The Lancaster news. [volume] (Lancaster, S.C.) 1905-current, 1919-05-09
Blames Reduction in Business
as Largely Responsible for
Deficits.
RATES WILL NOT GO UP
Director General Prefers to
Wait for Restoration of
Normal Conditions in Bust
HeSs' 1".E;a ~ Ia,

washington, May S.-Director
General Hines in discussion of re-
cent railroad earnings disclosed
that:
The governments deficit in oper
ating the railroads for the first three
months this year, or the difference
between net earnings and one fourth
or the guaranteed annual compen
satfon was about s192, 100000 for
all roads under federal manage
ment.
The governments loss for 1918
was 100000.
Ihe entire government loss in
Cured in 15 months OF federal op-
Grafton was s41S. S.OOO.OOO
Marked reduction of freight traf-
fc under records of similar periods
OF the last two years were RESPONSE
Bile for the bad financial showing
and condition in April. though not
vet fully reported show no promise
OF Improvement.
Despite the big government def
cits the director general does not
contemplate any general increase in
the level of rates but prefers to
await restoration of normal business
conditions.
The government also incurred a
deficit of about s14,54O,OO0 in eight
Railway Express company the con-
solidated express corporation up to
March 1. 1919.
THE present unfavorable result
naturally lead to an agitation of the
question whether there ought to be
an Increase OF rates." said Mr.
Hines in his statement, my own
judgment is that the present condi-
tions are too abnormal to serve as
basis for any general change in the
level of rates and that It is prefer
able to defer action on that subject
until there shall have been a fuller
opportunity to get more reliable
and possibly a more normal meas
ure OF the conditions. meanwhile re-
sorting oevery practical economy
studying the situation with the
greatest care and keeping the pub
lie fully informed as to develop
ment"
In Excess of Estimate.
The deficit OF s192 100000 in
CURED by the government in Jam
uary. February and March as figur-
ed by Mr.. Hines, greatly exceeded
the estimate made public earlier in
the day by the bureau of railway
economics because Mr.. Hines cal
culated the guaranteed compensa-
tion. The bureau OF railway eco
Monies calculated each months
share on the basis OF the average for
that month in the three pre-war
years. The railroad administra.
tion's figures also included small
roads, not included in the so-called
class l. which are under govern
ment control, and also expenses OF
the central administration and cost
OF operating inland waterways.
Mr.. Hines explained that his sys-
tenn of calculating tended to show
the railroad administrations posi-
tion rather at disadvantage for the
first three months. but added:
"Still IT seems preferable TO
charge fun One-twelfth Of the rem
tai into each of these months rather
than to run the risk OF an impress
sion arising that there is any dis
position to uuder state the actual
results.
Business Falls or.
ITO large extent the unfavora-
BILE results for January, February
and March are due to the fact that
business has fallen off and that ex-
penses could not be correspondingly
Headjusted so that the loss largely
arises In connection with the period |
OF readjustment through which the
country Is going. Industrial enter |
prises generally have suffered ~em |
on account OF the fac |
that business has been curtailed so |
much more rapidly than exrenses |
have been curtailed. The railroad |
business is probably in its nature
more elastic than other business and
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