New-York tribune., 1918-03-05
Penn. r. r. Moves
More Traffic at
Smaller Profit
Scant Labor Supply Made
Congestion Worse and
Costs Higher

Rendering service equivalent to the
transportation Of 48,749 All tons of
freight one mile and 5,S2S, ,039,951 pas
sengers one mile, increases for the
year respectively of ,903 ,193 ,5S1 tom
miles and S55, 5,l95, ,001 passenger miles,
the Pennss lvania Railroad System
earned net income in 1917 Of S56,501,-
col. decrease of $40, 9,448,913. This
decrease is partly explained by heavier
tax accruals, but mainly the loss was
sustained through an increase in
operating expenses. While gross
operating revenues, amounting to
S49d, POI, ,037, were larger by $50 1885,
SD, operating expenses jumped ST.
G07.542 to S406,201 ,037.
The net income of the Pennsylvania
Railroad, the parent company, was
S39, ,2S1 ,5S5, decrease of $12,994,9
though the volume Of traffic handled
vas far larger than ever before in the
history OF the company. This decrease
was the direct result of advancing
costs Of material and labor and the
extraordinary expenses incidental to
the congestion of traffic and embargoes,
a., result of which about SO per cent
OF the transportation revenues were
absorbed in the payment OF operating
expenses and taxes. The operating
ratio was slightly more than 612 per
cent higher than that for 1916
After payment OF regular dividends
during the year the entire balance of
net income, 81, ,113 ,459, was appropriated
toward meeting dividend paid Febru-
airy 2S last.
Probably the chief problem with
which the road had to contend last
year was the difficulty Of procuring an
adequate labor supply. Samuel Rea,
president of the company, estimates
that approximately 1000 persons
we're employed during the year in order
% MAINTAIN an average working force
of 100000. The employment and
training of these men not only were
costly, but hampered operations be-
cause many Of them remained in ser
wee for only brief period.
MI. Rea explains in the report that
the congestion, which was particularly
severe on the Pennsylvania sytem, was
due to the inordnately heavy flow Of
traffic for both foreign and domestic
consumpton; but he states that it was
greatly accentuated by the precedence
given to various kinds of traffic to
facilitate government worl. required at
home and abroad; by continued severe
weather; by insufficient motive power
and other equipment due to manufact-
urlng priority granted to the govern
ment for the Allied nations, and the
loss Of thousands of trained men who
entered the government service, or went
into other occupations'
Describing the problem created by
government control, Mr. Rca says that
''the interests of the railroad owners
and, indeed Of the public, arc chiefly
in an equitable compensation for the
use of their properties; the provision
OF capital for necessary additions and
betterments, and to meet maturing is
sues; traffic rates sufficient TO meet the
high costs of labor and materials and
creased capital; and the protection OF
their trained arrangements, working or
raniZations and accounting systems
from disruption, so that when the rail
roads are returned to their owners the
revenues will be sufficient to properly
support the properties and the roads
will be in position to continue an un.
rivalled and economical transportation
service"
The expenditures for 1918, for which
the annual meeting next week will be
asked to authorize an additional in
dcbtedness of SO 100000. will be used
to expand the lines. increase terminal
facilities and equipment and assist in
winning the war.
On December 81, 1917, the report
states. the system had 100,03S stock
holders, with an average holding OF
less than 100 shares.