Downgrade

While other industries are leveling off, the rails have yet to hit bottom. Though a spurt in March carloadings brought rail revenues up, April carloadings turned down, and total revenues, which were also up in March, will probably follow them down. Western roads will be less hard-hit because of an expected boost from bumper grain crops, but Eastern roads face reduced shipments from heavy industry and continuing heavy passenger deficits. The Baltimore & Ohio reported an April drop of 24.6% from 1957 revenues, a decline of 57% in net income. The Pennsylvania's April deficit of $4,727,327 ran its loss so far this year to $19,626,948; the Illinois Central cut its quarterly dividend to 50-c- from 75-c-.

Deepest in red ink is the New York Central. In the first four months of '58, the Central lost $20.7 million; its freight carloadings are running 21% behind last year and its April traffic was 25% under 1957. At the annual meeting last week President Alfred E. Perlman told stockholders: "Frankly, I see no signs of a pickup. There has not even been a sign of a complete leveling out or a 'saucering out' so far as carloadings are concerned." Furthermore, no black figures are in sight, Perlman said, unless Congress passes some of the relief recommendations of the Smathers bill (TIME, May 5). With a deficit that will probably run over $50 million, the Central has had a hard time finding stand-by bank credits; it wants $50 million, but so far has lined up only $25 million.

Asked by a stockholder how long the Central could stay solvent, Perlman replied: "I see no difficulty for the rest of this year. Beyond that I do not want to say; I have no crystal ball." Asked if dividends could be resumed, Perlman snapped: "Is that question necessary?" The Central, he added, has deferred a $150 million improvement program, and has been slashing its operating costs.

Taking a sarcastic view of President Eisenhower's optimism, Perlman said: "I won't be as foolish as the President and say things are going to be better every month. If he finally is ever right, however, we're going to make a heck of a lot of money."

This file is automatically generated by a robot program, so reader's discretion is required.