Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1919-05-25
Director Claims Operating De-
fiCit for Past -Four Months
Due to War and After the
War Conditions.
DECLARES BULK WILL
BE SOME DAY REPAID
Money Tied Up in Working
Capital Is Expected to the
Returned to Government
When Roads Pay.


| Washington, May 24--Appropria-
! ton of $1,000. 100000 in addition to
! $500, 600 900 already provided. for use
of the railroad administration during
| 1918 and 1919 was requested today by
/ Director General Hines.
The estimate revealed that there
had been an operating deficit OF
| $236, 1S4,940 during the last calendar
| year and of $3.50, 100000 during the
first four months of 1919.
OF the total of 1000, 900 ap-
| propriated and requested. Mr.. Hines
said that $1.214,000 900 eventually
would be returned to the government.
This includes money tied up in work.
ing capital and advanced on account
to the railroad corporations.
Mr.. Hines said that in his judgment
the operating deficits for 1918 and
for the four months in 1919 were
clearly due to the war and to abnor-
NAL afterthe-war conditions Because
of the present changing conditions he
declined to make any prediction of
the financial results of operation dur
ing the remainder of the year.
Hines Letter.
Mr.. Hines letter. which was writ
ten to Secretary Glass and trans
mitted by the latter to congress, said:
THE operating deficit of $236,tS4,-
940 for the year 1918 was due largely
to two facts: First, the winter Of 1913
! was unprecedented in its severity and
! in its costly effect on railroad opera
Z, tions and second, the increases in
| passenger and freight rates averaging
about 2h per cent were in effect for
only a few days in excess of six
months, while heavily increased ex-
penses due to war conditions were ef-
fective on an ascending scale through
out the twelve months
THE operating deficit of approXi-
mately $3.50 000, 900 for the first four
months of 1918 is due in part to the
cumulative high levels of cost brought
about by the war for labor and ma
terials and in part to the sudden and
abnormal falling off If business as a
result of the cessation of war activi-
ties. The sudden drop in the demand
for fuel for other basic commodities
and the general state of hesitancy due
to the transition from war conditions
to peace conditions, the fact that the
present period is TRANSITIONAL and ap-
parently on the eve of important
changes has made it expedient to de-
fer, until the matter can be accurately
measured, the consideration of the
question now frequently raised of an
increase in rates.
Clearly Due TO War.
In my judgment the deficits for
1918 and for the readjustment period
of 1919 are clearly loses due to the
war and ought to be treated as such.
BY reason of the abnormal after-the-
war factors tending to important
changes in the situation the estimate
herewith submitted does not attempt
to forecast results beyond the first
four months of this calendar year.
IF the amount here requested shall
be appropriated the total appropria-
ton for the railroad administration
will have been $1,700. 100000.
'Of this amount $1,214 100000 will
represent amounts which should be
returned to the government $425,-
10000 thereof being temporarily tied
up in working capital and SITS, 00O,-
600 thereof representing amounts
which have been and will be advanced
for the account of the railroad cor
porations and which it will be their
duty to repay as rapidly as practic-
able. About $4,000 900 will repre-
stint expenditures for equipment on
inland waterways
OF the entire $1,700. 900, 900. s4S6,-
100000 represents the aggregate loss
to the government up to April so,
1919, on account of the two deficits
above explained.
THE sum of approximately $223,-
100000 for increased working capital
is requested because experience has
demonstrated that the amount OF
working capital actually available for
current use on December 81, 1918,
was insufficient to admit of the free
and unrestricted payment of payrolls
and vouchers for materials and sup
plies throughout the country. There
is manifestly great advantage both in
the economical purchase of materials
and supplies and the handling of such
transactions to the satisfaction of the
business public in having an ample
supply of working cash so as to avoid
delays in making payments"
Needs in Detail.
The detailed items listed by Mr..
Hines in shis letter requesting the ap-
preparation were as follows
Requirements for 1918:
Amount necessary TO defray operat-
ing deficit-the difference between
the standard rental payable to the
railroad companies and the net oper-
ating income for the year 1918, $685.
1S4,940.
For net excess of current assets
over current liabilities. partly
improvements of inland waterway,
$2,641 $50,
Amounts advanced for account
railroad companies TO enable the
pay in part their current liaF
800, 900, 600
Amount of additions anS
ments expenditures, incluP
ment, made to the railroad
properties during 191Sa
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