The San Antonio Light (San Antonio, Tex.), Vol. 42, No. 347, Ed. 1 Monday, January 1, 1923 Page: 7 of 12
This newspaper is part of the collection entitled: San Antonio Light and was provided to The Portal to Texas History by the UNT Libraries.
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EARNINGS OF
RAILROADS 111
19221NCREASE
Good Showing Made De-
spite Difficulties Made
by Strikes.
ALSO REDUCED
RATES
Rates and Labor Wage Are
Dominating Factors in
1923 Outlook.
By ARTHUR P. MAHER.
Certain real achievements in the face
I extraordinary difficulties have been
rjtteu into the record of the trans-
irtatiou industry since January last.
previous year had been one of
adjustments. The efforts which had
leen made during 1920 to overcome
the conditions growing out of the
government control were continued in
1921 and the closing months of that
(ear gave sufficient evidence that
much progress had been made. It
was also fairly clear that the worst
of the business depression had passed.
At the beginning of 1922 the out-
look for the year could not be de-
scribed as other than
Some wage reductions had been made
fuel and material costs were lower
and events indicated that further re-
ductions in costs would be possible.
\ Only the continued agitation for rate
reductions overshadowed the outlook
hr the roads. Most railroad and
Aecutives were inclined to recognize
th necessity for some degree of reduc-
tins in rates and were willing to share
shippers at least a part of the
enomies which they knew would rc-
• t from further wage cuts.
The first quarter of the year on the
w(>lc bore out these optimistic ex-
piations. Conditions during the win-
t< months are never favorable for
eqiomical railroad operation but in
Jiuary and February the monthly re-
tina were at least satisfactory while
th increased traffic in March in an-
tibation of the coal miners' strike
onApril 1 was of material aid in in-
cijslng earnings.
|he strike when it came seriously
| aflcted the traffic ami earnings of
sob of the Eastern lines but on the
w|le its effect on the country gener-
I al] was less than had been antici-
pdd. Other traffic continued to move
in) considerable volume the special
fe.ure which marked the year being
th heavy loadings of merchandise and
E mtellaneous freight. Some of the
I lip which served non-union coal
I fills naturally did a capacity busi-
| n« and their heavy earnings helped
I ((increase the average for the coun-
I t(
Traffic Increases After Strike.
I M Resumption of coal mining in Sep-
r. with the increased traffic
yich it brought coincident with the
Mini seasonal increase in the move-
tint of tonnage made the difficulties
1 S the roads more acute. Tonnage of-
yed for shipment rapidly increased
every section of the country and
I ifore the end of the month the sur-
|ua of idle freight cars which had
listed for more than a year dis-
( Appeared and a car shortage com-
t fenced to be felt. At the time of the
| seasonal peak in traffic in October
tie shortage reached considerable pro-
| portions.
On the whole however the roads
were very successful in meeting the
demands upon them. Freight move-
pnent (luring October as shown bv the
tweekly reports of cars loaded was in
[excess of the movement during that
Buonth in any year with the single
I'xcepiion of 1920. when the largest
Itraffie in the history of our railroads
Iwas bandied. During October 1922
It his record total was closely ap-
|>roached. ]n November loadings were
In excess of the same month in 1920.
I . Supervisory Forces Help.
I This record was largely the result
I'f the loyal service rendered to the
roads during the shopmen's strike by
I heir supervisory officers and the me‘-
■ nani<al forces which they had suc-
|'«eded in building up. Jr was also
|0 some extent at least the result of
■he determination of railroad execu-
Itves to move the traffic offered at
whatever cost and to subordinate op-
■raung economies to providing ade-
Ima'e transportation facilities for the
poultry To the immediate cost of
Ims jiolicy the monthly statements
I operating revenues and expenses
|*ai eloquent testimony. Jr cannot
HJenied. however that the roads as
f whole have earned the resnect and
ronfdenc- of business mon and the
Ifnq-al Public by their aggressive tae-
the strike. The atti-
fnue ol the patrons of one or two
Ines which for a time at least. 'ol-
l»wel another plan of action only
to emphasize the fact.
Übo much for the operating side of
tie railroads during 1922. As .regards
lie financial returns received by the
■oldtrs of railroad securities the rec-
i™ of the year is not altogether sat-
■fadory. For the ten months ended
Rctiber 31 the class 1 roads reported
gross revenues of $4.580653.3.'i»
■ (F'rease as compared with the same
■rod last year o f $101290922. The
■crease in gross nrny be assigned al-
■Wt entirely to the general rate re-
in force during the last half
■ the year when traffic is greatest.
