Losses & Loadings

A doleful place is the Bureau of Railway Economics of the Association of American Railroads in Washington, where in a series of cumulative and comparative statistics the woes of the U. S. carriers are written. Last week the Bureau regretfully announced that in the first seven months of this year the 145 Class I railroads earned 1.69% on their investment--down from 1.99% in the same period of 1934. Gross revenues were maintained at virtually the same level but net operating income dropped $40,000,000 to $221,000,000 for the railroads as a whole. In July net operating income for Class I carriers declined 24% from the same month last year.

Net operating income is by no means clear profit. From that accounting figure must be deducted all fixed charges including bond interest. And last week the Interstate Commerce Commission, always about a month behind the Association, reported that in the first six months of 1935 the railroads as a whole failed to earn fixed charges by $55,000,000.

Such gloomy reading was ignored by stockmarketeers--with good reason. Railroad securities have been strong lately on brighter carloading reports. And last week's carloading figure--679,800--was the best for any single week in nearly four years, an increase of 53,000 from the week before, 32,000 from a year ago.

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