Omaha daily bee., 1921-07-28
Railroads In Debt
Half Billion for
Supplies Bought
Government Aid Necessary to
Remove Embarrassments
And Stimulate Industry,
Opinion of Financiers.
By HOLLAND.

BY HOLLAND.
Railway managers who nave OF.
fees in this city are reported to feel
somewhat encouraged, believing that
in a few weeks certain embarrass-
ments which have borne heavily
upon the railroads will be removed.
Whether the public will share this
telling remains to be seen. Railway
bonds of exceptional credit are now
selling at lower prices than at any
time since 1884.
Thirty years ago Great Northern
stock commanded market price as
small as that which was quoted for
il in June of this year. But in the
meantime Great Northern stock
stood prominent among railroad
securities on account of its high
market price. The Southern Pacific
is now in as strong apo sition probably
as it has ever been and yet its
securities have been selling at
lower price than at any time since
1907. The Northern Pacific turned
to surplus which it had ac-
cumulated so that it might be en-
abled to meet successfully any emer-
gency and drew from it enough
money to pay its quarterly dividend.
Yet that dividend payment did not
cause appreciation in Northern
Pacific stock. In June it sold at the
lowest price since 1900.
Railway Managers Announced.
Railway managers, however. are en-
courased in spite OF the almost unprece-
dentedly low market quotations for their
securities because, in the first place. they
may find themselves In position to pay the
overdue bills which they owe The public
does not know to what an extent American
industries ana business have been com.
peiled 10 carry over long periods deferred
american america raiiroads. conspicuous in the
past for prompt payment OF bills, have
been compelled to procrastinate their pay
ments. a
In the aggregate these deferred pay
rnents amount to very large sum. The
railroads are estimated to owe at least
$500. 100000 on account of purchases or
rails, imperatively needed equipment, coal
and various supplies The result has
been that the corporations which have
sold these supplies to the railroads and
have not received their pay have been
ment were to pay what it owes to the
railroads then these embarrassments would
he ended One railroad manager re-
,orts that one of the strong railroad
ompanles is behind on bills payable by
= much as S65, 900, 900. But the govern
Ient owes this company about sloo,.
10000. Therefore, 4 the goysrnmen, a,,,t
be able Immediately to pay its bills and
have some $30 000,0 600 left.
President Deeply Concerned.
Some of the New York bankers who
were the guests OF President Harding at
the White House recently, and some or
the western bankers who also met the
president . few days later were I'M
pressed by the presidents deep concern
ever the railroad situation. They are
satisfied that he will do all that is In
his power to give relief to the railroads.
II he does exercise In full his discretion
AIRY power the railroads will be Immediate
iy benifited and s. that benefit ,,s,Dasa Woesd
Some are of the opinion that It will
be the first step towards restoration of
when prosperity does begin 1t will be
followed BY industrial and commercial
activities unprecedented. That was the
fact after the revival began in the early
years Of President McKinley's administra-
tion and was characteristic of the first
year Of President Taft's administration,
covory % from from tho u panic Of 1907. 49,
Railway managers believe that In
creased net earnings supplementing
prompt and liberal settlement OF tHe az
counts between the railroad admnistra-
tion and the carriers will be followed by
buying upon large scale. Last winter
when the Railway Business association
commonly said that the many corpora
tons throughout the United States, whose
chtot business is the manufacturing ana
sale OF equipment. machinery and other
commodities of which the railroads stand
. in naed, were almost stagnated because
OF the inability of the railroad to buy
pau.cn are again in position to make pur-
chesss then these industries will recover
their business and probably will be
pushed to their capacity. That will stimu-
late general business
What the Railroads Need.
The public does not realize how much
Is necessary to be done for Improvement In
the rolling stock, other equipment, road
bed and terminal facilities, IL the rail
roads are to be in condition to handle
the traffic which will be offered.
While tho bankers of the east and Of
the middle west are preparing to meet
tho demands which will be made for
the funds with which to move the crops
from the arvest fields to the markets,
railway managers. on the other hand, are
also preparing for this heavy traffic.
They are of the opinion that the crops
Will approach, II not equal. the best rec
ord. Some Of them are persuaded that
about bo,000,o0o bushels OF wheat will
harvest Of corn some OF them saying that
dorm appears TO be now the most flourish
ing in its promise. at least, OF all the
crops. They do not know what to say
about the outlook for the cotton harvest.
But the cmnion opinion seems to be that
cotton will harvest smaller crop than
at any time IN the past 20 years. There
will be. therefore, heavy demand upon
the railroads for transportation Of the
crops from the harvest fields to the mar
ket. II the government now aids the rail-
ro>ds through funding operations and
tn ough the payment Of balances still
due then the railroads will more easily
end economically handle the crops Some
OF the ahIest authorities are Of the opinion
that II the government acts promptly a
very ereat stimulus to the return Of
business prosperity will have been fur
nished.
-
S.s~ Ss.'x frrtt.sn,
New York, July with the exception
ot r. $3.50 i.Grs- aronud the opening.
due :. trA1v huvins, the cotton market
waa s.Gi,. s7riv pressure from liquda-
tioa t,>.,s.acei by bearish crop reports.
A Texas firm announced q condition OF
Sc corrpsrsd with 67.s last month. thus
indicating less than the normal deteriora-
ion for the period. while a local trade
paper reported quite fayorably on condi-
tions in Mississippi. Alabama and Louis