| Comparative Income Account of the Railways in the United States Considered as a System for the Years ending June 30, 1909 and 1908. | ||||
| Item | Amount | |||
| 1909 (221,132 miles operated) | 1908 (230,002 miles operated) | |||
| Passenger revenue | $ 551,634,278 | $ 566,832,746 | ||
| Mail revenue | 49,508,972 | 48,517,563 | ||
| Express revenue | 61,883,695 | 58,692,091 | ||
| Freight revenue | 1,643,028,564 | 1,655,419,108 | ||
| Other earnings from operation | 69,086,257 | 64,344,481 | ||
| Gross earnings from operation | $2,375,141,766 | $2,393,805,989 | ||
| Operating expenses | $1,568,111,272 | $1,669,547,876 | ||
| Taxes | 82,650,214 | 78,673,794 | ||
| Total | $1,650,761,486 | $1,650,761,486 | $1,748,221,670 | $1,748,221,670 |
| Net earnings from operation | 724,380,280 | 645,584,310 | ||
| Net revenue from outside operations | 5,410,338 | 5,977,268 | ||
| Operating income | $ 729,790,618 | $ 651,561,587 | ||
| Disposition: | ||||
| Net interest on funded debt | $ 293,338,105 | $ 282,354,001 | ||
| Interest on current liabilities | 22,546,779 | 31,835,708 | ||
| Rent paid for lease of road | 120,784,982 | 111,153,013 | ||
| Additions and betterments charged to income | 24,807,546 | 28,086,454 | ||
| Appropriations to reserves and miscellaneous items | 22,587,208 | 21,636,182 | ||
| Other deductions | 70,174,473 | 64,669,546 | ||
| Total deductions | $ 554,239,093 | $ 539,734,904 | ||
| Surplus available for dividends, adjustments and improvements | 175,551,525 | 111,826,683 | ||
| Net dividends | 171,607,550 | 104,074,006 | ||
| Balance to profit and loss | $ 3,943,975 | $ 7,752,677 | ||
In 1909 the "Income Account" of the railways was swelled and confused by including therein $200,725,696 of intercorporate payments, while that for 1908 includes $274,450,192 "Other Income" which, as has been formerly noted by the Official Statistician, swells the totals to a fictitious figure. It is out of this fictitious income that fictitious interest and dividends are paid, fictitious deductions made, and fictitious surpluses accumulated. If "Other deductions" in the above statement had been charged against "Other income" instead of being deducted from earnings from operation the balance to Profit and Loss for each year would have been so much larger.
What becomes of the rent paid by operating roads for leased roads is well shown in the statement included in the Commission's preliminary report of statistics for 1908 in which the amount received by the latter mentioned in the table just submitted is disposed of.
| Condensed Income Account and Profit and Loss Account of Leased Roads for the Year ending June 30, 1908. | ||
| Income Account | ||
| Gross income from lease of road | $111,153,013 | |
| Salaries and maintenance of organization | 390,841 | |
| Taxes accrued | 5,881,352 | |
| Net income from lease of road | $104,880,820 | |
| Other income | 5,436,129 | |
| Gross corporate income | $110,316,949 | |
| Deductions from gross corporate income | 62,232,508 | |
| Net corporate income | $ 48,084,441 | |
| Disposition of net corporate income: | ||
| Dividends declared from current income | $ 33,843,577 | |
| Additions and betterments charged to income | 1,088,002 | |
| Appropriations to reserves and miscellaneous items | 258,580 | |
| Total | $ 35,190,159 | |
| Balance carried forward to credit of profit and loss | 12,894,282 | |
| Profit and Loss Account | ||
| Credit balance in Profit and Loss Account, June 30, 1907 | $ 45,852,031 | |
| Credit balance brought from Income Account, June 30, 1908 | 12,894,282 | |
| Total | $ 58,746,313 | |
| Dividends declared out of surplus | 27,550,596 | |
| Other profit and loss items—debit balance | 2,006,573 | |
| Balance credit June 30, 1908, carried to balance sheet | $ 29,189,144 | |
Included under the blind item of "Deductions from gross corporate income, $62,232,508" in this statement may be mentioned rents of other roads and facilities of which these leased roads are the lessees, interest on funded debt and other interest, sinking funds chargeable to income and other deductions not specifically provided for elsewhere. In case of operating roads this item also includes the balance of hire of equipment, to which, of course, there is a credit with other operating roads.