■I to the other reductions made vol-
■arily by the roads previously.
■ n spite of the increased expenses
■sequent upon the shopmen's strike.
■ operating income for the same
■iod increased 11 1.JHK5.513. a reflec-
■ ! ver y largely of increased revenue
Bing the first half of the year. when
Blpanaons with 1921 were almost
■ rely favorable.
■'his was at the annual rate of 397
■ cent upon tentative valuation of
■ Property of the roads as com-
■ed with 3.23 per cent during the
■t ten months of 1921.
■he fall months brought smaller
■ s and reduced net. It win thus
y*" that the progress qf the roads
■removing the abnormalities created
■ng governmental control has not
■' continuous and some ground
■ms to hav been lost during the
■*r months of the year.
■ Security Prices Are Higher.
•****of railroad securities have
bB the main been influenced by the
considerations which have ef-
the prices of other obligations
■enerally similar (luuncter with. of
MONDAY.
course the usual exceptions where
particular developments in connection
with the affairs of a given company
have changed the position of its se-
curities. In general however the
course of railroad bonds has followed
closely the movement of industrial
utility and government obligations
reaching their peak prices in Septem-
ber anu subsequently easing some-
what but maintaing a level well
above that at the close of last year.
Itailroad shares hare during the
year tended to follow even more
closely the movements in the markets
for other securities. In general they
advanced sharply during the first half
of the year and have since fluctuated
rather widely with a noticeable ten-
dency during recent weeks to lag
behind the industrial stocks in the
alternate advances and declines of the
latter.
On the whole rates and wages re-
main the dominating factors in the
outlook for the roads for the coming
year and there is a considerable de-
gree of uncertainty in connection with
both. There arc perhaps slightly
better grounds than there were last
year for hoping that both have
reached a point of approximate stabili-
zation. The argument that the pres-
ent rate structure is a handicap to
business would seem to have been
largely disposed of by the heavy move-
ment of traffic during the year. Un-
questionably. however there will be
vigorous efforts made especially by
the agricultural interests for further
rate reductions and while it is not
believed that the Interstate Commerce
Commission favors further general
cuts political considerations may
possibly induce that body to consent
to reductions in certain specific com-
modities. Unfortunately the popular
demand is for rate reductions on
traffic which forms a very important
part of the total tonnage moved so
that even a small percentage de-
crease will materially affect the
revenues of the roads while the bene-
fit to those who arc bringing pres-
sure to bear for such action is likely
to be very much overestimated.
In the present state of the labor
market it is highly improbable that
reductions in rates if made on any
considerable scale can be balanced
by wage reductions. On the other
hand it is also highly improbable
that there will be any serious agita-
tion for wage increases. The success
of the roads in fighting the shopmen's
strike has had a sobering effect on
the other railroad labor organizations
and some of these have already signi-
fied their willingness to sign new
agreements based upon approximately
the present scale.
encouraging.
ASKS HOW PEOPLE
WILL OSE VOTING
POWER OVER ROADS
Partial Control of Lines Is
Political and Is De-
termined by People.
By ALFRED P. THOM
General Counsel Association of Kail-
way Executives.
The controlling facts relating to
transportation by railroad are axio-
matic and have become r.lmost common-
place.
No one will undertake to deny:
(1) That adequate rail transportation
is absolutely essential to the public
welfare.
(2) That it must in the public inter-
est be continuous and uninterrupted.
(3) That under a system of private
ownership and operation it is a busi-
ness and is subject to tin ordinary
economic laws which make success or
failure in other lines of business.
(4) That in order to be successful
the irresistible operation of economic
law requires that it must have the fi-
nancial means to insure its existence
its efficiency its adequacy and its
proper development.
All this is clear. The difficulty how-
ever is that this business has been
brought—and under our system of
government has been necessarily
brought—under a government control
which is political. The public which
does the voting has the power to make
it or destroy it.
The great question is bow will the
public use that power. Will it rec-
organize „ the foregoing self-evident
truths and use its power wisely tem-
perately and thoughtfully to build up
and conserve transportation as a busi-
ness to make the income which it
limits adequate for all the legitimate
requirements of this business and to
insure its adequacy efficiency and
proper development or will it listen
to the urging of the agitator to treat
it as an oppressor of tee public and
to cripple and strangle it?
