Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-17
RAIL INVESTMENT
YIELD 3.3PER CENT
Steady Decline in Passenger
Earnings Shown by Bu-
reau Report.
Dispatch to The Star.

NEW YORK, February 1.-THE re-
turn on the property investment of
American railroads last year was 3.3 per
cent. In December it was 25 per cent.
Under the tranSpor vation act which was
formulated 10 years ago, the carriers
were allowed to earn on their property
the period directly following the war,
the results in 1880 we're the most I'M
favorable in any year of operation under
the present rate situation
These figures are contained in the re-
port of the Bureau of Railway Eco
Monies, which has analysed the conse-
quences of the 1880 depression on rail-
road receipts. One of the striking fea-
lures of this survey has to do with
passenger earnings. These have been
dropping steadily for decade but at
one time in 1929 appeared to have
reached the point of sterilization. How
ever, last year they fell to the small
est total since 1906. 1t Is the effort of
the railroads to get back some of the
business that they have been losing to
the bus lines and to private automobiles
that has led to the reduction in rates
of SO-called Second-class fares to 2
cents a mile, with even greater conces-
Sions given to encourage long-distance
travel.
Freight Traffic Decrease.
The drop in the amount of freight
traffic last year was IA per cent as ex
pressed in tons, and Is per cent in
dollars.
The sections of the country showing
the highest ratio of net operating in
come last year and the best return on
property investment were the Pocohon-
tas region, where IL per cent was
earned on the investment, and in the
New England region, where it was as
per cent. This compares with the per-
Missile return of So per cent and with
the average return for all roads in the
United States last year of 3.3 per cent.
On the other hand, the roads in the
Northwestern region in 1880 earned only
212 per cent on the property investment,
those in the Southern district 2.6 per
cent and carriers in the Great Lakes
district % per cent.
Eastern roads had a decrease in net
operating income for the IL months OF
81 per cent, those in the South of 33
per cent and Western roads about 2912
per cent Compared with the average
decrease in operating income of about
30 per cent for the IL months for all
roads. there was loss in the month of
December of 31.3 per cent, indicating
downward.
What has happened in the railroad
industry with respect to earnings has
been duplicated by many of the indus
trial groups. This fact was brought out
in a compilation by Moody's Investors
Service, which shows decrease in earn
ings of nearly 36 per cent in a group OF
industrials comprising 375 companies.
On the other hand, better COMPARE
&c do xryit - ha T0rin ~
1880 For instance, while the net re-
duction between 1880 and 1929 for one
group Of 219 industrials was 1913 per
cent it was only % per cent below
1928. while the difference between the
net in 1880 and in 1927 for these same
companies was ITS per cent. Even
better contrasts are made with 1925,
with the net off only 1876 per cent. The
business improvement and the bull mar
ket had been running two years when
these results were attained
Going further into the analysis of in
dustrial earnings, Moody's finds that
out of 46 industrial groups about 40
per cent last year reported better earn
ines than in 1926. Among these in
dustries were agricultural implements,
amusements, chemicals, drugs, bev-
verages, household products and tobacco
with chain stores and financial COM
panleS also showing oecldeu gam III
1880 over 1926.
Public utilities are in a class by them
selves with respect to earnings A group
of 95 light, power gas and traction
companies showed gain last year OF
about per cent over 1929. while a
slightly larger body of telephone and
telegram companies had loss of
little over per cent. These figures
will be somewhat less favorable when
the reports for the first two months of
this year are available, for there has
been a progressive decrease in public
utility earnings now for some months