New-York tribune., 1919-03-13
Revolving Fund Declared
Inadequate 10 NJ G ct
Growing Obligations
Equipment Bill
Now S3OO,0OO.00
Failure to Pass Army Act
Ties Up Sums Due for
Troop transportation
Ncw York Tribune
D...


WASHINGTON, March II. - A def
mite programme for financing the rail
roads until Congress convenes prob
ably viii be announced within week
or ten days. This is the expectation
Of Walker D. Hines, Director General
Of Railroads. who said to-day that
from now until the arrangements are
completed he win devote every mo-
meut to the task.
1t is now indicated that the Federal
warrants which will be issued to the
railroad companies BY the railroad ad-
ministration VIII be for the full amount
of S70l ,7eG,00o needed to meet the OBJ
legations Of the roads up to June SO,
1919. While these due bills will not be
negotiable, they can be assigned, and
the railroad administration has been
assured they viii be accepted by the
banks as collateral for the money.
Officials See Debt Grow
While railroad officials arc inclined
to be optimistic over the prospect Of
meeting the stringency caused by fail
ure of Congress to pass the revolving
fund, it is realized unat ii President
Wilson decides to hold on to the roads
to the end of 1919, it is probable that
Congress, instead Of being called upon
TO pass the $750,000,o coo appropriation,
will have TO furnish Il much larger re
volving fund
Unofficial estimates obtained from
railroad administration sources indi-
cate the total amount that will have
10 be raised to meet obligations and
estimated operating deficit, if the
roads are kept that long. will be ct
least 81 ,2S0,000,000 1t is estimated
the operating deficit in 1919 will be
approximately $40, 100000, and atten-
ton is called to the fact that in none
Of the estimates that have been sub
mitted to Congress thus far by Mr..
Hines has any mention been made Of
this deficit
Financial Outlook Tabulated
The situation at glance is summed
up in the following table:
Amount owed by railroad ad-
mlristratlon TO railroads
1913 rentals ........... $3.50 900 .000
Amount owed for equipment or
dered in 1918 for delivery in
1919 ......,......-.'......... 2Ss oO0. 900
Additions and betterments
planned by railroad admins
traton FOR 1918 ......-..... 49l 100000
orsaa.zatioa ...'...'.... 2oooo,ooo
To finance inland waterways de-
tcioinrl- Ao,NVN,pVV
Total ...................$1 .$1.19oooo. 900
Io care for maturing railroad
Jo provide for e-.irnated operat-
.ng cerelt ~ lsl9.......-... 24VOOo,OoV
Total -equirqnents for 1919 $780, oOo 900
less amount raircads can
c1- .ltl- rentals for add
tons and oetterrnents .......... eOOp, 900
balance .................... 81. .4So O0O. 900
Iess amount Of maturing Sc
curitics. on expectation that
hey be removed .....-. 200 OOO .op0
Net amount 70 be provided By
-airoad administration and
-aroed companies ........S1, 80 600 .OOo
The estimated deficit in operating
revenues is based rot only on the
showing for January Of this year, but
on the probability that within the near
future the Railroad Administration
will announce, as effective January l,
the new wage increase for the railroad
brotherhoods THIS increase az a min
mum viii probably be $4,000 600, and
may be conaderably more To-day,
moreover, the Board of Wages and
Working Conditions began hearings on
cf m eb n
workers for an increase in pay from
- 70 70 cents an hour.
Net Income Shrinks
The gross operating revenues Of the
roads FOR January. 1919. were $685.
100000 approximately, and the operat-
ing expenses $3.50 900, 900, leaving a
net operating income after deducting
axes and other deductions OF $3.50,
500, as Compared with $4,000, 600, the
average ne operating income of the
roads for the month Of January during
tne three year pre- war period and S75.-
voV00O, the general monthly average
curing the three~year Pre-war period,
upon which period the guaranteed
rental ia based. While In January
isIs' when the roads were taken over
mere was an actual deficit for the
month % approx imately S4,000,000. the
net operating income for January
1911, was x5s. 100000
inAsmuch as the last six months OF
Ne year are always moro profitable
~ estimated that in order to meet
sNe guaranteed rental for the year, the
het operating income would have K
,srage monthly about SAT 900 900 dur
nas ag a ene nrst six months and about $685.
''y."VV during the last six months
~ 1alAng aiso 10 pass the army ap
S.Jpration bill, Congress cut off an
.nsf source OF revenue 70 the rail
INA. Inc War Department owes the
{sss {s 'or troop transportation durins
~ approximately 800 900. 900. Neithe,
sof sun, nor the bill. for railroat
hsportatson in c9nnection with the
fa".oDisizatlon fa vi the army, now can
tomorrow the Director General vii,
S''isr with Representatives Of eouip
''s'' companies, TO which rhs ra,lroat
3"ihissration and railroad coronsri.s
s'se'nsr owe nearly 5000 900 900 10,
'sf1'pment ordered In 1913 sor 1910 da
lTery The understanding /. tb.t h,
"'h propose 70 the railroads sfte,
~" conference with tho equipment rer
fhat they assume The antir. ah,.n.
ton ''''s"
her@sofore some roads havo show,
SANsainzness ~ accept sooA Of 4b,
Ak44