New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1920-08-01

satisfactory condition that has existed
and still exists.
witnesses for the carriers were un-
able to state EXPLICITLY what econo-
mics IN operation, If any, may be
presently effected.
On the other hand, the opinion was
expressed that certain increases in
operating expenses are apparently uN-
avoidable, During the war passenger
traffic was unusually remunerativc he
cause of troop movements, elimination
of unnecessary trains and heavy load
ing of passenger cars The movement
of troops has practically ceased, and
it is the view of the carriers that a
larger number of passenger trains will
have to be operated. During the war,
in part because of war necessity, there
was marked increase in the loading
of freight cars. 1t is apparent tina,
there may be increases in expenses not
related to the general increase in
prices. which may Offset any economies
that may be effected in other direc-
TONS
On treating property investment"
which involves the valuation of the
railroads, the decision reads:
''The calculations Of the carriers as
to the increases in revenue needed by
ton that the commission should per
NIT the return of per cent on the
book figures for investment in road
and equipment, improvements on leased
railway property, materials and sup
plies and government allocated equip
ment, hereinafter referred to as book
cost. Their contention is that the ag
gregate value of the property of the
carriers in each group, held for and
is substantially in excess of the ag-
gregate of the amounts shown as their
respective book costs.
Decline in Income Seen
"The carriers recognize the inirmi-
ties inherent in the investment &C
counts as carried upon the books of the
carriers, as a measure of the value OF
the respective properties taken separ-
ately. But they contend that it is
appropriate for US to use the aggre-
gate of such figures as the basis Of
our calculations, tested in the light Of
the work of our Bureau of Valuation
as thus far progressed, the tendencies
thereby shown and the conclusions to
be drawn therefrom by those famailiar
with the work so far done, and also by
consideration of such matters Of COM
mon knowledge or within the knowl-
edge of the commission as bear upon
the subject.
"Not only has there been a sharp
decline in railway operating income
during the last three of four years,
but the operating ratio has increased
at rate that causes serious concern.
For the period of five years, beginning
with 1912 and ending with 1916, the
Eastern carriers were spending out of
every dollar of operating revenue re-
caINaS = cpnf-S for n
Grating expenses. This increased to
1903 cents in 1917, to $3.50 cents in
1918, to SS.5l cents in 1919 and to 1888
cents in the first four months of 1920.
Needs Called Conservative
when it is considered that operat-
ing expenses do not include railway
tax accruals, uncollecrable railway
revenues, joint facility rents, hire Of
equipment. rents for lease of road, in
terest on funded and unfunded debt
and other fixed charges, dividends and
certain other items, the above figures
are significant The operating ratio
for the first four months Of 1920 means
that during that period, after payment
Of operating expenses, there was left
232 cents out OF each dollar for the
payment of taxes and other items JUS,
mentioned. During the period Of six
years, beginning with 1912 and ending
with 1917, it took approximately 2S.19
cents out of every dollar of operat-
ing revenue to pay the items men
toned which are not included in oper-
ating expenses and which are not con-
sidered in determining the operating
ratio
If the basis of The carriers calcula-
tons be accepted as proper, an analysis
Of the results of operation for carriers
in the Eastern group during the first
four months of the saiendar year 1920
Indicates that the Eastern carriers were
conservative in estimating their revenue
reeds. 1t will be recalled that these car
r&rs, after finally adjusting the. figures
r1pr the constructive year, arrived at a
net railway operating income of SIS
6SS2f9. TIE actual results of operation
'fcth the first four months of the
-clrr1:ent calendar year show net
railway operating deficit Of $S70,2 10
Becshnsa of unusual conditions that OBJ
.tnfE,esb an the Eastern group during the
+eariy opnrt Of the fear it IS unsafe to
rassume that the results for the first -four
assRths fairly Indicate what the results
wnI be for the year. and the figures are
aefsrred to merely to show that during
-fsls pqgiod the situation was even more
.nnfaEo4able than the carriers pre-
ohGt@sA1
IliW thin the last nine years passenger
otgastss, in the United States has in
creased more than 40 per cent, said the
sGofAm ission, which offered in proof the
4fpl.QWing table:
Number of revenue passenger miles for
s-f%h year 1914 10 1919. Class l roads:
-3e9r United States Year. United states
ntxdf1 S32.371 .444. 7o8 1916 S83 .s45 sos i50
w $2.3l6,es2,5t9 1911. So 47s.s5s, $40
-'8i5 3.S'o.ON5."5S 1918. 80, 616.579.l9g
efylfi. 34,3t6,9s3,4l4 1919. f6.145,07O, Sal
Fl -
IN Passenger fares were increased to
Ga minimum rate Of cents a mile on
june 10, 1918, resulting in an increase
OF 90 per cent where 2 cents a mile
was the basic fare, 20 per cent where
- cents applied and no increase
where the fare was cents or higher
It appears that rates a passenger mile
have increased since 1916 as follows
In the Eastern group q per cent
in the Southern group 27l2 per cent
and III the Western group 221a PEI
cent The relatively small increase in
the Western group is due to the fact
that Scent basis prevailed more gen
orally in that territory than in other
parts of the country.
Passenger Profits Grow
an part because of conditions grow
ing out of the war the passenger traffic
has become relatively more profitable
during the last three years. A rcduc-
ton in the number of trains occurred
simultaneously with & sensational in
crease in the number of passengers car