The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-07-17
RAILROADS ARE
EARNING BIC
RETURNS
Rukeyser Says They Are In
Most Prosperous Period
of a Decade.
By MERRYLE STANLEY
RUKEYSER.
Copyright. 1923 by Star Company. Inc.
Cosmopolitan Service.)

Copyright. 1928 by Star Company. Inc.)
Cosmopolitan Service.)
NEW YORK, July 1.-THE rail
roads of the United States are in
the midst of the most roseate Pc
Rod of prosperity in a decade.
1t is less significant that traffic
thus far this year is the heaviest
on record than that net earnings
are by far the largest since the
war. In a growing country like
the United States, a steady growth
in the volume of business is nor
NAL. Transportation experts place
the rate of average growth at about
s per cent a year.
But the mass of material and
passengers moved does not neces-
sarily fix profits for the carriers.
In expenditures through the Rail-
road Labor Board and in income
and borrowing through the Inter
state Commerce Commission, the
managers of the railroads are re-
stricted by the will of government
tai bodies. The extraordinarily IA
vorable character from the stand
point of the. owners of the rOado)
Of the transportation act of 1920
is just now becoming apparent in
the income accounts of the roads.
$S9,OOO,OOO Earned. in May.
In May, 1923, the last month for
Which the statistics of accomplish
ments are available, the roads
earned $50, 1900, which is at the
annual rate of 6.33 per cent on
their property value, compared with
$62, O69,000, in May, 1922, which
was. at the rate of 4.46 per cent.
The poorest results have been at
tanned in the West, where COM
plant over the high level of exist
ing rates have been most clamor-
Gus. In the agricultural regions,
where freight charges have been
the greatest burden, the roads have
been earning markedly less than
In the industrial East or in the
South. In May, which did not yield
quite as large return to the
roads as April, the peak month
this year, the Eastern roads earned
at the annual rate of 7.72 per cent
on the tentative value of their
properties; the Southern, 6.72 per
cent, and the Western, 4.43 ger
cent.
OF course, the roads which de-
pend largely on the movement of
crops from the granger States
habitually do better in the second
half of the year than in the first.
Az Per Cent Fair Return.
According to the present ruling
of the Interstate Commerce Com.
mission, AZ per cent on property
value is a fair return for the
roads, and there is every indica-
ton that the roads, as a whole,
will earn that much this year for
the first time since the transpor-
tation act went into effect. Some
of the stronger roads will earn
more, and under the terms of the
act will have to divide one half
of the excess over per cent with
the Government, which Will thus
create a special fund for financing
the weaker roads. The possibility
of lower rates already begins to
loom up, though not as an imme-
date development.
For the first five months of the
year the carriers have been earn
ing at the rate of $50 per cent,
compared with 4.45 per cent last
year.
There may be a deviation from
the usual seasonal fluctuations
this year because, of the extraordi-
nary rush of freight last spring
resulting from the unprecedented
productivity of American Industries.
In the midst Of the present pros
perity, of The carriers, there has
been comparatively httle enthu
siastic bidding for railroad stocks
at the exchange. The average
price of railroad stocks is some
10 points lower than in March and
some 20 points lower than last
September the summit reached be-
fore the market began to discount
the deIeterious effects of the shop
mems and coal miners strikes on
earnings.
Political fears have checked spec
ulatiVe energy at the posts where
railroad stocks are bought.