Evening journal., 1917-05-10
President Rea of the Pennsylvania Dis
closes the Railroad Situation
lFrom he New York sunl !.

case) show that for that year the
Pennsylvania Railroad system after
sinking fund payments OF $6,457.571
and average dividends OF 626 per
cent. had remaining a surplus of $780,
700 900. or 2.90 per cent on the total
capital obligations I'm the hands OF the
public 10 will readily be seen tha. the
minimum increases I'm these five ex-
pense items alone OF SOL ,S92. 900 would
not only wipe out the entire surplus
but cut into the sinking fund pay
ments and dividends TO the extent OF
Sl5.2OOOOO"
This statement we have reproduced
because II Is the official declaration
OF the responsible executive officer
Of a railroad that is peculiarly well
situated TO meet any emergency, fnan-
cial or legislative. that might arise,
and for the reason that 10 illuminates
vividly the plight In which roads in
less fortunate circumstances ind
themselves That the Pennsylvania, by
reason OF natural advantages, utilized
to their utmost possibilities by dir
ection wise and farslghted. today is
better equipped TO undergo a crisis,
and can support oppressive financial
burdens more surely than most Amer
ican railroads. is undeniable; and yet
II the Pennsylvania could preserve it.
self while the destruction OF other
transportation systems progressed to
completion, the country with the eX-
ception of the fortunate owners of
this one establishment, would be
brought to ruin
other roads have not been able to
make earnings comparable with those
of the Pennsylvania. The territories
they covered have not been so rich
as that IL serves in products Of mines,
Of farms and of shops, requiring trans
pOrtation from the places of their
origin to the factories in which they
are worked, and eventually to market
Their incomes have been insufficient
to permit the progressive develop
ment of their lines and terminals, the
Improvement OF their equipment, in
the manner that has characterized the
upbuilding of the Pennsylvania. The
returns from their operation have
not been great enough TO allow ac-
cumulation OF reserve funds capable
OF bearing the heavy expenses of
slack times They have been handi-
D
prevented by the limitations of their
bank accounts from buying in favor
able markets. They have been com
PEELED to pay top prices for every
thing they have needed. from capital
TO spikes: and therefore what bur
dens the Pennsylvania spells for them
disaster
There is no question as TO the pub.
lie necessity for adequate compensa-
ton for the railroads. They are pub
lie utilities, essential not to the com
fort Of the population, but to its very
life. It is not less necessary that
they should be allowed to charge
rates fair 10 their owners than that
they should be prohibited from charg.
ing rates unfair to the shippers. who
act As the agents and Intermediates
4 between the roads and the consum.
ing public. That public is as greatly
harmed by freight charges too low
/ and the decentralization in transpor.
I tation they will inevitably produce
as II would be by extortionate
schedules.
Regulation OF rates as well as oil
operation practices must be admins
tered for the ultimate well being o
the public not for the temporary
gain Of few individuals, or the pro
fit of one section of the country as
opposed to another. If regulation de
crees that wages and taxes shall be
higher then regulation must allow
revenues to be increased If it fails
to provide for this adjustment. It in
vites bankruptcy for the transporta
hon agencies that make possible the
support of the nation; and their
downfall would bring ruin on all.