Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1920-11-22

dends. after ali prior charges was Sl,-
5s9.S10 pc rannum, or about 4-lo
times the amount necessary to care
for the preferred. and to pay six per
cent on the common. To put it in an
ether way. Maine Central was spend
ing only 7o.5 cents for operation out
of each dollar OF operating revenue.
and was saving 29.5 cents with which
to meet taxes, fixed charges. leases
and dividends.
Even in the calendar year 1917.
when the effect of increased wages
was partially felt, the management
was able to salvage 24.4 cents out of
each dollar of operating revenue for
taxes and incorporating costs. In
that year, the balance for dividends
was $1,125,543. or more than one
third in excess of the necessary
amount
The full effect of government con-
troll. in 1918 and 1919. presents woe
full contrast to the thrifty days that
had gone before. In 1918, instead of
a profit. the Maine Central lost more
than half a million dollars in the
actual operation of it's trains, and
after it had paid the interest on it's
bonds and it's leased lines, it's losses
had mounted to S2.399,1S1. On top of
that came the dividends. taking an
other $4,000. The next year. in
1919. it once more lost money from
the mere running of its trains. and
writ int - Il
bonds. its loss for the year was $3.-
315.65o. without counting the $50, 900
which it paid in dividends to its
stockholders. In the three years be-
fore the Government came into the
property, the road had railway oper-
ating income of s2,9sO.s43 but for the
, L. years of Government operation
there was an average deficit at the
rate of S1,0iS.155 each year. Of course
these are not real losses in the sense
that this much value went out of the
property. 1t came out of the Govern
ment. instead. but it shows the direc-
ton in which the road had turned
under Government operation.
Thrown into cold figures. the re-
suits of three years in which Fed
eral control. or the influences of it,
are SO marked. give nothing on the
side of hopefulness for the future
But one need not be gifted with sec
ond sight to perceive that there are
numerous ways n which private
management can bring about a better
showing. One of the first moves has
been to recover the rolling stock that
had been scattered promiscuously
oyer the country. Ordinarily Maine
Central had figured that 80 per cent
OF its rolling stock would be on its
own tracks. When Sthe road was
handed back last March. but 80 per
cent. of the rolling stock was at
home and the remainder was scat
tered through various systems.
There are left three ways in which
Improvement can be made, namely a
reduction in price of COAL j more ia
Torabie division of through freight
rates and smaller payments in ex-
else taxes TO the State of Maine.
Maine Central has already present
ed its claim to a larger share of the
revenue from trunk line traffic. Bush
ness coming to Maine Central from
| the trunk lines. or leaving Maine
central over these systems repre-
sents about 20 per cent of the whole
traffic. and if the adjustment asked
for is granted in full, Maine Central
should increase its revenue by about
S1,S00000. presuming the volume of
freight remains constant. Traffic be-
tween Maine and other New England
states. which represents about so
per cent. of the gross business. and
traffic originating and ending within
the State of Maine, which represents
/ about 30 per cent. of the gross, has
already received substantial adj
vances, and changes in these rates
Will be considered only when other
means of improvement have been ex-
hausted. Lastly. there is the hope
for relief from a part of the excise
taxes levied by the State of Maine.
Taxes represent between five per
cent. and six per cent. OF the total
operating costs. and the road is now
paying nearly $1,500,0 900 of taxes. in
Guiding the Federal tax. The pros
pect that the people of Maine may
see their way clear to reduce this tax.
or even relieve the road entirely of
taxation for year or two. while it
receivers from its present ills, is not
particularly far-fetched. -
So far as the stockholders are con-
cerned. the present situation is far
from pleasing, but it has not resulted
in any large amount of reckless SELL
ing of shares. To be sure, the price
for the stock has been run off ia pidly
but transactions that brought this
decline have totalled only a few hun
dred shares.A To discuss the
time when dividends can be resumed
is fruitless, but it is certain that
stockholders are far from being in a
hopeless position. and can reasonably
expect that the time of missing div
idends will not be of long duration.