Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-08-08
REASONS WHY LOCAL BANKS
SHOW LOSSES IN DEPOSITS
Corporations Have Been Heavy Users In
Lieu Of Borrowing at High Rates-How
Advance In Rates Will Affect Roads.

, cessions But they are feeling the
market at this time and much money
| has been taken out of the banks for
| this purpose.
Courteous Action.
Local banks are loud in their ap-
prevail of the action of the Richmond
| federal reserve bank in it's courteous
method of politely informing an off,
cial of a bank that is deficient in re-
serve or in excess of it's pro rata Dor
| rowing. that so and SO is the case
offering opportunity for remedy.
Greatest Factor Of Week.
Clearly the most encouraging fac
tor of the week has been the generous
treatment accorded to the railroads
of the country by the Interstate Com
merce Commission.
The nation has outgrown its rail-
road systems. The latter have proved
utterly inadequate to the needs of the
day and have lost much of their eff
cheney since the war. Perhaps they
have not been given as generous
treatment as has been accorded to
their employees and they needed, and
badly needed. just the elixir that they
have been given to enable them to
make betterments to fill their duty to
the country.
1t remains to be seen just what in
iuence the increased rates will have
on the high cost of living. Carriers
have called attention heretofore to
the fact that freight adds very little
to the 1-s+ of many articles.
IT, Should certainly en-
a. ads of the nation to
r mselves for the work
Ie n. Their failure the
|! among other things,
! Die for the holding over
Z quantities of wheat and
OF n nrOduCo which nrOdncarS
ana elevator men were unable to for
ward to central markets. This was
one reason also for the money strin-
gency.
Another favorable influence of the
advances in freight and passenger
rates will be found in the throwing
off of the burden from the shoulders
of the government, an aid to econo-
mics and saving in the public affairs.
By reason of various complications.
war, railroad guarantees, etc, the
government has been the most per-
nous payments of taxes Of one kind
and another.
How Increases Affect Roads.
The Wall Street Journal presents an
interesting table showing the net
operating income of railroad COM
panies actually reported for the year
1919. and then shows. side by side,
the increased income that would have
resulted had the advanced rates been
in effect in 1919. In considering this
table one must remember that the
recent wage award was not in effect
in 1919, so that the increase will be
materially reduced by the wage set
Element.
The Wall Street Journal has this to
say:
These theoretical percentages on
stocks, therefore. are not to be TAX
en- as forecasting actual results. but
only as indicating the relative earn
ing power of the different issues. as
measured by the traffic and general
conditions of 1919, adjusted to the
new rates and wages. In most cases
actual results will doubtless be less
than those indicated by this method.
In the first column is stated the net
operating railroad income actually
reported for 1919 Irrespective OF
government compensatory, in the
second column the estimated net OPP
Grating income as it would have been
with the rate increases and wage
award in effect, in the third column
earnings on stock before
one-hah of the excess over
6 per cent on property account, and in
the fourth column earning on stock
after making such deduction.