Heretofore the governmental policy
has been to deprive the railroads of
proper participation in the profits en-
joyed in prosperous times by all other
businesses and thus to project it in
an unprepared if not in a starved con-
dition into periods of general business
depression unable to share in the bur-
4ens which adversity brings to the
producing classes—classes which have
enjoyed without governmental re-
striction. the fruits of the period of
prosperity denied to the railroads.
Again all business to be successful
must operate tinder conditions of rea-
sonable certainty and stability.
Will the political control of trans-
portation permit it a reasonable period
of rest certainty and stability in the
conditions under which t operates or
will it tomorrow in response to the
supposed exigencies of party or of
class take away any elements of sup-
port and protection which .'t may have
thought wise and just and may have
provided yesterday ?
These arc some of the important
questions on the answers to which the
future of transportation will depend.
The capacity for moderation of poli-
tical control and its capacity for sta-
bility of economic policy are now on
trial.
It is to be hoped the public will re-
member that notwitbstaniing any criti-
cism which may justly be made against
the present system at any stage of its
development private initiative energy
and genius have created for the Amer-
ican people a system of transportation
which has ever been the tearless pioneer
of useful progress which in half a cen-
tury or a little longer have developed
the American continent and enabled
the American people to become the lead-
ing nation of the earth and which in
the recent war. by the mobilization and
co-ordination of our resources have
snved the civilization and the liberties
of mankind.
Copyright. 195$
Copyright. 1»M.
Roads Must Buy Equipment'
Railways Are Far Behind the Nation’s Growth and the
Equipment Shortage Must Be Made Good.
By ROBERT
Presiden (.American
Within the next 60 or 90 days profit
and loss statements and balance sheets
will tell the story of the railway equip-
ment and supply business for 1922. It
it pretty safe to predict in the mean-
time that the results of the year's
operations will generally speaking be
unsatisfactory. This prediction is made
in spite of the fact that purchases of
freight cars have been the largest in
five years and in fact well up to the
20-year average. Purchase* of locomo-
tives and passenger cars furthermore
have also been tairly large as may be
seen from the appended charts which
show the purchases of the several items
by years since 1900.
This apparent anomaly is explained
by the fact that large orders are not
immediately reflected in plant opera-
tions and profits. Between the plac-
ing of orders and the actual delivery
of the materials and supplies from the
plants there is a lapse of several months
to a year. This feature of the equip-
ment business is brought out clearly
in the accompanying chart.
Repair business last year also was
large due to accumulated undermain-
tenance of previous years and to the
strike of the railway shopmen. Here
again however operating conditions
have seriously restricted output and
the final results will not be any more
satisfactory than those of the mnnu-
fatcure of new equipment and supplies.
Off to Poor Start.
The year 1921 was a bad one for
the equipment and supply business as
it was for most lines of industry.
Orders carried over fo.- construction
in the early months of 1922 were small
and the prices in many cases were be-
low cost. Plants were hungry for work
however and competition was excessive
for the first orders that came into the
market. Then came the coal strike
in the beginning of the second quarter
and the railroad strike in the third quar-
ter. These developments did not help
matters although the railroads con-
tinued to purchase cars in considerable
quantities as the following statement
of monthly purchases shows:
No. of
Month cars
January 9.500
February 14100
March 6.000
April 23.348
May 14.140
June 16.528
July 13395
August 950
September 13.557
October 8.860
November 20350
Total 140.228
Throughout the year there was a
shortage of labor. The opening up or
plants which had been shut down not
only in the equipment business but in
many other lines brought about a com-
petition for labor which raised wages
increased the turnover and made
operating conditions generally unsat-
isfactory. The low output of the plants
increased ovediead charges so that when
orders taken in the earlv months of
the year based on the hope of full
operations were turned out the esti-
mated costs were not realized and red
ink figures were the result.
The difficulties throughout almost
the entire year in getting raw mate-
rials. particularly lumber nnd steel
also seriously cut down the output of
the plants nnd further increased costs.
It is significant of the transpotration
situation in the country today that the
shortage of railway equipment is large-
ly responsible for the difficulties and
delays in supplying the new equipment
so badiv needed at this time.
Foreign Buying Disappears.
During the war years foreign nur-
chases of cars and locomotives helped
materially to make up for the small
buying in this country. In fact for-
eign purchases of oars for several years
past made up a very considerable per-
centage of the total business.
