Evening star., 1941-02-23
Profits OF Railroad
Equipment Firms
Likely 10 Rise
New Orders Continue
To Pile Up Already
Huqe BockIoq
Special Dispatch to The Star.

Special Dispatch to The Star.
NEW YORK, Feb. 22.-Railroad
equipment and supply companies,
unless all signs fail, are certain of
increased earnings this year, accord
ing to the Standard Statistics Co.
All that remains in doubt is how
big the increase will be- For once,
the industry is not troubled seri-
ously about its ability to obtain
business. There is huge, if un-
equally distributed. volume of busi-
ness on the books now-with plenty
more coming. The chief problems
confronting manufacturers are prob
lens of production, costs and taxes.
Estimates indicate that the rail-
road equipment industry entered
l941 with something like S16O 100000
backlog of railroad business, includ-
ing repair business of all sorts. The
figure was probably IS per cent
larger than the excellent backlog of
a year previous. In addition. the
companies in the group had untitled
orders for war and defense material
valued at close to S400000,000 The
combined backlogs of railroad and
armament business were consider
ably greater than the aggregate sales
of the industry in its most prosper
Gus recent year-1937.
Arms Items Listed.
The armament business embraces
tanks and tank parts, armor, gun
mounts, gun meChanismS. ammuni-
ton, ship castings and equipment,
miscellaneous gears, airplane parts,
machinery. bridge pontoons and
wide variety of other items. Chief
attention focuses on the tank
orders. not only because they are
the most important from the stand
point of dollar volume. but also be-
cause the benefits will extend to a
whole series of subcontracting en-
terprises in the form of work on
castings, parts, etc.
Apart from the tank business. no
protracted DELAYS are anticipated in
taking care of the armament orders
now on the books Much of the mis-
cellaneous business is already in the
production stage and jor por-
ton should be worked off before the
end of 1941. However, before these
orders are worked off, they will
probably have been supplemented
by new orders.
Railroad Buying Active.
AS Of January l. 1941. the rail-
road equipment companies had un-
filled orders for roughly 26000
freight cars, 1874 passenger cars, and
353 locomotives Q44 steam. This
compared with untitled orders for
$4,000 freight cars. 76 passenger
cars, and 155 locomotives (63 steam
at the start of 1910.
In contrast to the single great |
burst of buying in September-No- |
vember 1899, railroad buying was
quite strong through the final half |
of last year. 1t has continued strong, |
as the following tabulation of Janu-
ary orders shows:
Locomotives. 1871. 1910
Diesel 4q 27 /
Electric : ...
Total - rs so /
rreight cars -----------1411s 40
There is every reason to anticipate
Increased rolling stock orders for |
l941 as a whole. In the first place a |
sharp rise in traffic is expected. In |
the second place, the railroads are
in a position to expand their pur-
chases because of improved earn
ings Third, there are special in
ducementS to buy now, such as the
high price of scrap realizable in the
dismantling of old equipment, the |
favorable market for fotation of |
equipment trust certificates, and the |
possibility of tax savings through |
five-year amortization of equipment |
purchases as national defense |
proposition. Wen-informed persons |
in the trade are predicting that 1941
will be the best railroad equipment |
year since 1929
Heavy Traffic Expected.
IF the war goes on, the railroads
may be called upon to transport
nearly 41.000000 carloads of freight
this year, as against 35 5350000 trans
ported in 1910 On the basis of this
estimate, Railway Age looks for
fall peak traffic averaging about
925,000 carloads weekly for four con-
secutive weeks. The railroads now
have on line some 1907 900 freight |
cars, about the same number as they !
had year ago.
The proportion of bad order cars
has been reduced considerably. Yet, !
at maximum utilization, Railway |
Age estimates that $4,000 additional |
cars would be required to take care
of the indicated peak traffic. Al
lowing for necessary annual retire
ments, this would call for acquisition
of 100000 to 10000 new cars.
Including work assigned to the
railroads own shops, the carriers
had about IS, TOO freight cars on
order at the first of the year. After
counting in the January orders,
there would remain an indicated dis
crepancy of $4,000 to $4,000 cars
which would have to be ordered dur
ing the first half year to assure de-
livery in time for the fall traffic
peak.