Rail Earnings

Rail earnings of the half year, just now consolidated for the entire country, were $494,866,776 derived from gross revenues of $3,038,560,861. Some part of these earnings will go to the Government under the recapture provision of the Transportation Act of 1920. This provides that one half of all a railroad's excess net operating income go into the General Railroad Contingent Fund to help impoverished rivals. Income becomes excess when it goes over 5 3/4% of the road's property valuation. What that valuation should be based upon is in dispute. The Government insists on the 1913 value of the roads, the roads upon their present (and higher) replacement costs. Meanwhile the railroads pay according to the Government formula, but under protest. The Fund, augmented in ten months last year by $732,448.34 (from 33 lines) now approximates $6,000,000, but may not be dispersed because there is no prospect of the valuation quarrel being settled.