The circle banner. [volume] (Circle, Mont.) 1914-1939, 1920-05-14
NEED MONEY FOR
ROLLING STOCK
RAILROADS ASK GOVERNMENT TO
LOAN THEM FIVE HUNDRED
MILLION DOLLARS
SHORT 226, 900 FREIGHT CARS
Are Unable to Borrow Money on Their
Own Credit for Equipment-Big
Sum Required to Raise In
come to Six Per Cent

Washington, May S.-Railroad ex-
ecutives Thursday asked congress for
an additional $50O,0O0,000 with which
to buy rolling stock during the coming
year.
Appearing before the senate inter-
state commerce committee. representa-
tives of the carriers declared that a
serious and general car shortage ex-
listed throughout the middle west and
that they We're unable to borrow
money on their own credit for freight
cars needed to remedy the situation.
Samuel Rea. president of the Penn
sylvania system, speaking for the
roads, said that the government. if it
furnished the money, could take equip
ment trust certificates for security.
and hold them until they could be sold
advantageously to general investors.
Some idea of what the roads needed
in the way of equipment was given the
committee by Il. y. Brown. chairman
OF the ST. Louis & San Francisco rail-
road, who declared the present short
age amounted to 226.000 freight cars,
$3.50 locomotives and 5000 passenger
cars. He believed they could get along
for time with 100000 freight cars
and 1000 locomotives, the total cost
of which was estimated at S616.O00.0O0.s
Mr.. Brown testified that the carriers
had paid as high as ~ per cent in
terest on equipment funds in the open
market. and finally had been told that
S150O00,000 was all that could be bor-
rowed for that purpose.
Western railroads need an addition
al 49,, 800. 900 to bring their net in
come up to the six per cent on their
property investment of $500. $4,000
provided by the transportation act,
interstate commerce commission was
informed by Samuel NJ. FELTON,. of Chi
cago, chairman of the western eXeeu-
tive rate committee.
To provide this sum. freight rates
in fhe territory west of the Mississippi
must be Increased "a per cent. lie said.
With the presentation of this appl-
cation, the commission had before 1t
the request of all the trunk line rail-
roads of the country for increased
rates. Dates for hearings will be set |
later if any protests against the rates
are filed.
Mr.. FELTON, told the commission that |
railroad facilities were not commen-
surate with present plans.
..There is congestion in many
points," he said. Lumber and grain
from the northwest are
chOked back because of insufficiency
of available equipment, and the same
is true of fruit shipments from the
west grain from the middle west. coal
and coke, ore. vegetables, automobiles.
articles and merehan-
lise from other sections.
Declaring that the net income of the
western carriers fell from $3.50. 191 900
Il 1916 to S261 100000 in 1919, Mr..
Felton told the commission that re-
.asting of the 1919 account TO the pres
mt cost of labor, coal and materials,
educed the current net basis TO $685. {
I2T 900. To raise this income 10 six
,er cent of the property. Investment Z
will require he estimated. an increase
# II per cent in all revenues. Since
here is no intention to raise passen-
,er tariffs the needed increase must ..
,e obtained by advancing freight rates
"A per cent.