Henderson daily dispatch. (Henderson, N.C.) 1914-1995, 1937-04-02

within shouting distance of their all
time peaks. Coal the principal energy
producer for steel mills and other cap
ital goods Makers, brings in 80 per
cent of the average roads revenues.
Hence, the probability of peaceful
renewal of the coal Encouragement
and the cleaning up of the steel-labor
controversy are a real boon to the
carriers.
90 New Pension Plans. Fear of
the heavy costs of the railroad re-
tirement legislation enacted last year
has been weighing down rail securi-
ties for sometime. Recently, however,
the arrangements got together with
the railway brotherhoods. This
agreement will save the carriers mil
lions every year through the elimina-
ton of overlapping private pension
systems. Moreover, the threat of
new retirement legislation and costly
court reviews seems to have been
avoided.
Current liabilities" (unfaborable
near-term factors):
O Surcharge Revenue Loss The
10 per cent emergency freight sur
charges which the carriers were al
lowed during the depression were drop
ped off on January 1. This means that
1887 traffic will have to be more than
10 per cent above year ago to make
up for the cut in rates. AS matter
Of fact, the loadings gain for some
roads so far during 1887 has more
than offset the surcharge loss More
over, some of the lost rates will prob
ably be restored
CD Wage Increases. Labor leaders
are asking for an increase of 20 per
cent in wages. This advance would
boost the carriers annual labor bill
by an estimated $4OO,OOO,OOO. mas
much as the total net income of the
entire industry in 1886 was only $780,
100000, it is easy to see that such an
tipping of wages would slam the roads
right back into the red.
CD Labor Restrictions. There are
now a number of bills before Con-
gress which would further increase
labor costs. Among them is one call
ing for a six-hour day with pay for
eight hours. Another shortens train
lengths. A third calls for full crews
1t is believed that these three bills
alone would take $6OO,OOOOOO more out
or the carriers pockets, but their
passage is doubtful.
(4) Higher Material Costs. All
companies whose selling prices or
rates are fixed by public regulation
are in bad position in times such as
these. Material costs are mounting
steadily. Steel and iron prices touch
ed new top since 1929 The new
Guftey-Vinson bill will lift coal prices.
meanwhile, freight rates and passeng-
er fares do not go up. Furthermore,
II we have real initiation, with prices
rising almost daily, the carriers would
be hog-tied.
Fixed Assets" Favorable long-term
factors):
Cd Basic Industry No matter
what political system we adopt, rail-
roads always will be a basic necessity
for moving heavy freight. It is
roughly $500 miles from Hudson Bav
to Gulf of Mexico, and $500 miles (.
from the Atlantic Ocean to the Paci-
fic. Over this vast area stretch some
Z|5,OOO miles of railroad. At least 60
per cent of this mileage should be a
permanent integral part of our in
dustrial life. ~ ~
CD Arrangements now Awake.
During the first century, the railroads
only competition was from stage
coaches and canal-boats. The great
urge to improve service, which compe-
tition provides, was lacking. Like
most "sick" industries, the major
cause of the carriers difficulties rests
with their arrangements. Perhaps the
most optimistic factor in their out
look today is the new attitude of rail-
road bosses. They are. now paying
more attention to the operating ex-
perts and less to the banking kibitzers
with startlingly good results:
sFixAd Liabilities" (unfavorable
long-termi factors):
Cd Competition. Notwithstanding
the new fighting spirit of rail man
ayers, the handwriting on the wall is
plain. Certain classes of business that
once belonged solely to the rails, must
now be shared permanently with 9TH