Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1921-08-02
Belief Is Expressed That
by End of July Roads Will
Be Earning 6 Per Cent In
tereSt
BY WILLIAM p. HELM, JR.
Ueased Wire Service to The Journal
(Copyri2ht. 1921

WASHINGTON, July 30.-There is
every reason to believe that on this
thirtieth day of July the railroads of
the United States, taken as a whole,
can look back on a month when their
net income has been at the rate Of 6
per cent annually on the value of
their properties. Such a condition
even at the height Of the country's
wartime prosperity.
Reports of railroad activities for
June-earnings, expenses and in
come-are now pouring into the in
terstate commerce commission at
such a rapid rate that almost every
hour of the day changes the totals.
AS this is written there have been
footed up the totals for 1872 class
one carriers Chose doing business
the footings show the biggest month,
from an income standpoint, this
year. The result is bigger than the
more hopeful element of the carriers
executives had looked for and has
frankly surprised even them.
These carriers, which operate 49,
430 miles Of main line, or slightly
more than two-thirds of the total in
the country, show net income of $46.-
5000 during the month Of June. In
June a year ago the same carriers
reported deficit of $8,190,00O, The
span between the two reports ap-
proximates S55,0OO,O0O and is made
in the face of a falling-off in total
revenues of 5.8 per cent for June,
1920 saw business at floodtide and
there has been a recession since.
There is no telling. of course, what
the other one-third of the country's
mileage will show when its reports
are in. If it keeps pace with what
is in already-and it will hardly do
so-it would show net income of
nearly $70,000.000.
That, however, isn't expected; but
there is every expectation that earn
ings will not be less than $50,000,00O
To earn a net income equalling 6
per cent annually on the value OF
the properties, the roads should show
in June a total of $99,000,000 on the
right side of the ledger. They won't
do it, but they will show more than
half that amount-and that showing
is made in the face of lessened re-
ceipts and before a single wage cut
went into effect. The wage reduc-
tions didn't become operative till
July 1, nor did the abrogation of the
national agreements, which will re-
suit in another big saving to the
roads and a consequent increase in
net income.
Expenses Cut
How did the roads make such a
good showing for June? By the old
The tally for the 1872 roads shows
that they reduced their expenses in
June more than 20 per cent, as COM
pared with June, 1920. Part Of this
was due to the lessened cost Of sup
plies; part to decreases in the work
ing forces-one fifth Of the men have
been discharged within a year-and
part to the fact that during June
the roads kept their maintenance of
way and equipment expenses down
to a bare minimum.
June, July, August and September
are the big months of the year for
spending money in maintenance of
work is easier. This year, however,
the total spent in that manner is
pitifully small when measured by
the standard of other years.
Coming to July we find that wage
cuts and the abrogation of national
agreements both are effective on the
first day Of the month. That saving
in expenses has been estimated at
more than $30,O00,000 a month.
If, therefore, the roads did as well
in July as they did in June in the
matter Of revenues received for haul
ing freight and passengers-and the
indications are they did-they did
good deal better in the matter of
net income, at least $3O,000,000 bet
ter. And that would bring the car
riers, taking them as whole, close
up to the 6 per cent a year mark
at which they have aimed for years.
Stimulates Industry
Such a condition 2ugurs for re-
vival almost immediate in many
lines of industry. If the railroads
are healthy financially, the rest OF
the country will soon become so. NO
boom is expected; but business gen.
orally, forecast by the infallible baro-
meter of the railroads, should show
noticeable pick UP within the next
thirty to sixty days.
Another thing that is going to help
business nightly, in the opinion OF
economists here, is the $4O0,00O,0oo
or more which the government soon
will control. The settlement will not
1ndiv1duaI ROAD viii settle Individual
ly with the railroad administration.
Already there is available approx
mately S100,000,000 for the settle
ment Of such claims. 1t is true, also,
that some Of the claims are about
to be settled. Several roads are on
the verge Of winding up their af-
fairs with the government, taking
their rent and using the money.
Among the number are two or three
big roads whose claims are big
claims. Announcement of their set
tlement will be made. it is believed
within a week.
But the bulk of the $500, 100000 to
go from the government to the roads
will hardly be available in less than
thirty days. When it is, the money
thus received is expected to act as
Stimulant to industry.