Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-01-29
The Causes That Have Led To
Railroad Losses and Deficits
Railroads Have No Control Over Wage
Scales, Taxes and Other Tremendous
Fixed Charges Names Condition

WASHINGTON, d. Co., January &C. 1921 (Specal).-
The Railroads throughout the nation are making siren
efforts these days to restore their credit and ma
way by which they can finance much needed improve
ments They back to private control March 1920,
and the Government guaranty ceased Sept. 1st While
they have very vivid realization that the responsibility
for continued efficient service has been returned to them
they the less confronted by conditions largely or
entirely beyond their control.
The roads were taken over by the Federal Government
as measure. Their operation enailed huge loss
which fell upon the Government rather than the individual
railroad companies Now however, unless receipts exceed
disbursements the railroad companies must suffer directly
and this is the situation which confrons many of them
today. How to meet it is the problem they trying to
throughout the country and they having
time of it.
In the first place. the Railroads realize that passenger
and freight rates already high basis and they
hesitate to ask for further increases Instead of in
in the volume of business is doubtful the next
few years equal the showing made under condi-
tons and the two years following the Armistice Little
relief be expected from increased and the
railroads must therefore look to savings in expenses.
That they realize the difficulty in reducing expenses
is manifest from the talk hears all sides. The
charges for railroad operations divided roughly into
four groups wages materials and supplies taxes and in
terest.
The situation respecting materials and supplies and in
terest fairly we'll understood by the public there
when taxes and wages considered Interest rates
high which means that the railroads of the country
whole must enormous additional burden for
this ITEM
Coal, iron steel, ties and other material which goes
into the item of supplies still high compared with
the period and the roads must pay the prevailing
prices. The public understands this
Where there is direct property tax, OF tax on net
income it is not difficult for the public to understand that
present demands affect the railroads Just as they do all
other tax payers. But is not generally understood that
of the State the taxes increase every time the
Railroad to increased expenses
though the net balance is not increased with the
crease in rates. For example, Railroad finds itself re-
quired to increase its 1919 meet wage in
crease In the States referred to pays excise
the State of certain percentage of it's gross revenue
may be that the 1919 increase in just offsets the
wage increase but it also 1919 increase in State
taxes That u.s. if it's payroll increases 100000 and it
increases rates to produce like sum- so State tax
takes $4,000 in taxes leaving only S95OOOO toward the
million dollar increase in wages.
This condition prevails only in California Connecticut
Maine Minnesota, Ohio Rhode Island Vermont and Vir-
gina which States levy part all of their State Rail-
road taxes upon gross earnings regardless of whether
the Railroad Company taxed is operating profit or
loss.
Wages however, is the subject which one finds the
gravest misunderstanding. One continually hears the
n2sd1t
representative Of the Natona,