The sun., 1919-01-25

Agents and conductors balances. slst, 900 900
Advances temporarily made TO
| railroad corporations on open
| account for which In effect
| materials and supplies held
CoiIhteral 100, 900 900
Total Observation-Disclosures. ,e64. 900 900
ties 1904. s6s
Balance OBSERVATION-DISCLOSURES. SOL. s52 1856
| This net balance of these current
assets will become again available In
cash at the end OF Federal control, but
pending Federal control is inevitab bly, tied
! up as n part of the working cash capt.
tai Of the Railroad Administration.
"t3) Loaned New York, New Haven
and Hartford Railroad Company $751;
! $4,000. This amount will be eventually
: paid with interest, but the greater part
: OF 1t and perhaps all OF IT will not be
paid until after the end OF the calendar
| year 1919.
! 20 Invested In necessary additions
and betterments actually made during
the year 1918 over and above the
amount which the companies can i'm
mediately repay out of their rental and
out OF the balance due them on open
account for the calendar year 1918
$500, 91s.2s3
Will he Paid Eventually.
This amount will eventually be paid
| with interest to the Railroad Admins
tration. The rapidly which 1t can be
paid is dependent upon financial condi-
tons and without undue interference
with tho financing of the Government
| Total 1851 ,4i5.4lS.
| 1T will be observed that while all this
amount Of cash IL temporarily tied up
In the Governments conduct of the rail-
| road business II Is expected that the
entire amount will be eventually repaid.
but temporarily II cannot be repaid as
above Indicated and therefore provision
has to be made for carrying it.
| %. In addition the Railroad Admin
istration will have paid the operating
loss for 1918, lie. the difference between
| the standard return due the railroads
and the net operating income derived by
the Government from railroad opera
| tons. this difference amounting to $780,
| 900. 900.
| This loss was due largely to the fact
| the Increased rates were effective for
| only six months approximately while in
creased expenses we're effective TO a very
large extent for the entire twelve
months. due partly to the unprecedented
! weather last winter tthe railroads hav-
Ing shown an operating loss OF over
SlOO.o00.oo0 for the first four months OF
| 1918 as compared with 1917. althoug n
4 Tor increased wages were included in
| those months, and the corporations
| themselves were still operating the roads
| as agents OF the Director Genera), and
partly 10 conducting business at what
ever cost was necessary to meet the
| needs OF war. This represents the only
| item in the entire expenditure for the
calendar year 1913 except a portion of
the next succeeding item). which is a
| loss 10 the Government and ought frank
! ly to be charged as part OF the cost Of
the war and should be regarded as an
! exceedingly low cost for the result ac-
| complished
"s. In addition. the Railroad Admin
istration has expended during the year
1918 In connection with inland water
ways s4,36l4Ss
"Of this amount 100000 represents
| operating deficit during the year 1915
| IL must he remembered that this operat-
| ing deficit was incurred In the early and
| formative stages Of Government operat-
Ing upon the inland waterways and can
not be regarded as Indicating in any way
| that similar losses are to be expected
| when the operation shall be fully de-
veloped The balance, or s3ss1.4sS. req
resents boats and other property ac-
CURED by tho Government for operation
or inland waterways and OF course can
and vii! continue TO be so employed
Grand total. $751; 06.904
| Amount OF revolving fund. $500. 600.
Amount TO be provided to settle all
accounts for 1918. S3Sl,S06.
Approximate Figures Used.
"ln order therefore 70 settle in full
accounts OF the Railroad Administration
for the calendar year 1915 IL will be
necessary 10 provide the additional sum
Of s3sl'so6.so4, which together with the
| revolving fund OF $500. o0O. 900 appro-
priated In the act OF March 81. 1918, Will
meet the transactions of tho Railroa 4
Administration for the year 1918, all Of
| which have been outlined above. II
must Of course be understood that the.
figures used are necessarily only ap-
| proximate at this time because ac-
counts Cor the year 1918 have not been
completely stated and cannot be prior TO
| March l at the earliest
For the calendar year 1919 financial
provision must be made Cor the follow
ing:
"G) To finance expenditures con-
tempiatei on inland waterways, sle.-
$4,000.
"t2) To fancing Boston and Maine
reorganization. s20.Q0o.o0o
"(3) To finance equipment ordered
in 1917 and 10 be delivered In 1919.
s2S6. 900 600.
| " u lliihIC!nS OtNeT necessary
| capital expenditures for additions and
betterments. including equipment. s4sl.-
600, OO0.
Total. sso9s4O, 600.
LESS portion OF companies rental
| which can be devoted to capital expend!-
lures. $4,000.
Balance to be provided. ss59,s4o 900
THE last item above mentioned OF
s49l 900 900 represents forecast OF
capital expenditures which will need TO
be made during the calendar year 1919
including these which were authorized
and not entered upon or not completed
durips the calendar year 1918. Under
existing conditions II Is the purpose, gem
orally speaking. to avoid the making OF
| capital expenditures without the assent
| OF the corporations. but with such
| vast transportation system II is be-
lieved that the expenditure OF s49l ,00O,-
900 will be required during the year and
will be substantially assented to by the
corporations themselves
"a very large part OF these expendi-
lures must be provided for In the first
few months OF 1919, and we are COM
PEELED to allow for the situation that dur
ing the period prior TO the next Liberty
Loan campaign and during that cam
paign II would not be desirable or
practicable for railroad corporations to
do large part OF their own financing
Under these circumstances | am OF
opinion that $3.50. O00.0 900 is the mini
mum appropriation which will eua bio
the Railroad Administration TO carry as
above explained the money that is
necessarily tied up in the Governments
conduct OF the railroad business and 10