The significant feature in this statement is the decrease in the profit and loss credit balance of $16,662,887. But this does not alter the fact that what becomes of rent paid for lease of road is no more a concern of interstate commerce than what becomes of the rent paid for warehouses or office space in any terminal. The operating roads pay all the cost of maintenance of way and equipment. The leased roads are not common carriers in any sense. They are simply distributing mediums of the rents paid them—this rent being the equivalent of interest on so much capital. As appears from the foregoing table, the expense of maintaining the organization of these leased properties amounted in 1908 to 35/100ths of 1 per cent.
Distribution of Gross Earnings.
How the gross earnings of the railways reporting to this Bureau in 1909 ($2,375,141,766) were distributed is shown in the next statement in comparison with a similar division of earnings in 1908 and 1907.
| Statement of Distribution of Gross Earnings of 221,132 Miles of Line in 1909 Compared with the Percentages for 1908 and 1907. | ||||
| (Gross Earnings 1909, $2,375,141,766.) | ||||
| Item | Amount 1909 | Per Cent 1909 | Per Cent 1908 | Per Cent 1907 |
| Operating expenses: | ||||
| Maintenance of way and structures | $ 299,757,077 | 12.62 | 13.41 | 13.27 |
| Maintenance of equipment | 358,747,371 | 15.10 | 15.42 | 14.22 |
| Traffic expenses | 48,453,707 | 2.08 | 2.00 | — |
| Transportation expenses | 799,690,194 | 33.67 | 36.24 | 37.50 |
| General expenses | 61,462,923 | 2.58 | 2.58 | 2.54 |
| Total | $1,568,111,272 | 66.03 | 69.67 | 67.53 |
| Disposition of same: | ||||
| Pay of employes | $ 973,174,419 | 41.00 | 43.43 | 41.42 |
| Fuel for locomotives | 184,359,112 | 7.76 | — | 7.74 |
| Oil and water for locomotives | 19,951,184 | .84 | — | .88 |
| Material and supplies | 219,463,028 | 9.24 | — | 11.81 |
| Hire and rent of equipment and facilities | 54,638,243 | 2.30 | — | 2.46 |
| Loss and damage | 56,379,042 | 2.37 | — | 1.83 |
| Miscellaneous(a) | 60,146,242 | 2.52 | — | 1.39 |
| Total expenses | $1,568,111,272 | 66.03 | 69.67 | 67.53 |
| Taxes(b) | 88,531,566 | 3.72 | 3.53 | 3.10 |
| Rentals of leased roads | 114,903,630 | 4.84 | 4.64 | 4.69 |
| Interest on funded debt and current liabilities | 315,884,884 | 13.30 | 13.34 | 13.14 |
| Dividends | 171,607,550 | 7.23 | 4.42 | 8.78 |
| Deficits of weak companies | 20,223,246 | .85 | 1.24 | .19 |
| Betterments, reserves and sundries | 47,494,754 | 2.00 | 2.07 | 1.50 |
| Surplus | 48,384,864 | 2.03 | 1.09 | 1.07 |
| Total (gross earnings) | $2,375,141,766 | 100.00 | 100.00 | 100.00 |
| Gross earnings 1908 | 2,393,805,989 | |||
| Gross earnings 1907 | 2,589,105,578 | |||
| (a) Legal expenses, advertising and insurance are included under "Miscellaneous"; stationery and printing under "Material and Supplies." | ||||
| (b) Includes taxes paid by leased lines and deducted from rent. | ||||