The Wilmington morning star., 1940-11-11
Business Prospects

Inc current issue of the Railway Age, which
appeared on Saturday, takes an optimistic
view of the outlook during the balance of this
Roosevelt's reelection.
Edltorially it says: president Roosevelt's
reelection leaves our economic prolems. and
our business conditions and prospects. lust
about as they would have been if there had
been no election"
ls atutuoe' naturally, is based on the situa.
uon OF the railways of the country. Its com.
ment continues: "As freight traffic shows
the total production and commerce. Of te
country sharply increased during the third
quarter OF 1889, declined during the first third
o. l94O, increased during the six months. Nav
OCTOBER, inclusive, and were the largest IN
the week ended October 26 that they have been
IN that week since 1885,"
Analyzlng the railroad situation on broad
lines to account for its position. the n,o.-
zine continues:
MOST experience before and much ex-
perlence during the present depression in.
olcates that this upward trend d,,rino 4ha
Will SOllllllue curing The
1lrst half of. if not throughout 1e41 Tho
Ieno OF business throughout 1910 has been
JUST ABOUT the same, and its volume onlv
sngntly larger, than in 1886. This upward
eho mat prevailed in 1886 continued In
VII 'ule' 1881, When it began to be inter.
fupteo by the recession There is strono
reason for believing that the ,,nu,r
trend in 1910 will continue into 1914, 49,
aOeeiefd'e curing next year rather than
oe interrupted. This reason is the contin.
uance OF certain kinds of buying in tbis
country due to the war in Eurone and
me rapidly increasing expenditures If o,r
own government for purposes of nation,,
defense.
what the present trend now means. and
what its continuance next year probably
will mean, to the railways and the rail-
way equipment and supply manufacture
ing industry may be indicated by a few
1l2ures. AS often pointed out in these
columns railway purchases of equipment
and materials are determined principally
~ the amount of railway net operating
income earned. Net operating income in
creased from 500 million dollars in 1925
TO 667 million in 1886 and declined tn son
million in 1887; while railway purchases
OF equipment and materials increased from
4oz million dollars in 1885 to 778 million
IN 1886 and to 81 million in 1927 lot nc
compar the foregoing with more recent
1lgures. Net operating income increased
from 373 million dollars in 1929 r. ZOO
million IN 1888, and the purchases in.
creased from AT million to 698 million
IN the first nine months of 1886 net operat-
ing income was 435 million dollars and
IN l94O was AL million, strongly indicat.
ing that in the entire year 1910 it will be
substantially larger than in 1886 and the
largest since 1890. In the first eight months
OF 1886 purchases were 454 million dol.
lars and in 1910 were 1876 million.
Apparently total purchases in 1910 will
De about $50 million dollars - almost as
large as in 1887 when they were the larg.
est since 1880. And maintenance of pres.
ent trends would make net operating in
come about 1876 million dollars and pur-
chases about 925 million in 1871.
So, it may be said with confidence that
what are called business prospects, in
general, and those of the railways and