Evening journal., 1919-01-02
RAIL Deficit
is sl5O,OOO,OOO.
Figure Does Not Include
Big Sums Loaned
Carriers
SIX MONTHS TO
RECOUP THE LOSSES

WASHINGTON, Jan. 2.--The govern
ment's loss in operating the railroads
in 1918 is calculated by railroad sd-
minlstration officials at less than $780,
100000. This represents the difference
between the aggregate amount the gov
srnment will be compelled 10 pay rail-
road companies as rental for the use OF
lheir properties-the sO-called guar
anteed reulrn-and the net income
which the government will receive from
the railroads.
IL will take six months more OF re-
ceopts from the increased freight rates
10 permit the government to recoup It's
losses. officials belie,I II Congress does
not approve the proposed flve-year eA7
tension OF Fedefal control, and as
consequence President Wilson carries
out his announced intention Of return
ing the roads to private management az
an early date. the governments loss
will not be made up.
This deficit does not include the Dig
sums-between SiJ0,OOOOOO and. s2OO'-
OOOOOO-which have been loaned TO
railroads TO help them pay for the ex-
tenslVe program Of Improvements and
purchase of new cars and locomotives.
These loans will be repaid eventually.
The governments loss cannot be
stated exactly until the compensation Of
each road is finally determined and un-
Oh the Interstate Commerce Commission
complies figures on earnings and eX-
penses for November and December. Or
ncials believe, however, that the aggre-
gate government compensation FOR all
roads will be about s95O000.O0O. and
that the net income from railroad op-
erations. credited 20 the government,
win be a little more than SS0OOOOUOl
For the ten months up TO November 1
the governments net income from the
railroads, as reported BY the Interstate
Commerce Commission, was S6O5,O0e,-
600.
Operating expenses for the entire
yea-, officials calculate, proDaDiy
amounted 10 sI.sO0.OOO,OO. more than
ever before In railroad history, aid
operating expenses probably ran up to
S3.sOOOOOOOO. This left si.OO0OOOecO OF
net revenue which was cut down more
than S2OOOOO,OOO by deductions fer or
binary taxes. rentals for equipment not
owned by railroad companies and other
incidental losses.
War taxes. and expenses OF maintain
ing financial and other corporate offices
including salaries OF officers not actually
employed in physically operating the
railways. must be paid by the railroad
companies. out Of the S9J000.000 which
the government guarantees them.
For the railroads. 1918 was year
which broke all records OF revenues
and expenses. Although receipts were
nearly 90 per cent. greater, expenses
were even more. u took so per cent
Of the operating expenses, although
only 20 per cent. was taken for this
purpose in 1917 Operating expenses,
which. with estimated figures fO- the
last two months. amounted to S3,so0,-
10000. were si,OO0OO0,OOO more than
in 1917. Increased wages are estimated
variously TO have been responsible Tor
between S6O0,OO0000 and SS0O,O0000 OF
this billion.
In the ten months ended November
4 for which the Interstate Commerce
Commission has compiled definite re-
ports. receipts from freight. passen-
ge- and other revenue sources, were
Si,032 100000. or little less tnan Jne
si.Oii. 10000 revenues for the entire
wear OF 1917. In the ten months 3D.
Sis.OOOO0O came from freight and $780,
10000 from passenger traffic.
Operating expenses for the ten months
amounted TO S3.2I7.O00.Oo0, or about
siOO.OOOOO0 more than the S2,s520OO,-
400 expenses for the entire year OF
1917. So-called transportation expenses,
including the bulk OF the cost Of run
ming the trains. amounted to $685.
100000; maintenance OF cars and loco
motives cost 100000, and mainte-
nance of tracks. roadway and structures
cost 1921. 100000.
Most or these figures probably will be
raised 20 per cent. by returns for the
last two months.
The reports do not include small roads
with less than 100000 revenues a
year.
Eastern roads in the ten months re-
ported Si.s2s,OOO,O00 revenues and
81 sol 10000 expenses; western roads,
sl,3i9.O0OOOO revenues and ss90O0OO0
expenses. and southern roads, S6i2 000,-
900 revenues and Si93,0O0,O00 expenses.