Back to Competition

The U.S. railroads, which all during the '30s labored under such big debts and low revenues that many an observer wrote them off as ripe for Government socialization, last week continued to turn in a new, startling kind of performance.

Edward J. Engel, president of Santa Fe, reported net railway operating income for last year at $83 million as against $40 million in 1941. During the year the road slashed over $18 million from its 1941 debt of $323 million.

New York Central reported last year's net profit at $49 million, or nearly six times as much as the road earned during the entire decade of 1932-41. It reduced its 1941 debt of $969 million (including lessor companies) by $51 million, bringing total retirements for the decade to $191 million.

Other notable earners who have wisely used profits to reduce debt are Chesapeake & Ohio and allied roads controlled by Robert Ralph Young (TIME, Dec. 28); Chicago, Burlington & Quincy, which earned $29 million in 1942 and knocked $21 million from its 1941 debt of $236 million; and Southern Railway, which earned $33 million and retired $20 million from its 1941 debt of $281 million.

Typical reductions such as these are making a big dent in the rails' total estimated debt of over $10 billions. The continuation of this policy will put the roads in a position after the war to bid for traffic through rate reductions, and thus return to the fold of real competitive industry. This week ICC was working on a plan to make a certain amount of debt retirement mandatory.

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