So much for 922. The outlook for
the coming year due to the largo
carry-over and the known needs of
the railroads is decidedly better. Most
plants have work enough ahead to keep
them busy for many months and some
have orders on hand sufficient to carry
them practically through the year. As
the plants have filled up. prices re-
cently have been somewhat better and
should show a margin of profit of there
are no further increases in cost of labor
and material and if sufficient volume
of output can be maintained to keep
overhead expenses within reasonable
limits.
In a recent speech before the Rail-
way Business Association in New York
Charles H. Markham presiden. of the
Illinois Central Railroad made the
statement that “in the live years end-
ing with 1921 the number of locoinu-
tives in service actually decreased 664;”
that in the same period "the number
of freight cars in service actually de-
clined 13521” and that “the decline
in the amount and capacity of the
equipment provided has been accom-
panied by a corresponding decline in
other facilities prevideo."
Need for Transportation.
The cars and locomotives built in
recent years have been of- increasing
capacity and there has been greater
efficiency in handling. Making full
allowance for this however it is very
evident that transportation facilities
have not kept pace with the growth
of the country. The railroads have
been overregulated and have not been
in a position to earn or borrow the
funds necessary to keep their devel-
opment up with the expansion of other
industries and the country gererally.
Even under the most favorable con-
ditions it is going to take several years
and an enormous amount of money for
the carriers to catch up with the growth
of the country and put themselves in a
position to furnish adequate transpor-
tation facilities. The present shortage
represents an accumulation over a per-
iod of ten or fifteen years of excessive
regulation and restriction. In addition
the situation has been temporarily ag-
gravated by the strikes of the coal
miners and the railroad shopmen.
Demand for transportation in the
meantime is still furti. r increasing
and there is very serious complaint
particularly from the argicultural dis-
tricts of loss of markets and crops due
to the inability of the railroads to
handle shipments. Unless the public can
be brought to n understanding of the
real facts |f the situation the present
THE SAN ANTONIO LIGHT.
P. LAMONT
Steel boundaries.
unsatisfactory transportation conditions
are liable to find expression in hasty
and ill-advised legislation in the com-
ing sessions of Congress.
There is a good deal of talk about
lower freight rates on form products.
James R. Howard president of the
American Farm Bureau Federation has
been quoted as stating that “the total
outlay of the farmer for freight trans-
portation is not more than 8 per cent
of his expenditures.” Assuming this
figure to be correct although it is be-
lieved to be high a 10 per cent re-
duction in freight rates would only be
a fraction of 1 per cent of the former's
budget.
And yet a cut of this size might
prove disastrous to the railroads un-
less there were compensating increas-
es in rates on other commodities.
What the farmer needs is better mar-
kets for his products and lower costs
for the things he buys. The former
involves the foreign situation and the
latter is largely controlled by labor
costs. It is difficult to see how there
can be any material decrease in wages
without an increased supply of labor
and this brings in the immigration
question.
Busy Years Ahead.
What the farmers a.d the whole
country really need is not lower freight
rates but better transportation facilities
and these are only possible if the rail-
roads are allowed to earn a sufficient
return on the invested capital to at-
tract additional capital.
During the period of liquidation in
1920-21. which proved so disastrous to
many industries there wcr< compara-
tively few failures among the railway
equipment and supply companies. This
was due no doubt largely to the fact
that there had been no over-expan-
sion during the war period and that the
character of tho business is such that
it is not necessary or possible to carry
large inventories as a rule materials
can be bought only after orders are
taken. The industry as a -. hole there-
fore is in sound condition and while
its capacity has not been well oc-
cupied for several years past tho plants
have been maintained and can be re-
organized in a comparatively short time
to take care of even tho large volume
of business which is bound to come
sooner or later.
Assmuing. as we believe that In
the end the public and Congress will
deal fairly with tho railroads there is
sufficient business ahead of the railway
equipment and supply companies to keep
them well occupied for several years.
Copyright 1922.
ELECTRIC COMPANIES
STAND ON THRESHOLD
OF HUGE DEVELOPMENT
Generation of Power in Next
Seven Years to Be More
Than in All History.
/ nan in ah nisiory.
