The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-03-04
RATE LOW
Railroads Realized Only S.S1
Per Cent i'm 1921.
of 6 Per Cent Was
Not Guaranteed.

The net operating income of rail-
roads in the United States, the sum
available for interest, dividends, rem
tails. and surplus Of the corporations
owning the properties, amounted for
the year 1921 TO S615,625,s19, ac-
cording to compilations made for and
issued this week by the Association
of Railway executives.
This was computed by the associa-
ton TO represent a return or S.Sl
Der cent on the tentative valuation
fixed upon all railroad properly oy
the interstate commerce commission,
and covered reports from all OF the
2O1 Class 1 railroads which operate
the greatest proportion of American
railway mileage
Earnings for December.
For December. 1921, the net oper-
ating income Of the roads. not con-
sfderfng returns from the Detroit, To-
Iedo & Irontor, was $51.510.478, esti-
mated to represent an average rate
of s.44 per cent on the aggregate
The total operating revenues for
1891 was given as $5,569.SSS,O0O, or
1915 per cent less than the total for
1920, and total operating expenses
We're S4,602. $4,000, decrease of
oil per cent.
Look TO New Rates Now.
This week saw the passing of that
section OF the transportation act
which fixed 6 per cent as the rate OF
return the railroads were entitled to
earn on their properties This clause
which was generally known as the
guarantee provision. is superseded by
other provisions which hereafter re-
retquire the interstate commerce COM
mission to make rates that will give
the railroads "a reasonable return.
The guarantee provision which has
lust gone out of existence was a reg
ular football. It has been kicked
around about as much as the league
OF iations was in the political cam
paign of 1920. and just what the in
terstate commerce commission is go
ing to do to give the railroads a rea-
sonable return in the future is being
awaited with much interest.
Food for Politicians.
The rate as a guarantee has been
the keynote for politicians and various
commission heads and bodies in lam
basting the railroads before the eyes
of the public and in hammering for
a reduction in freight and passenger
rates. OF course, they didn't exactly
say so but they always left the i'm
preston that the railroads had sure
thing of per cent because If they
didn't earn it the government stood
back of them ready to make up the
deficit
In railroad circles, this particular
section of the transportation act has
been regarded as the So
called guarantee inasmuch as it was
a theory and guaranteed them moth
ing. Instead of realizing per cent
on their investment the past year. the
railroads OF the United States, the
above report shows had a return of
only 3.31 per cent, or slightly more
than one-half of the "so-called guar
antee.' And the government isn't
making up the difference of 2.69 per
cent, either. it is pointed out
Attempted To Help Credit.
Railroad officials say that congress
in fixing the per cent rate attempted
to stabilize railroad credit and to ar
rive at some basis which would give
the roads an adequate return. 1t was
agreed that the roads were entitled to
a return of per cent and valuations
and rates were fixed accordingly but
the plans didn't just work out and the
so far as 1921 is concerned,
will have to be content with earnings
of AL per cent