The Washington times., 1938-05-21
The Railroads Get Old

The Railroads Get Old
rrERE are some significant figures Qatest available
Il end of 1850 American railroads.
Funded unmaured debt mainy bonds) ). $4,000 oSs0oO
Par RntsH 7sue 0eS n1"S stock ssSS
Preferred stock A0'O'O''OOO
vror,ovs. ....-..,...... 1oss,oOo
1ahSUs:s eAbout 800 900 estimated not workngj
Employees wages year 19S6........'.'' 10'S0AS''S0
Total operated trackage miles. ............. $4,000
Locomotives in service ..'.''..''''' aoOU ooOOU
FREIGHT cars in AISOOOO
Passenger in service. ...........:...'' 4A'o0o
Additional facts about the railroads: Thirty-seven
Class 1 roads (roads whose operating revenues are
S1OOO0O0 year over in the hands OF the courts
ten of them being in recevershp and tWentyseVen III
trusteeshp Interest accrua png up over interest
payments at the rate of year. total accumu
lated unpaid interest being than $6OOOOOOOO
Those figures outline picture of an industry suffer-
ing from several troubles at all of them serious
For one the main railroads were laid out in the days Oh
financial pirates and cut-throats-
DGTu"g' AN Vanderbilt, Gould, Fisk, Scott etc.
UTOUL"g O'~ who thought nothing OF dupEcat-
ing routes paying too much for equipment watering
stock and rolling up big bond issues These gentlemen
were succeeded by railroad Observation-Disclosures, the
elder Morgan, Hartman, HILL Huntington, etc.-Who
didn't believe much in amorzing bonded lndebteoneSs
They preferred to railroad stocks as blue chips IN
their big Wall Street poker game, and to make railroad
bonds permanent Of income for coupon cppers
40 that nowadays there railroad bonds outstanding
on bridges long since washed out replaced engines
retired in the ninee and The debts just weren't
paid off,
The automobile, both passenger and freight has cut
heavily into the railroads business, especially their
shorthaul passenger trade just the railroads some
seventyve years ago began doing the canal and river
boat business to DEATH There will probably be enough
long-haul business for reorganzed and shakendown
railroad system for generations to come but there isn't
enough business of kind to support our railroads IN
the STYLE to which they became accustomed in their
heyday.
Various kinds of remedies are proposed. Most Of
these based the proposition that we have to keep
the railroads they because the bondhoders must
go collecting their interest; to do
FOUT IN some anything that would seriously cut
more money! down the bondholders interest
would be too great jolt to our economic system.
The favorte remedy under discussion is another
loan from the Reconstruction Finance Corporation, OF
anywhere from 400 to 900 million dollars
We do not believe that will the railroads illness.
Repeated Government loans with repayments tagging more
and more would eventually compel initiation of the
rency to blow these debts away.
The ReNnedu: We think the railroads will sooner or
The WrinOer later have to go through the wringer.
Bonds will have to be scaled down
somehow Useless routes tracks, spurs branch lines will
have to be abandoned protest though the people and towns
affected may and will The whole railroad transport
system of the United States will have to be reorganzed
meaning trimmed down to the size Of the job it is called
on to do in these days of several different kinds of salts
factory transportation
cFrom York Daily Nsws>