New Britain herald., 1926-02-20
NEW HAVEN's EARNINGS
 AND ITS DEBTS

Hartford railroad is believed hS
 many 10 bo coming back" in the
 sense that 1t is earning llttlo
 money whereas several years ago
 IL was parading deficits before the
 eyes of it's friends in New England.
 Its surplus for 1925 has been stated
 as being s141s.252. which is
 equivalent 10 $4,72 q share on it's
 common stock, In 1o24 the railroad
 earned only sioo q share on this
 stock, while in 1923 and 1929 II
 had deficits.
 But the earnings Of tho railroad l during 1925 were not greatly in eX-
 cess of the interest duo from the
 railroad to inc government. The
 railroad owes the government ap~
 pfoXimately S6 millions Of dollars.
 on which six DOT cent interest q
 year is due. or s5.100,00o. This sum
 is more than twu-thirls Of its en- fire earned surplus during 1925. The New Ravens increased earnings have been due not only to an increase in gross revenue, but also to reduction In operating cX- penscs, The cost Of operation has been cut 10 the bone, and though l the physical equipment has been somewhat improved. the state of it's freight cars remains below that for Class I railroads.
 Confidence in the New Haven's future is being reflected in the price of it's stock, which is in the forties But 1t Is stated by nnan- ciers that this price is slightly un- der ten times It's annual earnings per share, and that many Of the stronger railroads paying dividends are enjoying no higher rate for their stock. The inference there fore is that the price Of New Ha- ven stock Is higher than the cir cumstances justify. In view of the heavy capitalization of the road, the large debt incurred by the pur- chase of trolley companies, and a large debt due the government, the current book deficit is computed at around s40,00o,o0o. The railroad, therefore, is not likely 10 pay divi- dends on it's common in the near future.
 During the war and postwar pc riod the New Haven carried nearly as much freight as it did last year, yet lost money. The reasons for the difference i'll earnings are lower operating expenses and tho present higher rates. The railroad is doing better today than 1t did during the days of stock watering, Wall street manipulation and legislative hand picking because its management Is attempting to run a railroad not | an excuse for stock jobbing.
 The New Haven. in common with other lines that borrowed from the governments revolving fund" dur ing the war, is paying per cent l interest. Tho gov ernment itself pays ! 4.l4 per cent on the entire national | debt Manifestly, the government is 1 earning a large sum on the money | loaned the railroads. The govern mcnt now can get money at l-2 [ per cent. That the loans to the railroads should be refunded at lower rate Of interest seems at least a fair proposal The New Ila- ven still owes millions to the gov ornment and must pay per cent interest. At the same time it is failing 10 earn the return on its property regarded as fair ny the i Interstate Commerce Commission. Senator Gooding and Representa- tive Merritt have introduced bills in Congress 10 refund the railroad debts over period not exceeding 40 years at q minimum interest of f per cent.
 Most of our European debtors have been allowed to refund their war debts; our railroads are iusti- fled in claiming similar concessions. Merely because they are American and supposed 10 be prosperous should not be held against them, The public is paying high trans puTiation Tdl"S, "Ilue cblSlIrfdblG sums cxact"d from the public is due the government In the form of this high interest rate. We need lower rates, and a good way to get them is for the government 10 eliminate this species Of indirect war tax upon transportation.
 The biggest telephone building in the world is heinz occupied in New York City. And the company wants 10 raise the rates.