The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1920-05-14
WHAT THE RAILWAYS COST THIS
GOVERNMENT


eminent operation--January and
February 1920-were among the
best months in point of volume OF
traffic handled and gross earnings
made, and relatively the worst in
point of net return earned. under
government operation, is shown by
an editorial in the currant issue OF
The Railway Age.
Complete statistics regarding the
freight handled, the total earnings
made and the expenses incurred by
the railways in January and Feb
ruary. 1920, the last two months OF
government operation, are now
available" says the Railway Age
1.-The total business moved, because
of conditions which on the whole
were favorable, was much larger
than it was in any preceding jan
uary and February in history. 1t is
therefore worth while to compare
the statistics Of traffic, earnings and
expenses for January and February
1917, the last time when the rail-
ways were under. private operation
in these months, and the correspond
ing figures for January and Feb
ruary, 1920. the last two months
when the railways were under gov
eminent operation.
IF
mile in January and February, 1917.
was 61,000,000,0 900. In the CORES
ponding months Of this year it was
81, 470. 100000, an increase of 101a
per cent. Total earnings in January
and February, 1917, were 1856, 2o0,-
900. In the same months of this year
they were 1897 800. 900 an increase of
421s per cent. In January and Feb
ruary, 1917, operating expenses were
$423, 100000 while in the same
months of this year they were $685.
600, 900, an increase Of So per cent.
1.-THE increase in operating ex-
penses was so much larger, relative
ly than the increase in earnings as
to cause a heavy decline In net
earnings. There were also some in
creases in taxes. The results of all
these influences are strikingly re-
fected in net operating income,
which is the part of earnings left
after paying expenses. taxes, and so
on. The net operating income of the
railways in January and February.
1917, under private operation was
Sos, 931, 900. In January and Feb
ruary, 1880, which marked the term
nation Of government operation the
net operating income was only ST.
100000.
''The guaranteed standard return
for January and February was $104,-
100000. The net operating income
actually earned was less than 1 per
cent of this amount, the govern
ment's deficit in the two months be-
ing over $103.000.o00. The guaran-
teed standard return for an entire
year was sos, O0O.O 900. 1t will there
fore be seen that if government op-
GRAFTON had continued throughout
1920. and the net operating income
earned had been relatively as small
as it was in January and February,
the deficit incurred would have
been almost equal to the total guar
anteed return.
I'm spite of the coal strike, which
began in November and ended in
December, the gross earnings in the
six months September to February
inclusive, were $2.775, 900, 900, or al
most $165, 100000 more than they
ever were before in any correspond
ing six months, and yet the net OPP
Grating income was $257, 100000 less
than the amount required to pay the
guaranteed standard return for that
period. These statistics seen a COM
plete vindication of the contention
the Railway Age repeatedly, has
made that as large an advance in
rates would have been necessary un-
der government operation to stop
the mourning of a deficit as will be
necessary under private operation to
secure to the railway companies the
net return provided for in the trans
portation act.
Whether the increase in operating
expenses under government opera
ton was reasonable or not beside the
question. The fact is, that an enorm-
Gus increase Of expenses did occur
under government operation, and
that under either government or pri-
vate operation it would have been
impossible, without an advance OF
twenty-five or fifty per cent in rates,
to make the railways self-support-
ing"