BY M If. AYLESWORTII. g 9 MB
With an output of approximately
fifty-one billion kilowatt hour* and 9B 89
with over $750000000 raised for re- K@
funding. new construction extensions MM
and betterments the electric light nnd
power companies of the country dur- HM * aHB
ing 1922 continued the same steady BS Bf-B
march of progress and growth main- MM yw a w W /% mh xsa Bm
Commonwealth Bank & Trust Co. Il
on the threshold of a great com pre* M 9 HE
hensive and complete development era. HOUSTON ST. AND AVENUE C. K
It will be called upon to generate with- MM BBS
in the next seven years as much XiM
electricity ns it has generated so far M® MM
Resources Over $2000000.00 M
mal credulity because at no time has Bl| MM
the development program ever been KM
able to keep very much ahead of the KM
The harnessing of the nation's U Conducts a General Commercial Banking Business Including H
water powers alone and the contribu- MM
tion of their energy to the productive
‘of I CHECKING ACCOUNTS FOREIGN EXCHANGE fl|
every year for the next decade or v Apr DAVCC TDAVCI CDC kBI
two. Already applications are on file LUvK DvJAILO ll\/\VELLi\J
with the Federal Power Commission a twtmH Ml
involving 17692.000 primary horse- gß| SAVINGS ACCOUNTS H
power and projects nggregating 2- KM Mah
500000 primary horsejstwer are now Smß
under construction. The estimated WK 9hK
capital involved in the projects Ks
granted preliminary or final permits MA
and licenses is $778000.000 and the . MM
transmission distribution and ultimate -w X" J f KB
utilisation of the electricity generated I / /'/ MaE
by- them will inv<\c an additional I / IJ/ KM
expenditure approaching five billion MM J 9 jK
dollars. These estimates do not take /f ’ S’®
into account requisite reserve steam 39 '”■< / X /
plant equipment which will undoubted- • Suß
ly carry the total well above the six "Bl
billion dollar mark. t*gß XI
But 2.500.000 horse|>ower is only a a COMPOUNDED QUARTERLY gl
small part of the whole. The total WHg
hydro-electric horsepower n waiting KIB
development is 34.000.000 nnd it is Mm £jS
expected that in the ordinary course HI
of events all of the 17.tKt2.000 horse- nrctrrnc
power applied for. will be in operation KM Ui r IvtKb
by 1930. with many new projects under Ka! if
construction or in contemplation. U.—. I L-x
While much of this hydro-electric Kl Harry Landa Freaident ;*
energy win be used to replace the 91 W. R. Wiseman Vice President T. N. Smith Cashier
electricity now generated m coal- _ ~ _ . .’ _ _ „ . „ . . n ~
burning power stations there will be KB T. H. Dennis Asst. Cashier I hos. H. Jarrell Asst. Cashier
no let-up in the erection of huge *
-team turbine stations particularly in
the great industrial centers in the MB morrTHDC
East. Here there is only water jwwer I L) 11\ t-C 1 Dt\O
enough to supply a small part of the; V
available load and the great bulk of MM Harrv Landa Mrs Elizabeth Moore /
electricity will have to be generated |» ” a .. Moore <
is it is at present in large modern. I W. R. Wiseman Hugo Kott
■oal-burning power houses. The ten- 9g T. N. Smith Leo M. J. Dielmann
lency however will be to replace i li c TL u i 11 - t
many small stations by n few larger I Ravage 1 nOS. H. Jarrell
>nes and to locate these whenever
Possible close to the coal mines.
druction of high-tension transmission If you are considering a change in banking connections please
'ystems with voltages ranging as e J -.1
■a 220000. Ml confer or correspond with us.
_ The electrical public utilities in the
L'nited States surpass in size and out-
vut those of any other country in B
he world. Their development is a M
ribute to the genius sllill and daring
>f private enterprise for more than B
17 |>er cent of the entire output of
dectricity generated by th« r public
itilitiea of the country comes from
lower Slations privately owned but MM S 8 v
e« tn by
1
San Antonio National Bank
The First National Bank in San Antonio
Surplus and Undivided Profits - - ■ - $234000.00
F. HERFF Preaident
T. D. ANDERSON Vice Pre* and Cashier
F. HERFF LEROY G. DENMAN
T. D. ANDERSON G. A. DUERLER
MISS M. E. BRACKENRIDGE THOS. H. FRANKLIN
Capital - — $500000.00
Wishes You a Happy and
Prosperous New Year
The
CHARTERED 1866
OFFICERS
DIRECTORS
MNVARY 1 1923.
G. M. HARCOURT Asst. Cashier
W. A. RAMSEY Asst. Cashier
DR. ADOLPH HERFF
WM. L. HERFF
WALTER NOLTE
!
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The San Antonio Light (San Antonio, Tex.), Vol. 42, No. 347, Ed. 1 Monday, January 1, 1923, newspaper, January 1, 1923; (https://texashistory.unt.edu/ark:/67531/metapth1592264/m1/7/?q=central+place+railroads: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; .