Railroad Prosperity

That the recent steady rise of railroad securities was not without good grounds, the annual report of the Interstate Commerce Commission has clearly shown. While the unprecedented volume of traffic threw heavy tasks on the roads, they have come through the year with "unequalled performance" of service. While rates have been in some cases decreased, at an estimated saving to shippers of $500,000,000, the heavy traffic has proved profitable to almost all roads.

This turn towards better times, after many years of financial adversity which the roads have been experiencing, has for the first time brought to the fore as a revenue producer the "receptive" clause of the Transportation Act, whereby one-half of all earnings over 6% on the value of the road's property must be paid to the Government ; from such taxes a contingent fund is to be forced, to be loaned to weaker roads in case of need. About $96,000 has been recently paid in by 16 roads under this clause, although under protest. The validity of this clause is still being contested in the courts.

Equally satisfactory indication as to War accounts is also afforded. The Government, under the Transportation Act provisions, has paid to the carriers a total of $501,322,000, and only $37,677,000 remains to be settled. That the roads can finance themselves almost entirely is shown by the fact that the Commission last year authorized railroad security issues whose par value amounted to $1,213,054,000, as well as the issuance of 1,020,000 shares of common stock having no par value.