The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-03-05
RAILROAD PROBLEM
! sAlARMS BANKERS
Assert Senate Failing to Pass
Deficiency Bill Creates
Serious Situation.
RENTAL PAYMENT BEHIND
Financiers Say Extra Session
or Return Of Roads Soon
Is Imperative.

ls Imperative
-
Local bankers were unanimous yes
sexa.y IN exur,..,nr tb.,r oo,r,or tb.. .
..
cipitated ~ the failure OF the Senate to
pass the deficiency measure, carrying
sr,onv oth.r ,h,r~. On. r,oro.., q, IA
go 80 40
s'eo'"VV'vvV =" tne roVoi'ne tuho ~
was asserted that the Railroad Adminis-
tration had bean left hish and dry. and
a. .ar,,,,.a ,h.. .,.h.~ a. ..,...
s'''-S' .Ae
OF the congress IN extra session at an
early date had been rendered imperative
or the railroads would have to be re-
fu,ure.
Bankers agreed that no small problem
had been thrust upon Walker D. Hines.
Director General Of Railways to tide
over the period until the new Congress
could replenish the revolving FUND. In
some quarters II was stated without re-
serve that II could not be done. even
with the war Finance Corporations aid.
II was said also that II the Administra-
ton wished TO be vindictive 1t could
HAND the roads back to their owners on
short notice. In no quarter was there
disposition to minimize the financial DIFF
hculties brought about by the predica-
ment In which the roads and the Rail-
road Administration had found them
selves.
In the hryt place the Government II
FAR behind In payment Of rental con-
tracts. At the close OF the year the back
payments due the roadg amounted to
$ssl. 000, 900. and By now, Il IL estimated,
the amount must exceed Sl0o, 900, 900,
The roads depend on the payments on
Account Of rentala n make THAR divi-
demo declarations. and bankers asserted
yesterday that directors OF MANY roads
wouId bs obliged IA 6efer dec,a ra tion ~
dividends miles. m. Adm,nIstrat,op VIA.
nut IN . ,oa,,,op % r,aLa navm.n,.
Receives Half 1913 PAYMENT.
IN tne case oI tne FennsyNsniA TALL
roao atone' sccoruins 10 the annual re-
poIt' the ROAD mao received only eoout
haii OF ns rental contract lot 1913 ana
nothing on account OF the nrst quarter OF
1918.
BANKERS are IN no position 70 lend
they expect to continue loans outstand-
ing. Banks are confronting the strain
incident 70 the forthcoming Victory Loan
They nave practically no railroad oe-
pos1ts.
The pennsylvania Railroad, which 10
Cptoal, showed by Its annual report that
on December 81. 1918. It had less than
u,eo0,00o cash on hand. Under the cir
cumstances the roads have 20 look 70 the
Administration for cash Az
The Director-General Of Railroads Is
hopeful that the roads this year will be
able to earn net operating income In ex-
cess OF rental guarantees OF approx
mateIy S7b.000.0OO monthly. but expert
railroad men are Tar from sanguine on
that point. Under most favorable oper-
ating conditions for January the roads
earned only about VS.. 100000 net oper-
ating income. against $75,ooo.0oo due on
rental contracts. 1t Is not expected that
February accounts will show much i'm
provement. Much to harm operating re-
suits may appear during March. Al the
end OF 1918. with 100000 owed on
rental contracts. the balance In the re-
yolving fund was less than 50,ooo.000.
Under the circumstances, since the first
OF the year. bankers say, II is obvious
that the Administration Is operating n
hand to mouth basis.
Kali contracts Heid Op.
Aside from the embarrassing situation
created for the companies on account of
further DELAY on rental contract pay
merits the failure of the appropriation OF
$3.50. 900. 900 for the revolving fund. II
IL said. holds up contracts about TO be
placed for 1000. 900 tons of steel rails.
the programme of improvements for this
m.nt being delivered on orders placed in