Earnings

Cheerful financial news there was, last week, in September's railroad earnings report. Net income for Class 1 roads was estimated to be a swaggering $36,000,000, twice September 1937's $16,110,527, three times August's $10,053,000, six times September 1938's $6,276,573.

Principal surprise was that when gross operating revenue humped sharply (18.3%) since last year, expenses were kept down so well that nearly all of the increase in revenue was brought down to net operating income. Typical of this policy was New York Central, whose gross jumped $5,900,000 (from $25,800,000 to $31,700,000) compared with September 1938, while its net operating income jumped $4,100,000 (from $2,200,000 to $6,300,000). On the other hand Pennsylvania, which in September was already hard at work repairing down-at-heel freight cars (such repairs are charged to maintenance), had a $3,000,000 increase in various costs which held its net operating income down. Result: its net rose $3,000,000, its gross $8,300,000.

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