The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1918-02-12
But Increased Expense Over
steps the Margin Reducing
Net Profit.
THERE MAY BE DEFICIT
Railroads in 1917 Earned-About
S95S,000,000 and 1t Is Esti-
mated Government Will Pay
$945,OOO,OOO.

in 1917 earned about 100000,
which is near the amount the gov
ernment will have to pay the roads
this year as compensation under ma
tional operation. This was indicat-
ed by figures on revenues. expenses
and income of all roads earning
more than $1.000,0OO last year,
available in unofficial computations
based on Interstate Commerce COM
mission reports for IL months and
estimate for December.
The sum the government will
have to pay the roads under the bill
pending in congress is estimated at
$945,000,000 by Chairman Smith,
of the senate committee, having the
railroad bill in charge.
Figures for 1917 show that IL
railway income continues to decline
as 1t has in recent months, the gov
ernment will face a deficit in maxi
ing its compensation payments, aug
mented by increases in wages and
the constantly rising cost of mate
rials and supplies.
On the other hand. the railroad
administration hopes to be able to
cut operating expenses sufficiently
and economize on charges necessary
only under competitive conditions,
to Offset the declining income. The
size OF these items, which will play
such big part in railroad financing
this year. was disclosed today by
the latest computations.
Rail Earnings Decline.
In December. the last month un-
der private operation, rail earnings
declined sharply, according to early
reports from railroads now being
received in the Interstate Commerce
commission. The average reduction
OF income was estimated at 30 per
cent, caused by the ever mounting
cost of operations, doubly increased
together with sudden drop in rev
enues resulting from traffic conges-
tion and embargoes.
Compared with the estimated in
come of 1858, 100000 last year, the
figure for 1916 was $l,OS7.533.-
600; for 1915, $716,476, 900: for
1914, 100000, and for 1913,
$816, $4,000.
Last year the total revenues from
railway operations were $4,O3S,-
100000, and operating, expenses
were $2.S61,O00.OOO, leaving net
revenue of SLIT, 900. From
this were deducted $217,OOO,O
taxes. and minor items of uncollecti-
BILE revenue to compute the net in
come figure, which is comparable in
general way to the basis of gov
ernment compensation. These fig.
ures VIII be increased about -four
per cent by addition of reports from
numerous small roads, having Cd.
Grating revenues of less than 81.
10000 a year, whose records are not
included with the reports of stand
ard class one roads.
Reason Is Apparent.
ne reason IOr the decline In net
income last year is shown graphic
ally by the report Operating rev.
enues were 10 per cent greater than
the $3.622. 100000 OF 1915, but ex-
penses ran more than 20 per cent
above the $2.373, 100000 mark OF
the year previous.
Nearly all items of expense were
higher. Wage increases are esti-
mated at 20 per cent. Cost of coal,
train supplies and repairs went up
by bounds with which the immense
receipts from freight and other
revenues did not keep pace.
People Travelled more in 1917
than In the year previous. but the
Increased revenue did not go far in
counteracting the steadily declining
income. War caused an immens
increase In hauling. and from
freight the roads received most OF
their revenues.
These freight revenues are esti
mated at $2,S0s,0 900 as compar.
ed with $2.573 900. 900 in the ban.