Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1936-08-07

during the past three years than in
the previous quarter of century.
Faster schedules, streamlined trains,
Aforementioned cars, electrificatiOn,
crude-oil-burning locomotives, attrac-
tive excursions, and dOor-to-door
freight service are few of the i'm
provements which have focuseu pub
lie attention on the rails. At the same
time operating costs have been cut to
the bone. Most important of all is the
slash in passenger fares, which l be-
lieve is real leap for life"
Raii-EquipmentS Interesting.
A resumption of earning power of
the railroads would be a great boon
to national prosperity. OF the rolling
stock now in use, very high per-
centage is obsolete or in bad condl-
ton. For instance, 100000 freight cars
and 10000 locomotives need to go in
to the repair shops. The present vol
ume of traffic is being handled easily
but an increase, of say 20 per cent,
should force arrangements to place
large contracts for all types OF rail
equipment. The tremendous savings
which are made possible by the use
of modern equipment might release
huge orders as soon as working cap
ital permits. In fact believe that one
of the best ways to participate in the
recovery of the carriers is to buy the
securities of certain railroad equip
ment companies.
Recovery so far has been very Sc
lective. Business is today 70 per cent
above the low, according to the Bah
sonchart, but this is an average of all
industries. Some groups, such as cleo
trio power, radios, and refrigerators
are at record hifhs. Others such as
automobiles, textiles, and shoes are
back to normal. But third CLASH
fication, which includes railroads,
building, and certain heavy industries
is still far below normal. The mater
ials used in these industrieS-coal,
cement, iron ore, lumber, steel-are
the biggest freight items in normal
times. Every year since the recovery
set in new group of industries has
come to the fore. Next in line may be
the railroads and their common stocks
which are known as leverage is
sues.
Leverage Possibilities.
AAC Ao1AAOeIOO N1S OAROAoCo c1C la
Dor, fuel, taxes, and the interest on
their capital investment. 1t costs very
little more to carry 10 cars filled with
passengers than to pull 10 half-filled
cars. Last year the New York Cen
trail made enough money to pay it's
bills and to meet the interest on it's
bonds but showed only two cents per
share profit. Yet only IL per cent
increase in last years gross revenue
could boost net income roughly $780,
100000 which would be equal to Sc
per share. Thus, only a IL per cent
gain in gross revenues would repre-
sent a fantastic percentage gain ir
net income accruing to stockholders
That's what is meant by leverage.
There are, however, some bearish
factors in the rail outlook. The in
dustry is dominated by four Of thu
strongest labor unions in the coun
try hey will attempt to skim thu
cream just as fast as it rises. Then
there is the tremendous funded deb
which should be cut down as rapidly
as possible. Taxes and initiation ar
also serious menaces. Finally, ther'
is the pace set by the other methods
Of transportation which must be met
Continued Improvement in business
however, should offset these bearisf
influences during this recovery pc