Evening star., 1930-06-27
RAILROAD EARNINGS
SHOW SLIGHT GA|N
Improvement Over Firs
Quarter Reports Still Leaves
Total Below 1929.
Special Dispatch TO The star.

NEW YORK, June 27.-The first 4
railroads of the country to report thei
May earnings indicate a somewhat bet
ter result relative to q year ago thai
In the period between the end Of Jan
uary and April 80. Their net operatinl
income is of from 80 to 81 per cent
on the basis OF the preliminary esti
mates, which compare with 80 Pc
cent reduction in April. of 81 per cen
in March and 80 per cent in February.
This group Of roads includes the nnaiI
systems in every part of the countr,
and the average decrease in net op.
Grating income takes into account I
number of much higher than averagl
losses on ten or q dozen importan
roads.
Eastern Systems.
These decreases have been heaviest OF
the Eastern trunk line systems, on th
roads in the Northwest and on th
transcontinental lines. On the Atcht
son, May net operating income was n
per cent under that Of year ago. Fo
f1ve months to May 81, the Atchisoi
shows about one-third as much operat
ing income as in the first five month
of 1929, although It's gross earnings de
creased only 10 per cent.
This reflects policy that has beei
quite general among the carriers sine
the first of the year in going aheat
with maintenance work and other i'm
provementS as they have done wheI
business was normal. Some Of then
changed their methods in May an,
have thereby improved the relation be
tween their gross and net revenues
Others did not start their program d
curtailment until June. so that whel
| the figures for this month are publishej
they are expected to make an even bet
ter relative exhibit with last year thai
have those for May.
Among the largest May net decrease
so far indicated are those of the South
| ern Pacific. Great Northern, st. Paul
Union Pacific. Northern Pacific, Net
York Central. Pennsylvania, Erh
Southern Railway and wabash. Thea
run from about 35 per cent to 10 pc
cent. They include systems that depenl
for earnings to cover devidends on tn
| movements of traffic in the second hal
OF the year, or after the crop seaSol
! opens and the maximum loadings o
| coal and iron ore are under way.
Second Half Year.
In the second half of this year com
parison will be made with reduce
earnings for part of the period in 192
and with higher general maintenance
| OuSIo uuI iIlR Iklc summer ana FHi
months of that year than will be re
quired from now on, owing to the pro
gram of making such expenditures d
the Spring instead of concentratin
them into the late Summer and earl
Autumn months. For this reason it |
expected that the second half of tn
year will present quite a different Pic
ture of railroad net results than is ba
ing given in the first half. and tina
while margins for dividends in numer
Gus cases will not be satisfactory, the
will be Sufflcient to cover rates MOI
being paid.
Taking this situation into account
and with it the fact that the averaq
OF railroad stocks this week droppe
to the lowest in over three years, Their
has been considerable investment buy
ing of the better grade of rails, on whicl
the average return has been in excea
of per cent, and In individual issuet
from 2 per cent to nearly 8 per cent
These yields apply to stocks that al
protected against dividend reduction
by conservative financial policies In tn
last five years, during which it has fra
! quently been the case that surplu
earnings have been from so to 100 pc
cent higher than the amount require
for dividends.
| (CopyriEht, ls3oJ