The Birmingham age-herald., 1922-01-08
AMERICAN CARRIERS
 EARN S6O8,OOO,OOO DURING YEAR 1921.
Amount Falls Short of ESti- mates of the Interstate Commerce Commission
 by Half Billion Dollars
By HARDEN CoLFAx
Special Correspondent of The AEe-Hera Copyright, 1921. by The Age-Herald.)


 Washington, January 7.-Earn- ings of American railroads during 1921, the first full year of private operation since, 1917, total $60S,- 000,000, or at the rate of 3.3 per cent on the value of the properties, talk ing them as~-a whole. The figures are Japproximated, as December re- turns are not yet compiled, but are accurate to within few million dol lars. one way or the other.
 This showing, which falls half billion dollars short of what the Interstate commerce commission planned when 1t raised rates IT months ago, so that the roads might earn approximately per cent on their investment, was accomplished only by the dint of drastic retrench- ment which finds A parallel nowhere in the previous history of American railroading It is the smallest re- turn to investors, under private con- troi, since 1908, or within 13 years.
 Executives of the carriers believe the showing in 1922 will be much better, although the winter months probably will be comparatively lean.
 The railroad history of 1921, in the light of fairly complete figures for the entire year. discloses that freight traffic fell off nearly 22 per cent from the 1920 volume, and passenger traffic declined 19 per cent. In all the years Of American railroading there has not been so sharp de- cline. The last few months of the year, fortunately showed steady trend toward better times-a trend that is carrying the roads into 1922 with every indication of much more prosperous year.
 During 1921 the gross receipts of the roads were S5,625, 100000. This Is $500. .0000 less than they were in 1920. On its face, this showing is disheartening. but coming to the next Item on the annual statement we find that expenses of operation showed a decrease so much greater as to be startling. Thanks to cut ting expenses down to the quick, 1t cost the roads nearly s1,200,00O,0 900 less to operate in 1921 than it did in 1920.
 Half of this huge economy was effected through a reduction in what the roads call transportation costs. These are the cost items of running the freight and passenger trains maintaining the offices and stations and keeping the machinery Of the
 
 s2.907 .0o0, 900 in transportation costs; in 1921 they spent S2,SO0, 100000. The difference Is $607,0O0, ,000-a sum which equals the net earnings for the year. It might be said, super ficially, that the roads were thus able to make their 3.3 per cent re- turn wholly because of the sharp cut in transportation costs, but the record shows many other factors en- tering into the situation.
 For instance, there is the DIE Item of maintaining equipment in gooo shane On this item alone the roads snent nearly S1. 500, 900 900 in 1920. In 1o21 equipment was not kept up to the standard set in 1920. The roads snent $500 GOO, 900 less on that item. | They also spent $250,000,o00 less on keeping up their roadbcds and main- taining the right of way. The total economy effected in these two items, and many persons question the reai i economy, claiming the day 'of reck oning is coming-approxim $5oo'- :
 GOO, 900, or nearly the entire amount ! of net operating income.
 | In effecting their policy of re- | trenchment the roads laid off 30 per cent of their working forces in eight months. The record shows that in | August. 1920. there were 2,l97,O00 | employes on the rolls. By December of that year the number had dropped ! to 1876, 900. and by April to 1,142,0O0. 1 That was the low mark. Thereafter the employment figures began ,o climb. In October last more thar 200, ,Oo0 more men were on the rolls
 than in April.
 The average earnings of the rail
 road employees has been so much a subject of contention between the roads and their employees that the record on that phase of operation Is of timely interest. Tn 1921, before the general and | sw eeping increase in wages, the av- craze yearly wage of the man on the railroad payroll was $1,4S6. The fol- lowing year saw generous upward re- visions of the wage scales which car | ried the average to $l.S2O. Tor every man in the railroad service. In the first three months of 1921, due to part time work and other effects of | the economic situation. the average was dropped to s1,792 per year. Dur | ing the next three months 1t dropped to $1.7s4.
 Then came July and the wage de- | cisions. The drop was decisIve-to sl573. or at the rate of about s17 :. month for every railroad emp,oye.
 In August the last month for
 which the figures have been com
 piled, the average rose again about S54 to approximately S1,627.
 The foregoing figures cover the country's transportation system as a
 unit. The earnings, however. were unevenly distributed, the stronger
 roads earning higher rate than ! others. Of the z01 carriers whose 1 earnings are included in the totals,
 more than 40, or not far from one fourth of the entire number. oper- 1 ated in 1921 at an actual deficit. These roads. for the most part. how
 ever, are improving their position.