Evening star., 1941-01-01
Huge Defense Needs
Expected 10 Test
Rail Facilities
Traffic in New Yeur
May Reach Highest
Mark Since 1929
BY Cambridge Associates.


The cloud which has blanketed
the railroads in recent years is, at
least temporarily, rolling back.
Under the stimulus of increased
activity in industry earnings are
gaining and hope is rising that a
brighter dav may be in the offing.
Indications point to the release
of a substantial portion OF the
receivership mileage from court
jurisdiction in 194l. Competition
of other transportation media is
no less keen, but the mounting
volume of goods to be moved is soon
likely to tax even this country's
elaborate transportation system.
The year 1941, in fact, promises to
see the highest volume of traffic
since 1929.
For the best part of a decade
the railroads have been struggling
to keep at least partially solvent,
With heavy industry, on the trans
port of whose products prosperity
or depression for the carriers de-
ponds, in the doldrums, this has
been a problem OF no little magni-
tude On top of this debt structures
have been at a level based on traffic
from a highly active heavy goods
industry. The results are we'll
known. One-third of the railroad
mileage of the country is in receiver
ship and there have been times
when the ability Of even the strong
est roads to survive has been ques-
toned.
Efficiency Stepped Up.
III the last 10 years Of low earn
ings railroad management has not
been idle. Economies in operation
have been effected that cannot but
have beneficial results in 1941.
From the standpoint of equip
ment, fewer cars and locomotives
are now owned by Americas first
line transportation system than was
the case 10 years ago.
But these cars and locomotives
can carry larger loads al higher
speeds than was then the case. The
average freight car capacity is now
more than 6 per cent larger than
was the case in 1929 and trains
made up Of more cars than ever
before move at speeds more than
25 per cent greater than was the
case at the climax of our last great
era Of prosperity.
Also these trains use less fuel, less
labor and last longer than has ever
before been true. Improvements
looking to economy and efficiency
OF operation have been effected in
other ways. Heavier rails have been
installed on main lines, more eXpe-
ditiOuS methods have been devel-
oped for handling traffic and better
dIspatching and control systems
have been devised
Financial Positions Better.
Nor have these gains been con-
fined to Traffic alone. Financial
positions have been improved. This
despite the fact that it has meant
rigid fiscal control in difficult times.
Particularly is this true in regard
to funded debt of which there has
been q slow but steady reduction
over the last 10 years. And this
reduction is continuing at a fairly
steady pace as can be discovered
from an examination of railroad
financial statements.
Several factors have come to the
aid of the carriers recently. The
newly enacted transportation bill
eQualizing rates Of other types of
transportation agencies should help
from a competitive standpoint. Easy
money conditions are beginning to
help stronger roads to replace high
interest rate bonds with bonds car
Tvlng lower coupons. through re-
funding operations.
And the rearmament program is
increasing the activity of the heavy
goods industries. transportation of
whose products can be handled ef-
flCiently only by the railroads.
Vital Role for Rails.