Every evening, Wilmington daily commercial., 1920-08-31
U,S,TO END BACKING
RAILROADS TONIGHT
Have Cost Government 5000, ,OOU,-
600 in Six Months Of Guar
antec.

Washington, Aug. 3t.-Rallroads oi
the country will begin operation on their
own resources tonight after having cost
the government approximately SloU,,"o,
600 monthly for the SIX months IN WHICH
their earnings were guaranteed by the
TRANSFORMATION act. The carriers VIII pe
allowed further aid from the government
only through loans from the revolving
fund which the act created.
Earnings of the roads will fall about
5000 OOO, 900 below their standard return
for the period since March /, according to
estimates Yesterday by the Bureau OF RAIL
way Economics. Fewer than half a score
of lines have produced revenue sufficient
ia equal actual operating expenses,
which does not include the fixed charges OF
interest. taxes and dividends.
DEFINITE FIGURES NOT KNOWN.
Definite figures on the cost TO the gov
ernment of the earnings guarantee pro-
visions of the Transportation act VIII
not be known for several months, or until
the various systems are able 10 complete
the mechanical task of balancing books
and giving detailed figures. Most all OF
the roads, however have indicated al
ready TO the Interstate Commences Com
mission and through it to the Treasury
them as a result of the guarantee.
The Treasury has received dozens of
certlfcations for advances under the
guarantee within the last 10 days and
more are expected tomorrow, Secretary
Houston said. If the roads do not ask for
an advance against probable deficits be-
fore tonight. they must wait Tor hnal
compilation of the sums the government
owes them.
OF the 1914 lines of consequence in the
country. CO.. have accepted the govern
ment's proposal for division of the sur
plus above the standard return and a
guarantee of earnings should the revenues
fall short. All of these accepting the pro-
pnsal viii be entitled TO a final adjustment
Of accounts bv the Treasury and the pay
ment where the revenues were low, OF the
guaranteed amounts.
TWO BIG LINES HOLD OUT.
Among the lines not accepting the
guarantee proposal were the Southern
and Pere Marquette systems. Neither of
these have earned revenues equivalent to
the amount which they received under the
guarantee, according to Julius III. Par
melee, director OF the Bureau of Railway
Economics.
In the first four months of the guarantee
period. March, April, May and June, rail-
road revenues topped actual expenditures
for operation only once. The March
revenues represented net return OF sl3,
100000. while there were deficits OF 500
100000 in April, SlI 500, 900 IN May, and
S7,500,000 in June.
Official figures have not been compiled
bv the Interstate Commerce Commission
for July and August, but Mr.. Parmelee
estimated deficit for both months basing
his calculations on the results of the same
months last wear. Traffic in those two
months established record for volume,
vet the lines were able to produce revenues
OF ONLY S2.OO0.000 and $4,000 600. re-
spectiveiy, for July and August. above the
standard return of SIS, ,0O0,0 600 a month
Additional expenses not vet accounted for
Mr.. Parmelee said undoubtedly would cut
down the revenues for the two months
WAGE AWARD HEAVY DRAIN.
The wage award. he said, would add
more than $50, 600, 900 to operating ex-
penSes for each month, while about 5000
100000 in back pay to employees viii come
out of the eaInings of July and August,
unless the corporations have sufficient
funds on hand TO draw on a reserve.
For the reason that the deficit has been
so great officials are preparing TO give
close study to the result OF the recent rate
increases The Interstate Commerce
Commission estimated the increased rates
would WELD approximately 81 900. 600, ,00C
annually. But this sum viii not be suf-
fcient. II was argued. unless trade comes
in unprecedented volume and there IS 3
decrease in the costs OF operation.