The Daily Ardmoreite. [volume] (Ardmore, Okla.) 1893-current, 1919-05-11
The Railroads.&c.
Bankrupt Industry
! From The Railway Agc)

Only one rational conclusion can be
drawn from the statistics of railway
nrnings and expenses for the first
three months of 1919. the Railway Age
declares in an editorial In It's currnI
sue. This Is, that the railroads are
.oday bankrupt industry and that
no Increase OF traffic. or increase in
efficiency of operation, or increase in
Doth, which there is the slightest pos
hbllity will occur. would leave the rail
ways anything but Il bankrupt industry,
II existing wages and existing freight
and passenger rates We're both retain
ed"
"The deficit incurred by the Railroad
Administration continues to grow fast
er even than the most pessimistic have
feared" says the Hallway Age, 1T
was SIS, 900 600 i'm March This made
the total deficit FOR the first three
months Of the year approximately $780,
100000, or almost one and "A half mil
lion dollars u day.
"Drector General Hines, on his re-
cent trip TO the Pacific coast, made u
number of addresses and public state
ments. lie appears to have attributed
the current bad showing of earnings
and expenses chiefly to the heavy de-
cline of traffic. lie indicated that in
his opinion the results will improve
when industrial and transportation con
dtions become normal
Let Us consider the director gener-
ais attitude in The light Of
the facts. II is true there
Llns been "a decline Of traffic. But con-
IDitions in 1917 and 1918 Were not nor
MAJ and the traffic handled in those
years showed It vast increase largely
due to war conditions. Let us go back
To the first three months OF 1916. In
that year the railways had the largest
Increase OF traffic that eyer occurred
in any single year. They made the
largest operating income ever made in
one year, ConseqU -ntly most people
assume that because of the recent de-
cline in traffic the business which has
been moved thus far this year has been
much less than in the remarkable year
1916. 1t is somewhat disconccrting,
Therefore, to find that in the first
tIlGt lllOllIS VI l'l' lllf ltflSIl lldlll'
Of the railways was 50 billion ton-miles,
while in the first three months of 1916
it was only so billion ton-miles, an in
crease in 1919 over 1916 Of over 6 per
cent. Furah- -rmore, the traffic handled
in the first three months of 1919 was
only 10 per cent less than that moved
in thu corresponding three months Of
1917 ana 1918.
Bearing in mind that the feright
traffic moved in the first three months
OF the year was per cent greater than
that moved in lac some three months
of 1916 let us ,omg1re the earnings
made ANA the expenses incurred. The
total earnings in these thre months
in 1916 We're ssh, 200, 900, while in 1919
they We're $l,l2O, 500, 900 an increase
OF ~ per cent. The operating expenses
in 1916 Were $3.50, 100000. while in 1919,
they were Sl,O3T 900 UGO an increase
of 50 pr cent. In the first three
months Of 1916, the ratio of expenses to
total earnings WAS So per cent In 1913
with passenger rates 80 per cent high
cr, and freight rates close to 80 per
cent higher, the ratio of operating eN-
penses to total earnings was 93 per
cent. In the first three months of 1916
the railways, after paying their eN-
penses and taxes, had left $2I4.00O, ,O00
of operating income. In the first
three months of 1919, they had operat- |
ing income (which is slightly larger
than net operating lncome) amounting |
to only S44 100000, a decline as compar
ed with 1916 Of 10 ID per cent.
1T is easy enough for anybody who |
carefully examines the foregoing fig |
ures to see what is the main trouble |
with the railroads. 1t is not the de-
cline Of traffic, but the increase of eX
penses.
"AIr. Hines seems to look forward |
confidently TO Il revival of business
which will stop the decline in traffic.
But that the loss of traffic during the
year will be relatively less during tie
first three monLhs-that is, 10 PER
cent--there seems no good reason for
believing. If the loss of traffic
the year should be rela
lively as large as it was during the
first thr-e months and railroad eXpen-
ess should continue to be relatively as
large. the governments deficit for the
year would be about three-quarters of a
billion dollars.
"But Mr.. Hines is also counting upon
Il substantial reduction of expenses.
But the progress which had been made
up to the end of March does not inspire
hope. In January, when there was an
increase of 10 per cent in the freight
moved, the increase in operating eX-
penses, compared with the same month
Of 1918, was 80 per cent, in February /
when the decline in freight traffic was
l3 per cent, the increase in expenses
was "a per cent. In March, when the
dscline of freight traffic was % per
cent, the increase in expenses was %
PEI cent.
The railroad system of the United
States is earning only % per cent as
much net in come as in the three years
ended with June 80. 1917, in spite of
The fact that its gross earnings are run.
ling about so per cent more than then.
rh. rates must be advanced, and sub
ia 7tially advanced if the railroads
are ever to be converted from a bank
-upt into 4 prosperous industry, and
his whether government operation is
continued or private operation is re-
tored."