Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1921-03-31
MAINE SITUATION
Continued from Page One)

ing proper allowances for the in
creased business and more favorable
operating conditions of the summer
months. it is estimated that the def
cit for the year will be approximately
81, zoo, 000 90, including ss00.0Oo.00 for
much needed betterments. Should the
volume of traffic be reduced in ac-
cordance with many present indica-
lions, the deficit would be correspond
ingly greater. 1t is believed that
about 81. 800, 10000 can be saved in the
purchase of coal and other operating
economies, which would offset in
part the deficit indicated above. =
The most pressing need of the
Maine Central is ready cash. Its
present cash balance is about $780,
10000. which is the minimum amount
necessary for working capital to in
sure the prompt payment of pay
rolls and other similar charges. 1t
owes about $1,000, 100000 on overdue
accounts, leaving an excess of ac-
counts payable over its cash re-
sources of about $700.008.00. There
. appears to be due the company from
the United States Government the
sum Of $1,o66, 10000 as the balance
of it's standard return under the act
of 1917 establishing federal control,
not more than one-third of which can
be secured at present. This entire
sum is Immediately needed for the
payment of deferred VIC, cheers. A
further sum of $953,0e0 90 is claimed
by the railroad for damage to its
property and other adjustments arts
ing from government operation, but
no part of this amount can be secured
until after protracted negotiation or
litigation and must be regarded as an
asset of very doubtful value. Loans
from the United States Government
can only be obtained for limited
amounts and the company has very
little in free securities which would
be accepted by the government as
collateral. The credit position of the
company has been SO greatly impair
ed by the discontinuance of dividends
and it's operating deficits that in the
present condition of the investment
and money markets loans from banks
or bankers cannot be easily obtained.
Inc surplus VI plciit elild ApSo oStouht
shown on the balance sheet of the
company represents additions made
to the property and equipment OF
the company from surplus earnings
in the past and is not now available
for operating losses or other charges.
The situation of the Boston &
Maine is similar to that of the Maine
Central, but, being a larger system,
its deficit is greater. being now at the
rate of 81, 600. 10000 a month.
1t is apparent that these conditions
cannot continue indefinitely.
Sixty-one per cent. of the expendi-
lures Of the Maine Central and IS
per cent in the case of the Boston &:
Maine is for labor. The labor cost of
the Maine Central has risen from
about $1,000, 10000 in 1916 to s16,-
oo0, 900 90 in 1921, the difference be-
ing more than the additional revenue
obtained during the same period from
increased rates. The railroads con-
troll only the salaries of their general
officers. which in the case Of the
Maine Central have been substantial
~ reduced. effective April list The
wages Of all other employees are es-
tablished by the Labor Board, which
has its headquarters in Chicago. and
cannot be changed without its ap-
prevail except by consent Of the em-
ployees concerned. .ssss.
There are four parties or interests