Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-03-01
JANUARY EARNINGS
OF RAILROADS SAG
Lowest Ratios of Profits
Since 1927 Revealed in
Carriers Reports.
BY CHARLES F. sPEARE.
.spateh to The star.

Special Dispatch to The Star.
NEW YORK, March 1.-THE COM
pleted list Of important railroad system
earnings in January show the lowest
ratios of gross earnings and net operat-
ing income for the month since 1927.
Not only was there a severe shrinkage
In the movement of traffic last month,
compared with the same period in 1929
but IN great many instances there
was drop from the level of 1928, when
some of the carriers were still expert
encing the effects of the mild business
reaction of the previous year.
The decrease in net operating income,
when the final figures are available, is
expected to be about 25 per cent in
comparison with a year ago. This is
not SO large as that of November but
runs TO about the same proportions as
the shrinkage in December. Altogether.
the last three months have witnessed
the most severe curtailmerit in railroad
operating revenues since 1927. Pre-
urinary estimates of February returns
promise only slight improvement over
the January figures.
Extent of Decrease.
The decrease i'll net operating income
was about four times greater than in
gross income. This was due not only to
hAAG NGNCAC OHCldAAIlS COUd2NlOnS winch
the roads had to face last month but
to their policy of continuing expenses
at relatively high point in order to
carry out the Government program of
assisting business.
In view of the high state of physical
condition attained by a ajority of the
carriers through liberal expenditures in
the last few years, they would have
been able to Offset a considerable part
OF gross decreases with ariv
OF maintenance expenses had the obli-
CATION to support the Government pro-
gram not been entered into last De-
cember.
Losses were common to practically
every section of the country Naturally
the decrease in activity in the iron.
steel and automobile districts in ths
East affected the revenues of the trunk
lines, which carry vast amounts of iron
and steel products and coal and take
trainloaos of automobiles in normal
times daily out of the Michigan pro-
ducing centers.
The Pennsylvania, Baltimore & Ohio.
and New York Central all showed sub
stantial losses in gross and net. The
effect OF withholding grain and the COL
lateral results of a reduced purchasing
power by communities owing 20 falling
prices Of wheat IS wildly indicated in
the poor statements ofaGreat Northern.
Northern Pacific, st. Paul and Chicago
& Northwestern, the same general effects
obtain in the Southwest where not only
wheat but cotton enters into the trafhc
situation and produced a series of I'M
favorable reports by the leading sys-
TENS in that section.
See Better Business.
This was also indicated in the state
ments of the roads in the South whose
January gross and net in most cases
was lower than for the same month in
either 1929 or in 1928
1t has been difficult with such Door
earnings statements to attract much
investment support recently in the
shares Of railroad companies, most of
which have reacted from the high level
Of the year reached two weeks ago.
Railroad executives are confident that
they will later have the benefits of
traffic that has been held up tempo
rarily by either SLOW business conditions
or the situation in the congested grain
markets. They give the month Of April
as the probable time when earnings will
again begin TO show favorable COMPARE
sions with 1929
tCopyrisht. 1897