Evening star. [volume] (Washington, D.C.) 1854-1972, 1919-05-25


the $500, 100000 appropriated by the
last Congress. and includes the $780,
100000 which failed of appropriation
when the session ended in a tilibuster.
Hearings to Begin Tuesday.
Chairman Good of the House appro-
prtatfons committee said last night
that hearings on this matter will be
started Tuesday. and that some recon-
mendation by the committee might be
expected within week.
Approximately S4S6, 900. 900 represents
the governments loss in operating the
railroads from January /, 1918. when
private control ended. and May ! last.
This is the difference between the sums
for which the government is obligated
10 pay the roads on contracts and the
net actual operating income from OPP
erations. The balance. or about $1,214,
100000 of the $1,700, 100000 now ap-
propriated or sought, represents work
ing capital to be repaid to the govern
ment eventually. This was explained
by Mr.. Hines in his request for the ap-
preparation submitted to Congress
through Secretary Glass
The deficit last year was 236,184, 900,
and in the first four months this year
the governments loss was about $780,
100000.
Director Hines Statement.
Mr. Hines letter which was writ
ten to Secretary Glass, and transmit
ted by the latter to Congress said:
The operating deficit of 1896, 1884,
$40 for the year 1918 was due largely
to two facts: First. the winter of
591S was unprecedented in it's severity
and in it's costly effect on railroad
operations, and. second. the increases
in passenger and freight rates aver
aging about 25 per cent were in eff
feet for only a few days in excess OF
six months. while heavily increased
expenses due to war conditions were
effective on an ascending scale
throughout the twelve months.
The operating deficit of approx
matefy S250.000. 900 for the first four
months of 1919 is due. in part. to the
cumulative high levels of cost brought
about by the war for labor and ma
terials and in part to the sudden and
abnormal falling off of business as a
result of the cessation of war activi-
ties. the sudden drop in the demand
for fuel and for other basic COM
modities. and the general state of
hesitancy due to the transition from
war conditions to peace conditions.
the fact that the present period Is
transitional and apparently on the
expedient to defer, until the matter
can be more accurately measured. the
consideration of the question, now
frequently raised, of an increase in
rates"
Losses Due to War"
'Tn my Judgment. the deficits for.
1918 and for the readjustment period
Of 1919 are clearly losses due to the
war and ought to be treated as such.
BY reason of the after -the-war fac
tors tending to- important changes in
the situation. the estimate herewith
submitted does not attempt to fore
rcast results beyond the first four
months of this calendar year.
IF the amount here requested shall
be appropriated the total appropria-
tion for. the railroad administration
will have been s1.700.O00.000.
of this amount $1.214.0o0.000 will
represent amounts which should be
returned to the government. s425.00O.-
900 thereof being temporarily tied up
In working capital, and 100000
thereof representing amounts which
have been and will be advanced for
the account of the railroad corpora
tions and which it will be their duty
to repay as rapidly as practica BILE.
Ahount $4,000, 900 will represent ex-
penditure for equipment on inland
waterways.
.'Of the entire s1.7o0. 100000, $780,
100000 represents the aggregate loss
to the. government up to April 80.
1919. on account of the two deficits
above explained.
The sum of approximately $685.
900. 600 for increased working capital
is requested because experience has
demon strated that the amount of
working capital actually available
for current use on December 81, 1918,
was insufficient to admit of the free
and unrestricted payment of pay rolls
and vouchers for materials and sup
plies throughout the country. There
is manifestly great advantage both in
the economical purchase of materials
and supplies and the handling of such
transactions to the satisfaction Of the
business public in having an ample
supply Of working cash so as to avoid
delays in making payments