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Show iATION SUSTAINS EMIU5 LOSS Federal Government $130,-000,000 $130,-000,000 to the Bad in Rail Operation. Director General Issues a Statement Bearing on Re- cent Road Earnings. j WASHINGTON, Mny 6. Director Gen-f-rnl IIlnoH, in a Jisf:i::.sicn of recent niil-roa'i niil-roa'i c:irnliiK, tonight 'Ii;ifloacd tliat. The povri-nmnt'H dffio.lt in operating1 ! thrj railroads for lh. first thn-e months Hub year, or tho difiVn-nce between not fr.u-nlrk'.'Aind onn-foiirth of the guaranteed annua! coinpen-i.'itioi, va.s about $192,000,- 1 000 for all roads under federal manage- i mtir.e. i Tho government's loss for 19i8 was I'JL'fi, 000,000. The entire government loss incurred in fifteen nonlluj of federal operation was 5 118,000,000. Marked reduction of freight traffic under un-der records ,of wimil;ir ijerlods of the last two years wuro ivHpunsiblo for the bad fhiMneial phowli.tf and condli ion.s in April, though not yer. iv-ported fully, show no promise of Improvement. No Rate Increases. Despite the government deficits, tho director peneriil does not contemplate any general Increase in tho level of rates, but preferM to wail restoration of normal business busi-ness conditions. Tho tcovernment also incurred in-curred a deficit of about $14,5-10,000 in eight months' operation of tho American Railroad Express company, the Consoli-di' Consoli-di' ted irix proas corpoiation, up to March 1, KUIi. "The present unfavorable results nat-, nat-, u rally le:ul to agitation of the ipjcytion whether there ouht to be an increase of ra 1 es," said Mr. Hints In his statement. "My own judgment is that tha present eur.dltious are too abnormal to serve as a basis for any general change in - the level of rrites, and that it is preferable to defer action on that subj&ct until there elm II have been a f idler opportunity to K't more i el fa bio end possibly a more normal measure- of the conditions, mean-wliile mean-wliile rotxrtlncc to every practicable economy, studying the situation with the greatest care, and keeping1 the public fully informed as to developments." Estimate Exceeded. The deficit of li'2,000,000 incut-red by the government in January, February and March as figured by Mr. Hines, greatly ex.cGO.tf 'd tho estimate mado public earlier In the oay by tho bureau of railway economies, btcnuse Mr. Hines calculated tho guaranteed compensation for three months as three-twelfth's of the annual compensation. The bureau of railwav economies calculated each month's share on the basis of the average for that month in the three prewar years. The railroad administration figures a.lso included small roads, not included In the so-called class one, which are under government control, and also expenses of the central administration admin-istration and cost of operating inland wa turways. Mr. Hines explained that his system of calculating tended to show the railroad administration's pcslticn rather at a disadvantage dis-advantage for the first three months, but added: Hines's Statement. "Still It soema pi eferablo to charge a full one-twellth of the rentaj into each of these months rather thou to run the risk of an impression arising, (hat there is any disposition to understate the actual Tenuity. : "To a large extent, the unfavorable results re-sults for January, February and March are due to the fact that business has fallen fal-len off and that expenses could not be correspondingly readjusted. "To a large extent the unfavorable, results re-sults for J j". injury, February and March are cte to the fact that business has fallen fal-len off and that expenses could not be correspondingly readjusted, so that the Joss brgely arises in connection with tho period of readjustment through which the country is going. Industrial enterprises greneraily have suffered embarrassment on account of the fact that business ha3 been 3iirtailed so much more rapidlv than expenses ex-penses could bo curtailed. The railroad ' business is probably in its nature less elastic than any other business, and shows more unfavorably the embarrassments ol readjustment. "Tho entire railroad organization has been and is working most earnestly to readjust those costs to meet the present conditions, but the nature of the railroad business, whether under private or puolic control, is ruch that, to a very lare ex-u;.,l, ex-u;.,l, - it is impo-'ible to offset los in business by a corresponding reduction in costs. On tho other hand, -when there shall re a substantial increase in business, the re vermes therefrom will be largely reflected in the net. because the costs Tv ill not be correspond inedy increased. It is bc-lieved that this improvement will be considerably emphasized by reason of the fact the maintenance work has beon carried car-ried forward durim-r the favorable weather 1 of January, February and j March on a iiberal basis despite unfavorable business, l and this should be reflected in a saving' in ! maintenance costs later in the year, i "In the midst of the present period of postwar reatib'stment. it is impossible to malio any confident statement as to the res. .its of the railroad operations for the remainder of this calendar year. "It is n.y policy to give the public the facts, aixi. where the inference to be drawn is' doubtful, to resolve the doubt in such w,i.' as to avoid the risk of making a statement more favorable than the ultimate ulti-mate facts will justify." |