Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1919-05-07
BLAME RAILROAD Loss
ON RECONSTRUCTION
SAFE 900, 900 Deficit Shown for
First Fifteen Months of
U. S. Operation
SEES GAINS DUE THIS YEAR

+ I- WftPsptfu,UVUs VI tllS amount N--D, 70
U0U. 600 forms the deficit of the year of
f 1918. while the astounding total Of
lE SIv2,OOO, 900 has been accumulated as
\. deficit for the first three months of
this year.
These figures were authorized by
Director General Hines yesterday
shortly after estimates of the Bureau Of
railroad Economics. compiled from In
terstate Commerce Commission reports
disclosed that the deficit of the class.
roads of the country for the first quar-
Ter of 1919 amounted to nearly Sl33
000, 900. Tho director generals fig
ures include not only class | roads. but
= all other railroads under federal con
troll, the expenses of the central aud re-
gional administrations and the operation
of the inland waterways.
The disastrous showing of the rail
road administration for the first three
months of this year Mr.. Hines attrib-
uted TO Il sharp falling off in business
and the inability of the railroads sud
denly to readjust their expenses to the
period of reconstruction through which
the country is passing.
On the other hand. Mr.. Hines dc
clared the railroad organizations were
working TO readjuSt these costs and the
future months were certain to witness
substantial increase in business.
with the revenues therefrom reflected in
& the net, because the cost will not be
correspondingly increased. He also
took exception to the figures issued by
the Bureau of Railroad Economics be
cause, he assorted, January. February
and March always have earned less as
railroad months than three twclfths cf
the return for the year.
Oppose Rate Increase
In Summing up the situation, how
ever, the director general expressed
himself as opposed to au increase in
rates at the present time.
.'Conditions arc too abnormal" he
said, ito serve as basis for any general
change in the level of rates, and it is
preferable TO defer action ou that sub
ject until more normal conditions
obtain
The figures of the railway bureau
places the three months net operating
income for class 1 roads. including
switching and terminal. at $50. .S13 900,
as compared with an average III the
three year test period 1914-1G of
$172.7 .79S.000 Tho January deficit was
$37 $500 In February it was S3I.
S2S, 900. and in March it amounted to
3 $57 1927 900. The net operating income
: for March was S10,924 600. as com
x pared with the March average in the
test period of SOS, ,251 900.
This report also shows that traffic
declined very sharply in March, the
freight traffic falling 23.2 per cent below
year ago. as compared with 13.5
per cent decline in February and n 10
3 per cent gain in January. Operating
revenues were S3T6 .345 900. gain of
per cent owe" last year, while the
vxpehses rose 22.2 per cent to S346,-
100000, leaving net revenues of S29.
Il 574, 600, n loss of $50 per cent This
left q net operating income. After taxes
and minor deductions. of S1O,924 900,
loss of S2.5 per cent.
The eastern roads failed in March to
earn any net operating income. They
had deficit of 81 .2S3 900 The
southern roads earned 81 4S9 900 and
the western earnings were S7.I10.(D0.
These earnings will be even less when
adjustments of back wages are made
for recent wage increases granted the
trainmen's brotherhoods. These recen'
increases are adding about $500, ,OOO
3 month to operating expenses.
The comparison of operating results
with the average for the same months in
the three-year test period before the
government took over the roads, are
made by the railway bureau as follows
FIRST quarter lo15:lol7, Increase or
1919 average decrease
esd.las sSHS' dCS ss2l DO 600 1904 oes oo
III i .osi. 7S6. 900 500 81 600 +4s2 ls5 Oo
so. sI9 600 IT, 7os, 600 t1sc asi. OO
tinerease'. 81 per per cent. cent
% tDecrease, II per cent.
sThe results for the calendar veal
191S,' said Mr.. Illness statement
L. a Al.N 4 ~.
deficit incurred by the railroad admins
tration for that year after dcductin!
the rental due the railroad companic
amounted to S226, 900 900. This in
cluded the expenses of the central an,
regional administrations. and also in
4 cludcd the operations of the inlan,
waterways under control of the rairoa,
4 administration as we'll as the incdenta
and miscellaneous items which mus
< be taken into account in a Complet
statement. There remained compare
lively small amounts of back pay TO
3 the calendar year 1918 which were no
charged into the accounts for that year
but which have largely been charge
Into the three months ending wit
March, 1919.
For the months of January. Febru
ary and March, 1919, the aggregat
deficit incurred. after deducting tn
~ rental due 10 the railroad compa MES
was approximately S192 900 900. Gen
orally speaking, these three month
M have always earned much less tha
three twelfths of the return for the yea
fso that a substantially less charge G
E rental into these months would not b
iunppropriate. Still it seems preferabl
Il, charge full one twelfth of tn
rental into each OF these months rathe
flRn to run the risk of an imprCssiO
= Nfising that there is any disposition I
understate the actual results
Due to Business Conditions
"To a large extent the unfavorab
results for January. February an
March are due to the fact that the bus
ness has fallen off and that expens,
I'D not be correspondingiy readjuste
4 that the loss largely arises in cor
Jon with the period of readjus
through which the country is g
Industrial enterprises general
n .<-vt suffered embarrassment on accou
of the fact that business has been cul
| tailed so much more rapidly than O.
uenees could be curtaiied. The raj
fond business is probably, in its natur
lcxs elastic than any other business al
shows more unfavorably the embarras
\. <ntnts Of REIMBURSEMENT.
II ''Since the first of the year | ha
Il 2 corf<rred repeatedly with the region
Q1reftors and have also conferred wi
h<ar'y all the federal managers in t
IIntfcI ftates ON the subject of cost