The sun., 1919-04-06
Railway Earnings Are Hundreds OF
Millions short OF the Rentals.

a"hWay hoFuuBs AEc huuuEcub VI
Millions short OF the Rentals.
AS business enterprise the Rail-
road Administration Of the United
States Government Is In the miro up
to its waist. The American people,
upon whom must press the whole
weight of this gigantic load Of f1nan-
cial misadventure and failure, are in
past their ears.
To operate successfully the roads
which it has taken over, to pay rent
ais, to maintain equipment, to pro-
vide for extensions, betterments and
improvements-in a word, to run the
roads as American roads should be
run, the Government needs above op-
Grating expenses in round numbers
some two billions Of dollars a year.
But forget provision for the future;
disregard even keeping the roads thor
oughly in proper condition; ignore
the meeting of maturing obligations.
Still, merely to pay the rentals for
the roads, the Government must have
SOIHe Illut uuuuIcu VI uOlldIS
year.
Because the Railroad Administra-
tion wanted to be sure of making the
roads earn that nine hundred millions
Of dollars year due on the rentals
the first thing the Government did
when 1t took them over was to slap
billion of dollars on the backs Of the
American public in higher freight
bills and passenger fares. But in
spite of that prodigious direct tax on
the public the roads, under Govern
ment operation, are not earning that
rental of nine hundred millions of
dollars a year. They are not earning
half of 1t. Before this year is over
1t may be proved that they have not
been able to earn quarter Of 1t
perhaps, the way they are going down
hill, not n penny Of 1t.
For the first two months Of this
year we have the official record of
earnings, and 1t Is staggering. Some
nine hundred million dollars a year
to be earned means an average of
some S75,OO0,O0O month. But what
the roads actually earned last Jnnu-
airy, under Government operation, was
some $1S,OOO.000. What they nctu-
ally earned in February was some
$10,000,000. This gives for the two
months an average of some $4,000
600, as against the required average
Of some 100000 a month. At this
rate the Railroad Administration for
the whole year would fall short of
earning the rental alone by the as
founding sum of three quarters of a
billion of dollars.
It Is true that, even under private
management, the roads rs a rule never
were as large earners in the winter
months as In the milder seasons New
ertheless, it Is fact that the railroad
business never before knew two such
favorable winter months for operation
as the mild and snowless January and
February Of this year of 1919. There
we're no thousands of frozen switches
to thaw out. Miles and miles of trains
were not stalled in deep drifts. Mill,
ions OF tons OF traffic were not tied up
Billions of dollars of transportation
machinery did not lie motlonless and
impotent to earn.
Furthermore, with all the bad
weather.. with all the traffic conges
tlon, with all the confusion and de
moralzation of the war conditions in
the three years preceding the Govern
ment's taking over of the roads, they
earned under private management. II
each first annual quarter Of the whole
three-year probationary. February
and March-and earned at the lower
freight and passenger rates, monthly
average of nearly $57,0O0,000, a.
against n second quarterly average OF
some $75,000,0O0 a month, thirt
quarterly average of some $4,000, 900
and a fourth quarterly average Of
some $S4,0OO,0O0. ..'',
Now, even If the Railroad Admin
istration under Government operation
should show in the second quarter o
this year as much improvement owe
the first quarter as private operation
always has shown, and should show
MS much improvement in the third an,
fourth quarters over the second quar-
ter as private operation has Away
shown. nevertheless, the average ne
earnings for this year of 1919, undc
Government operation, still would b
only slightly In excess of $1SO00.00
month rs against the $75,000,O0O
month needed by the Government
merely TO pay the rentals.
Putting the most hopeful possible
face on the situation, therefore. wha