New-York tribune., 1921-05-24

method of handling materials and
supplies and TO lower expenditures.
( Mr.. Elliott filed q table showing the
financial condition OF the Northern
Pacific in 1919 and 1920, compared with
the test period from June, 1914, to
jane. 1917, inclusive, which WAS used
as the basis fer compensating the
railroads while under Federal control
operating revenues during the test
period, according 10 this table. to-
tailed $74,S60,000 year. on the aver
age, compared wite $10i, ,d74,o00 in
1919 and $ll1.S72,0bo in 1920 Ex-
penses for the three periods increased
from sal 1.599,o0o in the test period to
$7s,672.Oo0 In 1919 and Si00,9aS 900
IN 1920. Net operating income de
creased from $30196,000 in the test
period TO $16,l0A,I13 in 1919 aud
$e,f37 900 in 1920, while ratio of op-
Grating expenses to revenues increased
from 66.56 in the test period to 90,26
last year.
Had De6cit in 1920
While the Northern Pacific for that
period paid all expenses, taxes, interest
and per cent dividend and had
50, ,S5d,944 left, The table showed ex-
penses increased during the succeeding
years so that in 1890. with an increase
of more than S37, 100000 in gross rev
enue, 1t failed TO meet expenses, inter
est, taxes and dividend charges by
5,741,26o.
Mr.. Elliott presented another table
to show that the Northern Pacific In
1920 operated with greater efficiency
than in 1919 or in the test period
The amount of tonnage" said Mr.
Elliott, "over each mile of track OF
the Northern Pacific, the loadings of
~
per day of cars were better in 1920
than III 1919 or than in the test period
clearly showing that if wages. working
rules and prices of coal and other ma
terlals necessary to carry on the bust
ness had been on the same basis as in
the test period the costs would have
been lower in 1920 than in the test
period"
President A. II. Smith of the New
York Central, in the closing part of his
testimony, in response to questions
from Senator's. denied charges of eX-
travagant expenditures by the roads in
the guarantee period of 1920. He said
the roads were not in ft condition to
handle the traffic of the country when
the government turned them back to
the companies, and the railroad man
agements had to make all possible ex-
penditures to bring them up TO the re-
quirements.
Doubts Compulsory Labor
Mr.. Smith said he did not believe
labor on railroads could be made com
pulsory. This was i'll answer to Senator
Stanley, of Kentucky. Mr.. Smith said
the best way to insure contented labor
was to make it to mans interest to
work for the railroads.
Fair dealing and fair treatment are
the best solutions of the labor prob
lem" said Mr.. Smith. "a willing
worker is the best. And this applies
also to the Investor; he is not willing
or eontented. Contcnted workers
stockholders and investors are the
greatest asset a railroad can have, and
without this we cannot succeed"
Mr. Smith said some rates we're too
high, but the difficulty about lowering
them was that it would take too long
to get them back if found too low He
said he lived on a farm himself and
was som etimes appalled, at the freight
costs which, as a farmer, he had to pay
For replacements and improvements
alone, Mr.. Smith said, the New York
Central needed SIS 100000 to $50. .00O, 900
year If the road was to serve its ter
ritory properly. One of the great re-
sponsibiities of railroad managements,
he pointed out, was to look ahead and
provide facilities that would be needed
in the future. They could not do this
now because they did not know where
the money was TO come from.
Comptroller w. c.. Wishart, of the
New York Central, explained to the
committee how wage awards chargeable
to the Federal control period were ac-
counted for. He said they were charged
to the operating expenses account at the
time payment was made, but that
eventually the company was reimbursed
by the railway administration.