The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1920-11-27
Railroad Ne1Us of Week
BY " E. BUNDY.
BY v. E. BUNDY.

dard return guarantee was continued
thru the six months period OF read
justment in order to protect the roads
from bankruptcy until the necessary
increased rates could be determined
by the interstate commerce commits
sion, and put into effect.
Four factors given IN the rail-
road publication as having prevented
the roads from earning the standard
guarantee are:
Four Things Blamed.
That the roads were returned on
March / without having their rates
readjusted to the existing higher level
of wages, increased prices of materi-
ais. and higher taxes.
Shortly after the return to private
management, the railroad labor board
raised wages again for a total of about
1925, 000,0 900 a year, and made the in
crease retroactive to May 1. This
alone added to the deficit approx
mately $2O8, 900, 900.
The readjustment in rates necessary
to meet increased cost of operating
could not be determined for six
months, and could not be made retro
active.
The roads were returned with main
tenance of equipment so much behind
that extraordinary expenditures were
inevitable to handle the unprecedented
traffic demands.
Not Fault of Roads.
THE conditions under which the
railroads operated during the six
months, from March l to September
1, were not established by the rail-
roads, and would have affected the
income of the roads had they remained
under governmental control just as
they did under private control" says
the railway journal, thus claiming
complete immunity for the private
managers of the road, as far as the
matter of saddling the $66S,O0O,00O
deficit on the government is con-
cerned.
The slump in earnings started be-
fore the railroads were returned to the
management of their owners, the pub
lication insists, pointing out that the
deficit in the operation of the roads
in 1918, under government control,
was 1886, 100000, while the deficit the
next year was nearly double, being
S464, 100000.
stockholders Didn't Get 1t.
at may be noted at this point" says
the journal, that the 66S,000,000 of
deficit was not a result
of additional payments to stockholders
of the railroads. The owners of rail-
road securities are receiving today less
than they did before the war. The
ratio of dividends to total amount OF
stock outstanding in the hands of the
public before the war was nearly SIS
per cent. Since then the dividends
have averaged about 4 per cent.
That the deficit could not have been
caused by inefficiency in operation. as
to volume of business done, is urged
by the railways with the statement
that the volume of freight traffic car
ried by the railroads for the first seven
months of 1920, despite the switch
mems strike, exceeds the net tons car
ried one mile, during a corresponding
period. in any of the past three years,
including the period of federal control.
Furthermore. using figures from the
interstate commerce commission, the
railroads claim that they have reduced
the cost of moving a freight train
mile, below the cost which was being
borne during federal control, every
month since that time. and that with
comparatively no more freight cars.
they have nevertheless moved more
freight.
Moro Work-Lcss Cost.
Summing up their argument, the
railroads assert that they have taken
the equipment turned over to them by
the government at the end of the pc
riod of federal control and have made
it do more work at less cost, than the
government was able to make it do.
They further maintain that the
stockholders are not getting any more
money, and that therefore the deficit
which the public must dig up in the
form of taxation, is due to the bad
condition of the roads when they were
returned to private management, and
the increases in wages which have
been granted since that time.
THE importance of the wage in
creases can hardly be overstated."
American Railroads" puts it, in the
discussion.
SPEND MUCH ON MAINTENANCE.