Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1920-08-31
RAILROADS WILL
ASK S6OO,0O0,0O0
T0COVER DEFICIT
Governments Guarantee,
Ending Tonight, Costs
S100, 100000 a Month.
FEW LINES MAKE ENOUGH
TO PAY OPERATING COSTS
Southern Railway One of Few
Companies Which Declined
Treasury's Support.
tBy Associated Press. ]

WASHINGTON. August 30.-Rau-
roads of the country will begin oper.
alton on their own resources tomor-
row night after having cost the gov
ernment approximately 100000, 900
monthly for the six months in which
their earnings were guaranteed by
the transportation act. The carriers
Will be allowed further aid only
through icans from the revolving
tund which the act created.
Earnings OF the roads will fall
about 5000, 100000 below their stand
ard return for the period since March
!. according to estimates today by
the bureau of railway economies.
Fewer than half n score OF lines have
produced revenue sufficient to equal
actual operating expenses. which does
re: include the fixed charges of in
tereSt. taxes and dividends.
Definite figures on the cost OF the
government Of the earnings Cuaran
tee provisions OF the transportation
act Will not be known for several
months, or until the various systems
are able to complete the mechanical
task OF balancing books ana giving
dctai!ed hEureS.
WIFI 1invc Money Dne Them.
Most ali OF the roads, however. have
indicated already to the Interstate
Commerce Commission. and through
1t to the Treasury. they will have
money coming to them as a result Of
the guarantee. The Treasury has re
ceived dozens of certificates for ad-
Vances under the guarantee within
the last ten days. and more arc ex-
pected tomorrow. Secretary Houston
said. IL the roads do not ask for an
ADVANCE against probable deficits be-
lore tomorrow night they must wait
ior final compilation OF the sums
me government owes them.
vi the l.l43 lines OF consequence in
the country, Coz have accepted the
governments proposal for a division
Oh the surplus above the standard re-
'uF" ana guarantee of earnings
shouid the revenues fall short All
ot those accepting the proposal will
DC ehtiiled TO final adjustment OF
accounts by the Treasury and tho
payment, where the revenues wore
low or the guaranteed amounts.
among the lines not accepting the
guarantee proposal, were the South
ern and Pere Marquette systems
Neither OF these have earned reve-
hnes equivalent TO the amount which
'hey would receive under the guar
aHtee. according TO julius TT. Parme-
lee. director of the bureau of raIlw,y
economics.
Topped Expenses Once.
In the first four months OF the
guarantee period, March. April Nav
AKA June, railroad revenues toppcd
actual expenditures for ope-a, on
only once. The March revenues ron
resented not return OF sl3.7Oo 0oo
while there were deficits of $50 700 ooo
in April. sl1.SOo.OoO in May and 81.
100000 in June.
Official figures have not been com
piled by the Interstate Commerce
Commission for July and Aucust hu,
Mr. Parmelee estimated deficit for
both months. basinE his calcul, t;ona
on the results of the same months
last year. Traffic in those two
months established record for v,I-
umc, yet the lines were abIo IN nr
dnee revenues OF only $1,000. oOo and
Sl5.0oo.o0O respectively for InIv ana
august above the standard return of
S'o.oOO,OOO month
Aaditional expenses not vet ac-
counted for. Mr.. Parmelee said, un-
douptediy would cut down the reye-
hues for the two months.
For ;hc reason that tho dno,;,
oee'' so great. officials are preparing
10 give close study to the result or
ne recent rate increases. The In
'erstate Commerce Commission csti-
li'a'ed The Increased rates would yield
sl.o00,O0O,OO0 annually
''u' th's sum will not be sufficient. II
WAS argued. unless traffic comes I'm
uhprecedented volume and there Is n
decrease in the costs of operation.