New-York tribune., 1919-07-03
Operating Expenes S Mil
lions Day More Than Be-
fore Government Took
Over Control of the Lines
May Loss Near 80 Millions
Hines May Urge Early Boost
. in Freights to Benefit
by Big Crop Movement
NetU York Tribune
W1sh;noto,1 BurenM

VUSHeNDtOb bureau
WASHINGTON, July 2.-That rail-
road operating expenses are now S5,-
100000 day higher than in the period
prior to government operation is
shown by reports made public tonight
on the May operating results of the
large roads of the country.
For the first i've months of 1918
the average daily expenses for labor
and materials have been S11,48O,OOO,
as compared with $6,41O,00O in the
three-year test period (1915-17) upon
which the government war guarantee
of earnings is based. This is an ad-
vance of 70 per cent, and is an annual
increased rate Of expenses of $1,7OO,-
0O0.
That readjustment of freight rates
to meet the new level of costs for
labor and materials will be recon-
mended by the Director General to
the President on his return to Wash
lngton is now believed to be inevita-
BILE. How much the increase in rates
will be, and what commodities will be
affected, will be determined it is un-
derstood, through conferences between
the Railroad Administration and the
Interstate Commerce Commission The
rate advance will become effective, it
is believed, before the movement of
in the fall, in order that the govern
ment may benefit from the added rev.
enues during the remaining months Of
Federal control of the carriers.
The May deficit, as shown by pre-
hmlnary summary of returns to the
Interstate Commerce Commission, will
be close to $39,O0o,O00.
Operating revenues for May were
S407 7.942,O00, an increase of 9.3 over
1918; operating expenses were $780,
S61, 900, an increase of "a per cent, and
the operating income after taxes was
S3S.530,000, loss of 46.4 per cent. The
standard return, or May average net
operating income, in the three year
test period is S77,426,OOO. This leaves
government deficit for the month of
s98,896,o0o May freight traffic, while
l3.5 per cent under the record figure
for May, 1918, is only 1-3 of / per cent
below the test period average for the
month.
For the first five months Of the year
the net operating income is S1O4,445,-
000y as compared with $317, 7,642 900
earned in the same months in the test
period, leaving $213,195, 900 to be made
up by the government on its guarantee.
The five months freight and passen-
ger traffic is about per cent in ex-
cess of the same months in the test
period, but, due largely to the higher
rates, the operating revenues for five
months are S1,923 100000, as compared
with S1,363,000,000 in the test period,
a gain of S56O,0o0,oOO, or Al per cent.
The five months operating expenses
are S1.728,0oo,0oo, as compared with
S968,o0o,000 in the test period, an in
crease of s76o, 100000, or 70 per cent.
That operating expenses are now on
an even keel at the high level reached
several months ago, after the last of
the big wage advances, is believed by
railroad operating men to be indicated
by average daily expenses for the first
five months of the year.
Advances in freight and passenger
rates since the end of the test period
have produced additional revenues, ac-
cording to railroad estimates, of
1.200,o 100000 a year, leaving $500,ooo,-
600 OF the higher operating costs to be
met by further readjustments in the
rate etr,1 cfura