The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-03-31
President Storey of Santa Fe
Tells of Railroad Conditions.
Only Two Things VIII Help
Lines Now, He Says
RATE CUTS ARE DANGEROUS
Need Increase in Business and
Reduction in Costs.
Addresses Conference of Rotary
Clubs at MuskOgee, Okla

Muskogee. Okla, March 31.-The
railroads of the country today are do
ing business at a loss and looking for
two things to help them out-an in
screase in volume and a reduction OF
Ecosts. according to w. b. Storey,
president OF the AtchisOn, Topeka -
santa Fe Railway company. who ad-
dressed the conference OF the Inter
national Association OF Rotary clubs
morning. his subject being. The Re
lation OF the Railroads TO the Return
OF Normal Conditions
ANY further rate reductions with
aout wage reductions are dangerous
and the sooner the railroads are put
on a paying basis the better for you,
the better for US. and the better for
sthe country Storey declared IF
the roads cannot be made productive,
-rhen follows bankruptcy and eventu-
ally government ownership with All Us
attendant evils If they are 10 sue
coed. they must not be hampered oy
Regulation 10 the point where they
cannot function properly
Need Many Improvements
A billion and a half dollars ought
to be spent annually on the railroads
for engagements and extensions alone
10 bring them up-to-date, as during
federal control 1.-THE increase in plant,
taking the railroads as a whole MS
vast sum stated would have nothing
10 do with the ordinary expenditures
FOR maintenance. but would be USED
only for expansions as demanded bS
the growth of the country storey
based his estimate OF the needs OF al
the railroads Of the country on the
.expenditures which he regards as
needed for santa Fe expansions WnlSh
- rlaced at sixty million dollars
near for three years While that y
the annual need Of the Santa Fe for
scypansions the actual expenditure
asvill not be so much They Will ags[e
gate fortyTthree millions Tor 1s-z' iOi
Instance
! storey admitted thatthere is feel
ing thruout the country that the
railroads are not doing their snare
toward bringing about a return to nor
mai conditions. with a resulting de-
mand for lower rates ne quoseu
from Secretary Hoover statement De-
fore the Interstate Commerce com
mission 10 show that the "transporta-
ton facilities are below the needs or
our country and unless we nave
nuick resumption of construction the
whole community, agricultural, com
mercial and industrial. will be gasplng
from a strangulation caused by insult
sficient transportation the moment that
business activities resume
Return To Normally.
= The railroads. Storey insisted, have
done everything possible to help bring
about a return to normalcy, put are
not in shape to do as much IN tnat
direction as other industries for the
reason that they were not allowed
to make any war profits Whhe lhe
world conflict was in progress me
government, he explained, paid IN
rentals for the use OF the raIlroaos
only the average earnings 1or the
three years preceding
Practically every other industry IN
The country made money during Lnal ]
Derfod he said. and the money so 1
n N
that have come in the liquidation era;
The railroads. therefore, he pointed
OUT. are greatly handicapped IN TINS
respect. altho they have maze lhnuIh-
erobIe rate adjustments downward, by |
order Of commissions, or voluntarily j
In 1921, he said. the railroads OF the
f-ountrv as a whole came out only
little over cost of production-apoul
Z nor cent and they actually lack $50
million dollars of having enough TO
nav interest on their borrowings In
loss n change comes. there can be no
Yorrnalcv for the railroads, he argued
THO restoration of railroad credit,
"impaired before the war by the
strangGlation regulation IS necessary 4
IL insure railroad development, storey 4
told the conference The railroad 4
S,du4tr,- has no reservoir of money!
from which it can draw finances
whenever directors decide TO butd
more Ines he said. 1t must raise Il
money BY getting people to invest 4
charges goes to pay interest or divi- y
dends but new money must be raised H
for extensions. and this money comesu
from peopFe who either buy stock or, II
not willing to take as much chance as
this implies, buy bonds VINO buys
these stocks OF bonds?
The people of oklahoma do not, 4
the people of Kansas do not; the peo-
ple of Missouri do not. We must goL
To places where people are willing tot
invest their money in such securities
and IL we raise money, must be able n
to paw returns on the money, eitherE
in interest or dividends. The theory /
in much of this western country hasH
been to induce the railroad to buidN
BY promise of bonus, and then, as
soon as built. to tax the railroad TOT
pay the bonus y
Accomplished Great Work.
Storey said he did not criticise theli
taking over of the railroads by the
government as a war measure Ting
government accomplished a great |
work" he said, but that does not say
that the roads themselves could not
have accomplished as much if their
shacKles had been removed. In waF.
the question OF accomplishment takes
precedence over economy.
The problem presented was to get
the traffic moved. and If it was nef-
essary to send a locomotive 1880
miles for repairs, where ordinarily lit
would be repaired at home. it was
sent the 1000 miles. IL bad order
box car could be used for roukh
freight, such as brick, it was so USED 1
instead of being at once put in shape
for grain or flour, altho from an eco
nomical point of view it should have
been repaired at once. II it was nee
essary to give men working rules that
destroyed efficiency, TO avoid the de-
lay that would have come from
strikes. such course was justified by |
the demands of war" But, he de-
clared, IL the railroads had been per-
mitted TO coordinate their efforts. as
they tried to do. there would have