Evening star., 1930-12-04
u. S. NEEDS RAILS,
But EARNINGS DROP
ParadoxicaI Findings Listed
in |. C. C. Report, Show
ina Loss of Business.
sy the Associated Press.

Ry the Associated Press.
"The country still needs its railways
and can support them," the Interstate
Commerce Commission observed today
as a cheering word in an annual report
chiefly illustrated by statistics OF declin-
ing business for carriers last year.
BY July the number of railroad work
ers was l,53l, I'll, which was 2l3.165, OF
IL per ceptAless than those so employed
the corresponding month of 1929.
Operating records of the class / lines,
those which, incorporate more than 80
per cent of the countrys total rail mile
age, showed q reduction OF freight train
miles, freight car miles and gross and and
Known forms of.registering freight busi-
ness The entire showing was attributed
to the heavy decline in gross ana net
earnings as result of the economic de-
preston which began IN 1929"
Passenger Revenue Cut.
eff railway finances were suffering
only from the fact that recession In
business is being experienced as IN otner
industries of this country and OF the
world, it might be sufficient to point out
that in Judging of railway income one
should in fairness consider the good and
bad years together" the commission
continued.
"But a different and more threatening
financial difi1culty confronts the rail-
ways. This is the effect OF other forms
of transportation. With plant devel-
oped to carry great volume OF paSSen-
ger business, the railways find them
selves confronted with a steady lessen
ing in the volume of passenger travel
by rail and consequently in gross reve-
nues from that source.
'The passenger revenue of 1929 was
over $414, 1000, 900 less than that Of 1920.
It is true that the freight revenue was
$49S, ,000.000 greater in 1929 than in
1920, but the prospect of a continued
expansion in freight business to Offset
the further loss in passenger business Is
darkened by the competition Of water
lines, pipe lines and trucks, and by
changes that may check the growth In
demand for ton mileage, such as econ
omy in the use of coal, changes in the
location of industry and the relatively
slower growth Of population.
Financial Health Seen.
However, the country still needs its
railways and can support them. With
the traffic of 1929 the railways were as
Q whole enjoying comfortable degree
Of prosperity, even though they did not
reach the full return upon their prop
erty which we think would be reason
position, their capitalization in recent
years has not kept pace with their in
vestment, and the relation of their net
income, after interest charges and all
taxes, to their capital stock was never
better in their history than 1t was in
1929"
The commission invited the attention
of Congress to the statute provided for
the recapture by the Government of ex-
cess earnings from railroads, and in q
qualified way proposed its repeal.
I'VE are inclined TO the opinion that
these practical objections outweigh the
theoretical advantages Of recapture," the
report said "and that the wiser course
to pursuesi Is to repeal the recapture pro-
visions in their entirety rather than tc
attempt to improve them by amend
ment"
The commission confined mention oi
ra lroad consolidation to report of the
last December announcement of its plan
for putting all rail properties into q
systems. No action has been taken. :
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