Norwich bulletin., 1920-05-05
FINANCIAL NEEDS OF
 RAILROADS PRESENTED I. c. c.

Washington, May 4.-(By The A. P.) The nations railroads will need an addi-' tional S1,017 ,00O, ,000 to bring their in come to the six per cent basis provided in the transportation act.
 Through the Association of Railway Executives, the roads proposed to the h. terstate Commerce Commission today that this sum be realized through in creased freight charges, leaving the pas senger rates at the present level
 The advances in freight rates proposed for the eastern roads were BOA per cent to yield an advance in all revenues of 21.1 per cent, or $544, 100000.
 Presentation of the figures marked the formal opening of the railroad rate case. Detailed statements submitted to the commission today covered only the east ern lines.
 The rate figures of the eastern lines, embracing IA systems terminal and switching companies were laid before the commission by Daniel Willard, president of the Baltimore and Ohio and chairman of the executives rate committee for the eastern territory
 Net income of all of the country's rail- roads fell from S1,056, 6,000,000 in '1S16 to $510. 100000 last year, the railroads claim, while their investment has in creased more than $2,000, O00,O ,O00. These figures were given to serve as basis from which the commission could work in de- veloping a scale of rates to meeting the government guaranty.
 An estimated valuation of $20,616 000,- 900 was placed on the transportation sys- tens of the country by MT. Willard. While there has been an increase in op- erating expenses of 99.1 per cent. since 1916, the roads basis of revenues for the same period has been increased only 36.37 per cent, the executives statement declared, and the operating expenses of 1 the lines now are 99 per cent of the rev enues against 6S per cent. in 1916. This year and next, the eastern lines i alone face the renewal of nearly $250,- | 900 900 in maturing obligations MT. Will 1 lard said in discussing the problem Of fl, nancing the roads. Some of these loans and bonds have been bearing an interest rate as low as 1-2 per cent. and MT | Willard declared that in taking care l of this amount of obligations at the cur 1 rent rate of interest necessitated tht most careful study of the revenue pro duction question in order that the roads
 credit be kept unimpaired. l tsThe carriers must now reassume tf1 burdens and risks of operation in per iod of uncertain conditions affecting bus
 mess generally" MT. Willard said 'Th
 demands for additional facilities and ex | tensions were never so pressing as now I The cost of new capital is more than per cent per annum even to those rail
 road companies whose credit is the best
 Victory Loan bonds are selling cur
 rently on a basis of return in excess o
 six per cent. New industrial issues, wit
 which railroad financing must compete
 are offering returns from 1-2 to pc
 cent in addition to liberal commission
 for their sale and distribution, and un
 deriving bonds of substantial railroad
 may be bought on basis to yield pc
 cent. and in some cases in excess of per cent. Further, the European markets, here
 tofore available for American railroa issues, are now closed to us and in fac are absorbing our surplus funds, an this applies not only to Europe, but t practically the whole world inciudin Japan and the east.''