White Bluffs spokesman. [volume] (White Bluffs, Wash.) 1907-1938, 1926-04-09
HOW MUCH ARE THE
RAILWAYS EARNING /?

one of unusual interest at present
because of the western rate advance
case and the fact that the net op.
Grating income being earned by the
railways as a whole is showing sub.
stantial increases. The Railway Age
publishes in recent issue an edi
torial entitled "How Much Are the
Railways Earning?" in which 1t
says:
"The total amount of net operating
income earned in the first eight
months Of this year was larger than
the amount earned in the correspond.
ing months of any previous year. The
only real measure of the prosperity
Of an industry, however, is the per
centage earned on its property in
vestment, or it's valuation. There
was no valuation before the war and
therefore to get a satisfactory meas
ure of the present prosperity of the
roads it is necessary to compare the
return now being earned on their
property investment with the return
earned by them on 1t prior to the war
"In 1916 the net operating income
Of the railways was the largest in
history, and yielded return of SO
per cent on the property investment.
Since that year, however, the invest
ment in the Glass / roads has in
creased from 1881, 100000 to about
$23, 535,0 100000, or almost $6,0O0,O00,-
900. In consequence Of this increase
in investment the return earned in
the first eight months of this year
was at the annual rate of only 465
per cent.
"The investment in railroad prop
erty in the 71@ years ending with
1917 and Immediately preceding gov
eminent operation averaged about
$17,761, 100000, while in the years since
1920 it has averaged approximately
SPLITS, 100000, an increase of over
81, 4O0,O00,00O. The average net op-
Grating income earned annually in
the IN years before government op-
Grafton was $3.50, 7sO,5OO and yielded
an average annual return on prop
erty investment of 49, per cent. The
return earned in these years proved
so inadequate that the annual in
vestment made in improvements and
new facilities declined from more
than $1,0o0,OOO,OO0 in 1911 to less
than $25O,OOO,0OO in 1916.
"The average annual rate at which
net operating income has been earned
slice January 1, 1921, and down to and
including August, 1925, has been
$S74,367000, which has yielded an
annual average return of 3.94 per
cent on property investment.
In other words, the percentage of
return earned has averaged much
less than it did before the adoption
of government operation. Further
more, the return earned in the eight
months of this year, at the annual
rate of 4.65 per cent, is not only
much less than in 1916, but less than
the average earned in the entire III
years Immediately preceding the adop-
tion of government control.
The facts given show that al
though the country is now more pros
porous than at any time since the
war the pre-war earning capacity of
the railways as whole has not been
restored.
las is well understood it is the rail-
ways Of the western group that have
fallen the farthest behind in earn
ings. The first year for which de-
tailed statistics of net operating in
come by months are available is
1917. In the first eight months Of
that year the net operating income
earned by the western roads was al
most $294,O00,000, while in the first
eight months of 1925 it was less than
5000, 100000, a decline of about $780,
100000, the return earned by these
roads thus far this year being at the
annual rate of 1862 per cent"