Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-13
REDUCTION IN COST
DOOSTSB. 80. NET
Earnings for Year Placed at
SALT Per Share of Com
mon Stock.
spseIal plspatsh . The s,ar.

| Special Dispatch to The star.
NEW YORK, August l3.--The Balti-
more a. Ohio Railroad Co, largely
through a si7,23oI 64 reduction in
operating expenses for the frst six
months of this year as compared with
the corresponding period Of 1890, sue
ceeded in lowering s24,0sI .3as drop
in total operating revenues to q &c
crease Of only Sc, sos in net rail.
wav operating income, according to tiit
Wall Street Journal
AS a result Of this curtaflment IN
the expense outlay. the Baltimore e.
Ohio for the year ended June 80 wa
able 10 hold its net income up TO g
figure estimated to be equivalent 10
SALT share on the common stock,
after allowing for preferred dividends.
These estimated earnings for the b e.
o. showed that the B. g. o. covered lis
fixed charges only l.4eo. when the New
York State law covering bonds legal
for purchase by savings banks provides
that a railroad must earn its fixed
charges x times during five out of
the preceding six years, including the
Immediately preceding one, for them to
be acceptable by the State as suitable
for savings bank investment,
SIS Dividend Not Earned.
Baltimore & Ohio's earnings have
been held up to the present point 20 a
great extent through lowering ex-
penses, particularly maintenance. Al
though these reductions in costs were
effected, the current SIS annual dividend
rate on the common stock is not being
covered and charges are not being
earned y times. These facts, with
the added possibility that the last half
OF 1881 viii not show any great Inn
provement. would seem to indicate that
further reduction in the dividend will
have to be made and the bonds win
have TO be stricken from the list for
savings banks
A comparison Of the Baltimore d
Ohios gross revenues, OUTLAWS for main
tenance, transportation and their ratios
to gross, together with net operating
income, for the first six months Of this
year compared with the first half Of
1880 follows:
Gross revenues. So, $50 sea s1os444ass
Maintenance OF way
and structures, ....+.. T,340,o ESQ l24ss,43y
=, Ratio to gross., SO III
Maintenance of equip
ment .t4.-...,-.s... lS.17e.657 23aa9ese9
rr ss;IS & ssS.s slals;sss s7'ssss:
pensses 49,. s4,sss 10 sl,sls:274
W. VIZ dNliik AltDHies lAs91hsE48 lFFT22B13
Expects Shortest Route,
1t will be noted from the foregoing
table that the combined reduction In
maintenance of way and for equipment
amounted to $10,312,695 as compared
with decrease OF $6,344,277 in trans
portation costs. A dollar reduction IN
transportation is a dollar saved. The
same. rule does not always apply TO
maintenance. In some cases IT only
means that maintenance has been post
poned. 1t will be seen in the table
that the only reduction in the expense
ratios was in maintenance of WAYS and
structures, which In the first six months
OF this year took only S9eo of the
roads total revenues against lI.79o for
the like period of last year.
The B. & o, stands to benefit rapidly
from any advance in business ACTIVITY.
This should allow 1t to show economies
from its consolidation program. which
1t Is constantly working on This con-
solidation of the B. e. O. Is expected
to leave it with the shortest route be-
tween Chicago and New York. The
company Is currently increasing its
passenger business between Washing
ton and New York through offering air.
conditioned cars. OF course, the total
passenger receipts for the road show
substantial declines from last year.