Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-01-10
CARRIERS RETURNS
DECREASING IN 1921,
ARE RECUPERAT|NC
BY HARDEN COLFAX
(Leased Wire Service to The Journal.)
Copyright 1929

Copyright. 1929
WASHINGTON, Jan. 7.-Earnings
Of American railroads during 1921,
the first full year Of private opera
ton since 1917, total $60S,000, 900, or
at the rate Of 3.3 per cent on the
value Of the properties, taking them
as a whole. The figures are approx
| innate, as December returns are not
yet compiled, but are accurate to
within a few million dollars, one way
or the other.
This showing, which falls $780,
100000 short of what the interstate
commerce commission planned when
it raised rates seventeen months ago
so that the roads might earn ap-
proximately 6 per cent on their in
vestment, was accomplished only by
the dint of drastic retrenchment
which finds a parallel nowhere in
the previous history Of American
railroading. It is the smallest re-
turn to investors under private con-
troll, since 1908, or within thirteen
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 % per
cent from the 1920 volume and pas
senger traffic declined 10 per cent.
In all the years of American rail-
reading there has not been so sharp
decline. The last few months OF
the year, fortunately, showed a
steady trend toward better times-a
trend that is carrying the ROADS INTO
1922 with every indication of much
more prosperous year.
Expenses Cut Sharply.
During 1921 the gross receipts OF
the roads were $5,625,000, 900. This
is $500 ,OOO, 900 l.ss than they were IN
1920. On it's 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, II
cost the roads nearly $1,20O,0OO, 900
less to operate in 1921 than 1t did
in 1920.
Half of this huge economy was ef-
fected through reduction in what
the roads call transportation COSTS.
These are the cost items OF running
the freight and passenger trains,
n aintaining the offices and stations
and keeping the mac inery OF the
plant going. In 1920 the roads spent
S2,9O7 900 900 in transportation costs;
in 1921 they spent $4,000 100000. The
difference is $607, 0,000-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
entering into the situation.
For instance, there is the big item
of maintaining equipment in GOOD
shape. On this item alone the roads
spent nearly $1,600,000,000 in 1920.
In 1921 equipment was not kept up
to the standard set in 1920. The
roads spent $500, 900 less on that
item. They also spent $25O,O0O, oOO
less on keeping up their road beds
and maintaining the right of way.
The total economy effected in these
two items-and many persons ques-
ton the real economy, claiming the
cay of reckoning is coming-approX-
irnates $3.50, 900, or nearly the en-
tire amount of net operating income.
Labor FlUctuat1On
In effecting their policy Of re-
trenchment, the roads laid off 80
per cent of their working forces in
eight months. The record shows
that in August, 1920, there were
2,197,0OO employees on the roads. BY
December of that year the plumber
had dropped to 100000 and by
April to $4,000. That was the
low mark. Thereafter the employ
ment figures began to climb. In Oc-
tober last more than 100000 more
men were on the rolls than in April.
The average earnings of the rail-
roads employees has been so much
subject of contention between the
roads and their employees that the
record on thai phase Of operation
is of timely interest.
In 1919, before the general and
sweeping increases in wages, the
average yearly wage of the man on
the railroad payroll was $1,4S6. The
following year saw generous upward
revisions of the wage scales which
carried the average to $1,82O for
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 wage dropped to $1,792 per
year. During the next three months
it dropped to $1,784.
Then came July and the wage de-
cisions. The drop was decisive-to
$1,573, or at the rate of about SIT
a month for every railroad employe.
In August, the last month for which
the figures have been compiled, the
average rose again, about $54, to ap'
proXimately $1,627.
The foregoing figures cover the
country's transportation system as
a unit. The earnings, however, were
unevenly distributed, the stronger
roads earning a higher rate than
others. Of the POI carriers whose
earnings are included in these totals.
more than forty, or not far from one
fourth of the entire number, ope-
rated in 1921 at an actual deficit.
These roads, for the most part, how
ever, are improving their position.
RootIeooers Fiqht