The railways having been paid, for the month selected, $770,679.16 in excess of the sum resulting from the above calculation, the Postmaster-General assumed that this excess over expenses and taxes plus six per cent. constituted excessive profit for that month. He multiplied this assumed excess by twelve to get his estimate of annual excess and stated the result, in round figures, as "about $9,000,000." The mere statement of this method discloses the fact that it makes no allowance for any return upon the fair value of the railway property employed in the service of the public. This omission is, of itself, sufficient wholly to destroy the Postmaster-General's conclusion. Everyone recognizes that a railway is entitled to at least a reasonable return upon the value of its property devoted to the public service. The Postmaster-General ignored this universally accepted principle and adopted a theory which, if applied to the general business of the companies, would render substantially every mile of railway in the United States immediately and hopelessly bankrupt. The recently published report of the Interstate Commerce Commission on the railway statistics of the year that ended with June 30, 1910, contains data by which this statement is easily demonstrated, as follows: Operating expenses of all United States railways, for the year $1,822,630,433 Taxes of all United States railways, for the year 103,795,701 -------------- Total $1,926,426,134 Six per cent. of above total 115,585,568 -------------- Total gross receipts permitted by Postmaster-General's plan $2,042,011,702 But if this plan had been in force, the railways would have had, for interest on mortgage bonds, a reasonable surplus as a margin of safety, dividends on stocks, unprofitable but necessary permanent improvements,[A] rents of leased properties, etc., etc., only the six per cent. or $115,585,568. This figure may be compared with the following, among others: Interest obligations (on funded debt only) of all United States railways, for the same year $370,092,222 Rentals of leased properties, all United States railways, for the same year $133,881,409