Arizona republican., 1919-05-12
Where Reconstruction Is Necessary

Where Reconstruction Is Necessary
 Some time ago The Republican deprecated the 5=e of the word "reconstructon'for the word re sumption" in connection with the activities Of thls country after the We admitted the need of re- construction in Belgium, in France and wherever the war had ragged where destruction had been wrought It was an insisence absolute accuracy as we then saw it. But the criticism was an uninportant hair splitting one and not really worth making, since all of us the "reconstructonists7 and the "resumers, all knew what we meant and all meant the same thing. We find though that were in error because of our ignorance and the then universal ignorance of peculiar need of actual reconstruction, the build ing of something that had been torn down. It is one of the policies of The Republican to admit error We are sometimes glad of the opportunity to do it.
 We find that there has been destruction, but not by the war though the made the occasion for it. We learn from the Railway Age that "only one rational conclusion be drawn from the sta tscs railway earnings and expenses for the first three months of 1919. This is that the railroads are today bankrupt industry. and that no increase of afc or efficiency operation, or increase of both Which there the slightest possibility will occur tou1d leave the railways anything but bankrupt industry if existing wages and existing freight and ,assenger rates were both retained.
 'The deficit incurred by the railroad adminstra- ion continues grow faster than the most pes
 
 made deficit for the first three months of theyear approximately $13O000000. almost one and rlaf million dollars day"
 The Age takes the view of Director General Hines explanation last week of the alarming and steadily increasing deficit Of roadsthe decline of traffic that expressed by The Republican:
 Director General Hines on his recent trip to the Pacific coast made a number of addresses and public stetements. He appears to have attributed the rent bad showing of earnings and expenses chiefly the heavy decline of traffic. He indicated that in his opinion the results will improve when industrial and transportation conditions become normal.
 Let us consider the director generals attitude ill the light of facts It is true there has been decline of traffic But conditions 1917 and 1918 were not nor nal and the traffic handled in those years showed vast increase. largely due to conditions Let go back to the first three months of 1916 In that wear the railways had the largest increase of traffic that ever occurred in any single year. They made the largest operating income made in year. Consequently, most people assume that because of recent decline in traffic the business which been moved thus far this year has been much less than in the remarkable year 1916 It is somewhat dscon- certng, therefore, to find that the first three months of 1919 the freight traffic of the railways s billion miles increase in 1919 over 1916 of over per cent Furtherhore the traffic handled in the first three months of 1919 was only 10 per cent less than that moved in the corresponding three months of 1917 and 1918
 Bearing in mind that the freight traffic moved in the first three months of the year was per cent greater than that moved in the three months of 1916, let Us compare the earnings made and the expenses incurred The total earnings in these three months in 1916 were $S11,000000 while in 1919 they $112O500 900 an increase of 3S per cent In the first three months 1916 were $56O 900 GOO while in 1919 they S03I 100000 an increase of S0 per cent. In the first three months of 1g1e inc ratio or expenses fo total earnings 60 per cent In 1919 with passenger rates 50 per cent higher and freight rates close to B per higher the ratio of operating expenses to total earnings was 9S per the first three months of 1916 the rai11yave ft. paying their expenses and taxes had left s24 900 900 od operating income. In the first three months of 1919 they had operating income (which is slightly larger than net operating income amounting to only $44OO0OOo, decline as compared with 1916 of 79I5 per cent. @
 It is easy enough for anybody who carefully ex- amnes the foregoing figures see what is the main trouble with the railroads It is not the decline of traffic, but the increase of expenses
 And where lies hope? It must be in further increase of the already high rates. A reduction of expenses could be accomplished only by sweeping reduction of wages. There is nowhere else to cut The government administration has already eliminated the great salaries of the higher officers of the com panies under private ownership and control: these salaries must be in part restored when the roads returned for presidents and general managers o roads do work for nothing.
 No doubt, under private management the road. would be run more economically and efficiently. bu is improbable that greater economies and superior Efficiency would wipe out an annual deficit o s75oOOoOOO
 In conclusion, the Age says
 MT Hines seems to look forward confidently to revival of business which will stop the decline traf fc But that the loss of traffic during the year vii be relatively less during the first three monthstha isl 10 per cent-there seems no good reason for be fe1ing If the loss of traffic throughout the yea should be relatively large as it was during tn nrst three months and railroad expenses should con tnle to be relatively large the governments defici for the year would be about three-quarers of bio dollars.
 Mr Hines is also counting upon substantial fe ttia af exnenses But the progress which ha een made up to the end of March does not lnspli hone Tn January. when there was an increase Of l per cent in the freight moved the increase in oper
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