The Washington herald., 1921-03-05
RAILWAY TAX OVER
FOUR TIMES TOTAL
OPERATING INCOME
According to I. C. C. OPP
Grating Revenues Equal
: $6,225, ,4O2, ,762s
.ARGEST IN HISTORY
Expenses of Operation Are
$5,S26,197,474; Millions in
Excess of Previous Year.

Taxes paid by the railroads in
1890. or those for which they be-
came liable because some of the
2 roads are behind in their tax bills
as well as other bills, amounted TO
four and one-half times as much
as the net operating income which
the roads earned for their owners"
says the Railway Age in its cur
rent issue
Total operating revenues for the
year, according to the Interstate
Commerce Commission statistics
made public this week. were $685.
.762, the largest in the history
of the railroads. and S1,041,0OO.0OO
greater than for 1919. Operating
expenses, however, consumed $5,-
s2s,Is7,474 of this. or s1,406. 900, 900
more than in 1919; and taxes $751;
3s0,s2o, or $4,000. 900 more than in
1s1s. Taxes include s33,34s.s3S Of
war taxes for the period from March
10 December after the roads were
weturned by the government- After
1deducting for uncollectable reve-
pues and equipment and joint facil-
fly rents, this leaves a net operat-
ing income or profit from railway
operations of only s62-264,421- This
compared with an average Of over
$500. .oeo. 900 for the three years pre-
ceding the war.
One-third Per cent Return.
1T represents a return of about
Ia of 1 per cent on the valuation
of s1s,sO0, 100000, which the Inter-
state Commerce Commission used
for the purposes of the rate case.
1t Is less than the roads should
q. 10 ha
per cent which the transportation
act prescribes as the measure of a
fair return on the investment. 1t
Is less than one-fourth of the taxes
charged by local. State and Federal
governments for the privilege of
owning property and doing business
and the protection of the laws. and
IL represents a profit of almost ex-
actly 1 per cent on the gross busi-
ness done during the year when the
railroads handled more freight and
passengers than ever before in their
history.
striking Illustration.
These figures .strikingly Illus
urrate the importance to the rail-
roads of the relief to be afforded
by the winslow bill, which author
ICES partial payments pending fifnff
settlement Of the guaranty provid-
ed for by the transportation act for
the six months following the ter
mination of Federal control. which
has Just been signed by the Presi-
dent. Without the guaranty most
of the railroads would have been
bankrupt several months ago. par
ticulsrly as the entire net operating
income of s62. 100000 was earned by
only about half of the Glass I rail-
roads. the other half having deficits
for the year.
Huge Advance on Applications.
with the promise of the guar
anty and with the assistance of
about s262, ,000,0 900 actually advanced
on applications filed prior to Sep
tember 1, the roads have struggled
along for a year. but IL took a new
law passed a year after the passage
of the transportation act to make
any OF the balance available. and
the relief could not have been de-
layed much longer without disas-
trous results. The total guaranty
for the six months period is esti-
mated at about s6Oo.000, 900. of
which about s2O0, 100000 has al
ready been paid out for back wages
Euhuer the NNdiirOdo LdDor boaru
award of July 20. In addition the
railroads received about $3.50. ZOO, 900
for their guaranty for January and
February, 1920. when they were
still under Federal control.
while the taxpayers are grum-
bling about paying the guaranty.
they might pause to remember that
the railroads themselves have to
pay nearly half Of it for their
taxes"