Evening star., 1932-06-01
BY J. A. FOX.

The next few months promise to be
crucial ones for the railroads.
To begin with, their borrowings and
loan. extensions this year will approx
mate 100000. the largest part
coming from the United States Treas
ury through the Reconstruction
Finance Corporation. Some of this
will go for homecoming capital eX-
penditures. but the most is for financ-
ing, and another year will bring new
demands.
Loans may be negotiated for any
purpose and thus far they very largely
have, even to State taxes and wages,
with the prerequisite that they must be
to cover obligations undertaken before
the Reconstruction Finance Corpora
tion act was passed. So study of the
variety of uses to which the outside
funds are being put this year gives an
idea of the financial problems the lines
will face in 1888.
Wage Pact to Expire
Next is the fact that the 10 per cent
wage reduction to which the organized
railroad workers voluntarily agreed
February l will expire January 81.
1888, when the pay scale reverts to its
previous status. and the outlook for
renewal Of this pact, which was esti-
mated to save the carriers S215 900 900,
cannot be considered bright. This is
because of the recent declaration of
the Railway Labor Executives Associa-
ton, which includes the heads of all
the brotherhoodS. that the plan had
failed to bring about the hoped-for un-
employment relief
Then, the emergency freight-rate in
NV ln Tyotn cYat1
merce Commission and distributed by
the Railroad Credit Corporation to help
needy carriers meet their fixed interest
oollgatlons is due to pass out March
81, 1888, though it may be extended
at the option of the commission This
however is producing only about S.
100000 monthly.
And against all this is the fact that
the trend of railroad revenues is down.
ward compared with previous years.
the net railway operating income of all
the class one carriers-those with gross
earnings of S1,0O0000 annually-for
the first three months of 1882 being
S66,028,475, as compared with SlO8,-
535,l56 for the same period of 1881,
the rate of return on property invest
ment so far this year being 128 per
cent.
AoouAHSS SUHStdHL.
But there IS an element of encour-
agement entering at this point. For
some weeks-low as they are-loadings
OF less-than-carload merchandise and
miscellaneous freight have remained
just. above constant. with the former
averaging about $4,000 cars weekly.
and the latter. about 900 900 cars. This
indicates in the belief of railroad Off
clals. that the manufacturing industry.
which furnishes this class of freight,
may have touched bottom Grain, live
stock. coke, forest products and ore
also. hold steady, but coal is off, labor
troubles and seasonable demand being
held responsible.
But traffic will have to be much bet
ter than this If many roads are not
to be forced deeper into debt. Thus
1t seems certain that revenue trends
will~be scanned more closely than ever
as the carriers look to their needs for
1888 with even more rigid retrench-
mert
While the roads are seeking certain
legislative reforms principally the
regulation of competing highway car
riers-prospects are not good for any
thing along this line. and it looks verv
much as If what they are able to do
Tor themselves coupled with whatever
llIld1lcldl ala IneV may OBTAIN from
outside sources, will constitute the only
assistance the near future offers.
Thus far. only about 25 per cent OF
the class one carriers have gone to the
Reconstruction Finance Corporation for
aid, the total number of applicants TO,
advances having been. as OF Nav 21
7s lines, about half of which are class
one.
The loans they sought aggregated
s348,591.815. Of which approval had
been given to sl64.608513 for SO lines
bv the Interstate Commerce Commits
sion, which must o. K. these grants
On 81 applications involving s66,942.-
138.~ no action had been taken. and il
Is understood that in some instances
these requests had been Withdrawn
Loans totaling s2,O9O0oO sought by five
smaller roads have been denied. on the
broad ground that their probable future