The sun., 1919-01-20
Billion Dollar Payrolls a
Year to Cause Deficit of
S500,0OO,000.
BIG DROP IN RAIL TRAFFIC
Roads Revolving Fund Of
s500,OOO,O0O Is Virtually
Exhausted Already.
lSnccini Drspafch 10 TIE suN.

Railroad Administration, prODhDiy on
fat 10 per cent. basis, Is likely. Pas
senger rates will not be affected. Such
an advance is under serious considera-
tion by the Railroad Administration
and an announcement is expected in
the near future. 1t is understood that
passenger rates are to be affected.
Costs OF Government operation OF
the roads and Of wages have advanced
beyond the original estimates and an
increased revenue from some source is
regarded as absolutely necessary. Early
estimates on the results of operation
of the first year OF Government control
and on the probable results OF 1919 op-
erations made by Director-G General
McAdoo before he left Washington are
undergoing revision as more complete
statistics become available. A general
review Of the situation indicates clear
" that at the end OF the year there
will be a deficit of something like
quarter Of a billion.
The question of wages is the largest
single factor in this deficit on a years
increases already granted reach a larger
total than was estimated and another
substantial raise for the brotherhood
men is in prospect Part OF the differ
ence in wages figures results from in
creased forces following the armistice.
Tramc and Revenues Drop.
In addition revenues are falling off.
for there has been a decline in traffic
since the end Of the war. The original
revolving fund of $50o.o0o.o00 has not
only failed to revolve. but I. practically
exhausted, and the Railroad Administra-
tion Is facing a serious situation. II
must have additional revenue through
further increased rates to meet the sit
ustion or take The rooney from the tax
payers by Congress appropriations ur-
der the Government guarantee. The
only other alternatives are operating
economies, which are impossible with
public demand for better facilities now
that the war is ended. or a reduction in
wages. The latter alternative has been
dropped from consideration as absolutely
impossible.
Confronting this situation 1t is known
that Director General Hines. his assist
ants and advisers and the regional di-
rectors of the roads have conferred sew
eral times in the last week in an effort
TO solve the problem. 1t is virtually
agreed that the only solution is a rate
raise. The effect of such a course on
the public is being weighed against the
necessity for the action. Serious as II
may be It will probably have to be
brushed aside.
Railway operating revenues that
jumped to sl37 900. .000 IN July under
Inc ?5 per cent rate raise have been
falling steadily and somewhat alarm
ingly ever since. indicating the shrink
age in traffic from higher rates and the
temporary" slowing OF industry fol-
lowing the signing of the armistice.
They dropped to s127 100000 IN Au-
gust. sss.000.000 in September. Ss7.-
100000 in October. s57,000.OO in De-
cember. 1t is conceded that the Jan
uary figures in any event will not show
an Increase
Revenues Larger but Insu Mcient.
Despite this dropping off the revenues
under Government operation for the six
months were s2,soo.ooo,o 900, or at the
rate OF $500. .000, 900 year. as COM
pared with only $4,000. 900. 900 in 1917
under private control and operation.
Before leaving the railroads Director
General McAdoo estimated a deficit fol
tos year Of 1886, 10000. Later re-
visions. official and unofficial, place the
total near the s25O,O0o,00O mark.
Estimates for the current year that
have heen the subject of several con
ferences here in the last few days In
dioate at least an equal deficit for the
in ri a. I
McAdoo estimate of saving of s1o0.
100000 that would make possible a re
duotion OF freight rates before the enc
o. the year Instead an advance seem!
certain.
Tho increase In wages has gone hun
d-eds Of millions beyond estimates made
when Director-General McAdoo RAISED
fe.gh, and passenger rates last sum
rner. II was then believed that $500.
oOOoi0 would cover all wage advance!
necessary TO enable the employees t.
meet the higher cost Of living.
When Mr.. McAdoo appeared befor'
ne Senate Interstate Commerce Com
n''ee two weeks ago he estimated tina
me advances granted by the Govern
'nent aggregated 3650.00O,0 900. But IL
Conferences last week more complet
te'Nrns were at hand, showing thu
amount to be s900.000.00o.
Wage Increase Billion a Year.
That this increase in the railroad
payroll will reach a billion dollars |
year within a few days Is believed In
t''ahle AS the result OF the coming re
p'rt Of the wage board that has beei
bearing the demands of the trainmen'
h'o'herhoods The four brotherhood
obtained very little from the genera
wage advance last year because of tn
Tact that they had received $60.000.0O
vance under the Adamson eight hou
.t" But since the large advances mad
n'0er employees they have been In
'-'fn' On another upward revision o
t".r ates ~ pay.
TT is understood that the wage boar
.-- recommended 10 the Director-Gen
an Increase for the brotherhoods a
:" as they gained under the Adam
t' aw and unofficial estimates plac
it5 amount close to 100000. Thi
BRING the total wage advances ur
d. Government operation to be roun
u 0oo 100000 or about 65 per cent.
Mr., MeAdoo underestimated by $3.50
A..H n.