AMERICAN RAILWAYS.

Rangitikei Advocate and Manawatu Argus, Volume XLV, Issue 12018, 8 March 1920, Page 2

AMERICAN RAILWAYS.

GOVERNMENT'S losses. HUGE DEFICIT TO BE FACED. United Press Association—By Efectnc Telegraph—Copyright N.Z. Herald Correspondent.JJSS Los Angeles, Feb 5 Of all the internal questions before the American people to-day, that of the railways is regarded’as the most vital. Never before have the railways been in a more precarious position.. When the war came it was discovered that the existing systems failed utterly to carry the added burden, and, in order to eliminate needless competition, the Federal Government found it necessary to take charge. It is fairly safe to say that the vast majority of the people desire to see the lines handed back to the companies. The only opposition comes from the American Federation of Labour, the^rail way brotherhoods, a few farmers’ organisations, and Mr W. J Bryan. After mucn "consideration, Mr Wilson announced that he would return the lines on January Ist, but he altered this date to March Ist to carry the companies over the two months which are the most unremunerative of the year. In what condition will the systems be when returned to their owners ?

Since the change was made on the last day of 1917 passenger rates have been increased r by 25 per cent., freight rates bv 25 per cent, the cost of material and operation essentials has gone up by a similar figure, while the average wages have risen approximately 50 per cent. The Government has sustained in two years a loss of 140,000,000 dollars, notwithstanding increases in rates. Of this total the lines accounted for 120,000.000 dollars, while the difference was made on the running of the express companies, Pullman systems and waterways. The companies will be confronted with the problem of increasing the earnings by an enormous extent if the deficit is to be .made good and any surplus secured for dividends. The law specifies that the lines are to be returned in the same condition as when they were taken, Officials assert that this promise will be fulfilled. Many are in better shape, but in regard to others the Government will pay a sufficient sum to set off deterioration. It is thought that the various systems of the country will need to spend from 150,000,000 to 200,000,000 dollars for equipment and extensions during 1920. How tins huge sum is to be raised, if at ail, deoonds to a largo extent on the legislation, as the public has fidenoe in the railways at present as an investment. The future prosperity of the United,States hinges to quite a large extent on this point. Under Federal ,‘control, rolling stock has been sent anywhere. If the companies now£seek to utilise their coaches to the exclusion of other lines, and if they resume cutthroat methods, there is sure to be trouble, and the public will suffer. It is stated that a 26 per cent, increase in rates, which has been promised, will barely enable the companies to run the lines. Passenger tares at present average a penny halfpenny a mile with a Government tax of 8 per cent, in addition. Practically speaking, there is no secondclass accommodation. An acute car shortage for at least three years is predicted; 700,000 additional freight cars will be required during the next live years, and with material and labour scarce, the task is regarded as an almost impossible one.