New-York tribune., 1920-02-01
Coal Strike
Cost Roads
Ill Millions
Hines Says That Deficit
After Two Years Fed
eral Operation of Rails
Reaches S594, 200, 600
Ncw York Tribune
W1shindton Bnrcnu

FFuSNtngtOn bureau
WASHINGTON. Jan. 31.-More than
100000 was lost by the railroad
administration during November and
December on account of the strike of
the soft coal miners.
This fact was set forth tonight in
statement issued by Walker D. Hines,
Director General Of Railroads, in which
he shows that the total deficit to the
taxpayers to date, after two years of
Federal operation Of the railroads of
the country, is $594, 900
Incidentally, although the director
general made no mention Of it, official
figures reveal that two years of Fed
eral control of Pullman lines, water
ways and express companies added
another $lO0 100000 to the deficit, max
ing total loss OF nearly 500, 1000 900.
In regard to the railway loss, Di-
rector General Hines maintained tnat
II the increase of rates which became
effective in June, 1918, had become
effective January l, 1918, and there
had been no coal strike, government
operation would have shown a profit of
approximately $7,500,000 instead of a
deficit His statement follows:
LAS has been heretofore explained,
the destructive effect Of the coal strike
was particularly severe upon railroad
operations in November ard had even
greater accumulative effect in Decem-
Der, IN which month the dislocation of
transportation became exceedingly
serious. There had to be a drastic
temporary curtai!ment of passenger
service and every element of operation
and traihc movement was made more
difficult and less profitable. The result
IS that these two months. which should
have shown little, ii any, loss in the
absence of this adverse influence.
showed total loss OF Sill, 100000, af-
ter allowing for two o-twelfths Of the
600 after allowing the proportion of
the annual rental corresponding to the
proportion of the annual net operating
income which was earned in these two
months OF the test period. The details
for November have heretofore been
gwen and a preliminary statement for
December is shown below.
Loss Placed at S594,20O 600
AS December completed the second
year of Federal operation. it is desir-
able to call attention to tie fact that
during the two years of Federal oper-
atlon, including, of course, the two coal
strike months of November and De-
cember, 1919. the loss, after allowing
tor two years rental, was 1894 200 600.
II the increase in rates which became
effective in June, 1918, had be come eff
Iectlve on January |, 1918, the Ell. ire
loss TOR the two years. after psying
the rental, would have been s104 .00O,-
900, which is more than accounted for
oy the loss in the two coal strike
months OF November and December.
1T is only fair to say that the in
creased rates were in effect all of the
year 1919, and that if the year 1919 be
considered by itself there appears a
loss of about S349 200 900. Of this loss
SIS 100000 occurred in the first six
months OF 1919 and was very largely
accounted for by the abnormal and pro
Ionged slump in freight business fol-
lowing the armistice, and practically
all OF the remainder of the loss except
S3,0OO,O0O is accounted for in the two
coal strike months of November and
December, 1919.
Adjustment Made for Back Paw
The preliminary report of the oper-
atlng results for practically all of the
class | railroads and large terminal
companies IN Federal operation indi-
Gates that the net operating income of
the month of December 1919. from the
operation of these properties will be
about l2,700,000 This represents a
loss of $62 300 600 to the government.
after allowing for one-twelfth of the
annual rental of 5000, 600 600. or loss
OF $50, 800, 600 when comparison is made
with the income earned in the average
December of the test period"
In stating the results OF Federal
operation in 1919 and 1918 Mr.. Hines
said adjustment was made for back
pay included in the operating expenses
for 1919, which was applicable to 1918,
and adjustment was also made for back
pay in the four months ended October
81, 1919 applicable to the SIX months
ended June 30 1919.
The operations for October" he
said, have also been credited with
s6,000,000 on account OF per diem
charges between Federally operated
lines included in the eanpment rent
Tor the month, which represents a mere
bookkeeping entr., and the operations
for 1918 nave been charged with like
amount to offset a CORES ponding book
keeping entry in July, 1919. when per
diem charges were discontinued be-
tween the Federally ODprarad Iio.c