Railroad Earnings

The Bureau of Railway Economics made report last week on the 1925 earnings of 189 Class I railroads having a total mileage of 236,000. These earnings may be interpreted by percentages in two ways when laid against the property as evaluated by 1) the Interstate Commerce Commission and 2) the railroads themselves. The I. C. C. sets as a "fair" mark for earnings 5.75% on its own estimates of the property value. According to this, these Class I roads fell $23,826,000 short last year. Similar deficiencies from the standard in past years total more than a billion dollars since 1921. Worse, the roads value their properties at figures substantially higher than those of the I. C. C. They would point out this table of earnings: .............% ON I.C.C. BASE ....% ON BOAD BASE

1925....5.63................4.83

1924....5.01................4.33

1923....5.22................4.48

1922....4.41................3.61

1921....3.33................2.92

Much of the difference between goal (5.75%) and actual earnings may justly be placed on the enormous amounts spent by the roads for much needed new equipment, improvements and extensions. Last year $754,000,000 were so spent, the past four years about three billions. As a result railroad equipment of the U. S. is in excellent condition.