent last year on the
value of its property and equipment
used by the public. In year of un-
precedented activity and unparalleled
general prosperity, such meager re-
turn to our railroads shows cost CON
Nincingly the need for relief.
The Return on Property.
During the eight years, 1907 to 1915
about s5.045.Sl2.O00 was added 10
capital and s32.731.OOO less net In
come was earned In 1915 than in 1907.
Five thousand millions OF new cap
ital put In the railroads of the United
States yielded thirty-three millions
less than no return, and the return on
the total capital in railroads fell from
473 per cent for 1907, to 3.44 per
cent in 1915!
A clear picture of the situation Is
given In figures just compiled for the
eastern railroads comprising all the
roads east of the Mississippi and north
of the Ohio and Potomac rivers. anu
CARRYING As per cent of the traffic OF
the country.
Figures of Eastern Lines.
Freight traffic of these eastern car
riers has increased PA times as fas,
as the population in the past l3 years.
hut the miles of line have increased
only onc-third as fast as the popula-
tlon. II has been only by intensive
development Of existing systems that
the carriers have been able to keep
pace with the demand for transpor-
tation. Since 1903 the average trac-
tive power of locomotives has been
increased by so per cent. the averasv
capacity Of freight cars by 40 per cent,
and the average freight train load by
72 per cent.
Meanwhile, with practically rixeu
rates for services and steadily increas-
Ing costs OF operation, the return on
property investment (amount avail
able for interest, dividends and sur
plus, has been declining. This In
come averaged: 1903-1e07.' 5.s7 pc,
cent; 190S-1912, Sac per cent; and
l913-1s16. EOS per cent
The figures show that with tho
diminishing return the flow OF new
capital into the railroad business has
been checked. New investment In
property from 1906 to 1911 was
si.1ss. 900, 900. an increase of 23 pc.
cent: but in the past five years G91l-
1870 the new investment was only
1856, 900. 900, an increase of but 12.5
per cent.
II the capital stock of all the east
ern roads were disregarded. the in
come Of the roads on their bonds for
the past five years would be only S.4
per cent and even in the Fat" year
1916, the big earnings show only about
IL per cent on the bonds.
In the face OF such facts. 1t is not
possible to obtain the capital neces-
sary for growth and development OF
Transportation co-extensive with the
country's business expansion.
The railroads neared the peak, =,
their earning power with their pres
ent facilities last year, and unless
important additions to equipment, ter
minals, etc, are made, the cost u.
transportation will probably Increase
In a rapid ratio.
How to Solve the Problem.
What is demanded primarily as a.
fundamental solution of the difficult
ties OF the situation is a sane, eff
cient system OF regulation under one
responsible authority removed as far
as possible from political considera-
tions. obviously. that authority mus,
be the federal government Exercis-
ing jurisdiction over more than so
per cent of the nations commeI,c--
the estimated bulk OF Interstate traf-
tic II is Illogical and indefensible TO
maintain as additional regulators
for the small remainder.
Refor the Joint congressional cont
mittee OF Inquiry. which Is investi-
eating the whole transportation prob
lem. the railroads, thru their eAccu-
tives. have offered the following sus-
gcstions for meeting the situation.
First: Federal supervision of rail-
road securities.
Second; Federal incorporation Of
interstate carriers.
Third: Federal reguStion Of rates