The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-11-01

We informed that the New York and Erie aud New
York Central Railroads have settled their difficulties add
about to raise their for the transportation
freight II is high time they did For the last two
years they have been carrying freight for less than cost
II has the effect swell their gross receipts but the
increased net profits have been nothing This one Of
the deceptive atures # the New York Central Railroad
The belief almost universal the profits OF that road
actually increased from year year to tho time of the
consolidation and apparently up the present day. and
must continue to increase for many years to come This
Is mistake New YORK Central net receipts culmnsted
with the price Of the stock about the time Of the
sodaton From that time to this the stock has gradu-
ally settled down. and the net receipts have not in
creased dollar.
But, lest the statement that the Centrsps immense
eightng business has been done for nothing, may
attributed to " Wall street rascaty" we quote few
paragraphs from the State Engineers last report
The present depreciation in the railway interest may
be chiefly attributed TO the diminished rates Of fares and
the increased expenditure for operating and enlargng
the works.
The charges for transportation have been reduced to
the present low rates from mistaken opinion that 1t
necessary TO show TO the public large receipts TO ac
omphsh which It necessary to entsr into compe-
led to injurious extent in consequence Of the aia
ious statements of the expenses Of tansporon which
he published reports exhibited.
These reports by exaggeratng the net profits Of the
business have prevented the managers when they
discovered the error from increasing their charges 70
compromising rates. by the fear Of public opinion and
Upon any given line Of railroad there Is certain
amount of travel and freight which would any event.
be transported by 1t In preference to the Hnes
In almost every the capacity Of we'll equipped
single track road provided with frequent passing places
for the performapce Of this legitimate business which
If economically conducted, would yield the maximum
profit which could be earned and would in most be
ample to either an immediate easy profta
bic return for the investment.
To divert from other roads any Of this class Of business
requires reduction IN the charges which must
sary be extended further than merely to that portion
which Ia diverted and the rate Of cost of doing the
business cannot be materially diminished this reduction
in the charges Is taken directly from the net profits
and 1t therefore requires large increase Of business to
yield the same amount OF profit afforded before
any reduction In the charges was made This reduction
Is sometimes continued until profit whatever is
allied.
The rival road from which the business thus diverted
will reduce its charges for the purpose OF reclaim
ing its business and feelings of rivalry will thus be
gendered which will continue the competition until the
become evidently unremunerative that
lions must held to terminate the controversy and
tabsh equitable prices and conditions Each company
wn then only be restored to it's original position with
the disadvantage OF having in the meantime persuaded
the public that the lowest prices we're sufficiently remu
nerative.
The alleged necessity Of showing large receipts sim ex
s and the attempt TO maintain the business diverted
from rival roads being abandoned, q competition with
the water lines is commenced for the transportation of
be maintained BY rates nearly quite as low as those
charged upon the lakes rivers and canals and too low
as will presently b. shown, to give fair remuneration
the cost Of railroad transportation could be deter
mined with tolerable accuracy by some disintereted
and official authority II would DO great step taken to-
wards the CORRECTION Of some Of tho most serious evils to
which allusion has been made.
The sophstry of the argument that II is the true
interest of the stockholders to increase receipts by carry
ing portion Of the business under is papabe
to merit discussion The public will always look with
dtrust upon the management which maintains 80 fala
ci0us q doctrine.
Thereturns the railroad corporations show continued
large additions every to the construction account of
crease Of cost during the past year is chiefly in
quence Of extension OF the double track, larger
equipment and station facilities for the accommodation
Of the increased freight traffic.
The increase of the cost Of the road the New York
and Erie has been twenty per cent during the last two
years. and the Central II has been than twenty
Eve per cent during the same period.
The reported rings and net earnings Of these roads
have increased by much larger per centage than the
OF operating have increased by about the same per
centage as the ear rings.
The freight earnings have increased more than the pas
sepger earnings but the average receipts per ton per
mile have been less this year than the preceding one
especially the Central road although the rates Of
charges have been increased both roads, The average
receipts per ton per mile for the last year two and
half cents the Erie, and little than three
cents on the Central while the average the preceding
The freight tariff has been nearly alike each Of these
roads the last two years. Is therefore, evident that
than that Of the Central Of those articles which pay the
least and that the latter road has been performing
much larger proportion Of its business at low rates this
On comparing the reported receipts, expenses, and
business Of three principal freghting oads Il viii
be teen tn tho passenger business the Erie Ii
ported as giving net profit Of per cent with an ave-
charge and ceat passenger
mile on the Central net profit Of ~ per cent, and
charge Of and nine tenths cent and the Northern
railroad net pre6t Of two per cent with average
charge cents per passenger per
giving net profit Of 81 per cent, with average
charge Of two and six enths cents per ton per mile
the second profit Of 4s per cent, with average
charge Of three and tents CENTS and the third
profit Of "a per cent, with average charge Of
two and onefourth cents per ton per mio.
The character Of the business the grades and other
circumstances Of several roads do not furnish any
sufficient for these discrepancies.
The actual cost Of sportation upon railroads win
probably be actually determined from their re-
ports until they have been few years with the
construction account closed, and no money Dor
rowed.
The expenses of operating the road as stated the
ports about and quarter cent per ton per mile
On the Erie and and six tenths cent the Central
but before stated these reports do not show
ratey the cost of this service More reliable testimony
this subject is afforded by the recent action OF the
railroad conventions. At the one held at New York. EN-
bracpg the officers Of the four great lines between the
Atlantic and the West joint report was submitted by
the superintendents of the several roads, in wsh they
at which ordinary freight be carried TO pay interest
and expenses will average about two cents per ton
mile for heavy agricultural products three cents for
groceries and four cents for dry goods" AT subse
guent convention Of the railroad companies Of Ohio and
Indiana similar rates adopted
The above charges applied to the business Of our two
great lines would yield average Of little less than
three cents per ton per mile and would serve TO show
that some Of the business done each OF these roads
does not pay interest and expenses"
Sufficient information has been ELECTED from the raul
of this and other States from the actions Of the
conventions and from other sources Of information to
warrant the belief that considerable portion OF the
freightng business now done by railroads yields no
profit at the present rates. when due allowance made
for the increase Of capital which y requires for the In
creased and depreciation Of the works and for the
occupation a the track TO the injury Of the other bust
ness.
So much for the past II We look to the future
shah see that with the return Of the roads TO
ratve prices and the return Of prices Of produce 10 their
old standard, {he latter to round eights
win seek their natural channs-the Erie canal-espe.
ciay when enlarged that the local business BY
Of the cessation Of increae Of popuation-in
ties along the line actual decreasehas also reached
It's limit but most important Of ALL the competition Of
the great Southern route TO be opened within eighteen