The independent-reporter., 1923-04-26
Why DO Profits OF b. & A. Exceed
Those OF NJ: &. X. r.?

PORTLAND, April ~ tSpec1al1-At tne
annual meeting of the stockholders of
the Maine Central Railroad at Port
land, April 18th, 1923, Morris Nc
Donald, president of the Maine Cen
tral made a statement In reply to
question concerning revenues OF the
Maine Central and the Bangor and
Aroostook. This statement answers
a question that recurs frequently and
that concerns all of the people of
Maine and especially the stockhold-
ers of the Maine Central. 1t is as
follows;
Mr.. John A. Woodsum of China,
Maine, inquired why the operating
results of the Bangor G Aroostook
Railroad for the year 1922 appeared
SO much better than the operating re-
suits OF the Maine Central for the
same period
President Mcdonald stated in reply
that he was very glad to make the
explanation requested, because the
same question had arisen in the dis
cussions of the Board of Directors
and in consequence OF this he had
made some study or the subject and
had prepared some comparative data
for the information of the board.
"The more favorable financial show
ing of the Bangor & Aroostook Rail
road for the past year said Mr.,
Mcdonald, "is due to four principal
reasons:
First. The Maine Central Rail
road average rates for transportation
of freight are generally lower than
those of the Bangor & Aroostook Rail
road
Second. The freight traffic agree
ment now In effect between the Maine
Central Railroad and the Bangor &
Aroostook Railroad, entered into in
1913 when the Maine Central Rail
road was controlled by the New York,
New Haven & Hartford Railroad Com
pany interests, has the effect Of re-
ducing the average rate per mile on
the Maine Central Railroad.
Third. A large proportion of the
freight traffic interchanged between
the Maine Genital Railroad and the
Bangor & Aroostook r. r. is wesbound
making it necessary to move the
greater part of the freight cars for
this traffic eastbound empty, and on
which per diem charges must be paid
by the Company while in our posses
sion in both directions.
Fourth. The Maine Central Rail
road average rate per passenger per
mile is very near the standard for
most Glass / railroads, three and
six -tenths cents per mile. The rate
per passenger per mile of the Ban
DIT to nciI
erably in excess of this standard
rate"
Referring to the traffic statistics
of the two roads, Mr.. Mcdonald stat
ed that in 1922 the Bangor & Aroos-
took Railroad hauled 267, 7,482,345 tons
of freight one mile for which 1t col
lected a charge of 2.33Sc per ton per
mile, while the Maine Central haul
ed 857,667 ,341 tons one mile for which
it received only 1.652c per ton per
mile.
The Bangor & Aroostook carried
20, $780, ,555 passengers one mile at an
average charge of 4.361c a mile,
while the Maine Central carried 1885,
43O, FOG passengers one mile at an
average rate of 3.55Sc mile.
If the Maine Central rates had
been in effect on the Bangor & Aroos-
took Railroad in 1922 that Company
would have earned its operating ex-
penses and a part of its taxes but
would have had nothing left of its
income for payment of its fixed charg-
es and dividends. On the other hand,
If the Bangor & Aroostook rates had
been applied to the traffic over the
Maine Central lines, the income of
this Company for 1922 would have
been approximately $6000,000 after
payment of all charges and full div
idend on both the preferred and com
mon stock. and which sum would have
been available for additions and bet
terments to the property and for the
general improvement OF the service.
President Mcdonald stated further
that a thorough and comprehensive
study of the tariff schedules OF the
company and its traffic arrange
nents and problems had beer under
taken by the management, and was
now In progress. to determine what
changes and adjustments might be
made to secure the additional re-
venue which Is needed, without dis
turbance to the business interests of
the territory which II serves.