New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1869-02-04

most dstermned that IL is essentially necessary for
the well being of the Irish population that the Gov
eminent should purchase the whOle OF the existing
lines and take the working of them into its own hands
On comparing the statistics OF the value OF the pas
senger traffic of the year lo66 with That OF the year
1865 we find that while on the English lines there
was an increase of fG49S5, and on tho Scotch lines
an increase of 97514 there was an actual decrease
ON the Irish lines of f4l156 The stocks of all the
Irish railways are quoted at a discount; very few of
them paw even moderate dividend, two pay only
fractional one ten just manage to pay their debe-
ture interest but pay no dividend at all to the ordi
nary stockholders six are even unable to pay the IN
terest their preference stock and debentues two
utterly bankrupt, and two have ceased working
altogether
The gross earnings of the 14.247 miles of British
railway during the year 1867 amounted to flI935,64
for the passenger traffic. and f2 365 for the goods
traffic, making total of gross receipts OF t3g49g9
But the working expenses amounted to tl9,SiS,93S,
slightly exceeding 80 per cent of the gross receipts
This leaves the net profits fl9631O 7 or at the rate
of 3.9l per cent on the outlay of capital. =,
of railway were eli S5 95 for passenger traffic and
600 429 for goods traic-total of gross receipts.
9SS 1G354. The working expenses in this year were
G1SSl167S about 4Sh per cent of the gross receipts
This leaves the net profits for 1866 tl2S526o OF az
the rate of 4O1 per cent on the outlay of capital
On comparing these two statements we 5 Iu Ina,
there in 1866 that the IN crease OF gross receipts
in 1867 was S56i5 but the increase III the working
expenses was Ct 03 go thus leaving net increase
of profit of only f2S9G6, about q per cent Oh inc
increase of the gross receipts. However, as the
working expenses only absorb so cent OF the gross
receipts the net increase of profit should have Deen
f657 500 Hence we arrive at the conclusion that the
working of the railway system OF Great Britain
during the year 1861 so far from eXhioltlnga pro
gressive increase actually shows relative decrease
of net profits amounting TO f319,456, as compared
with the year 1866; the working expenses beng ~
per cent higher, and the rate of dividend fracionay
lower. ..u
But as nearly one half of the gross capital OF tho
railways has been raised on preference ana 1oatihg
debentures, bearing preferential ana hlSt mort
Gin =
which interest would absorb El25OOOOO out OF tho
fi9 G31 O47 net profits. the ordinary shareholders
would only have f7l3l 0i7 to divide among them
or about 24-5 per cont; and this average dividend
would be much smaller but for the prosperous con
dtion Of the two or three large lines already men
toned. The English Government funds pay nearly
3! per cent interest, and quoted Mt ~ per cent
We believe these discOuraging results are to be
attributed to too large preference capital the IN
cumbrance of an unweldy floating debt, q too ex-
pensive rate of speed generally maintained, the use
of an unnecessary amount OF rolling STOCK ana con-
seouent excessive wear and tear, not only OF the
rolling stock, but also of the permanent way; the
enormous cost of construction, and the very hlgh
scale of fares generally in vogue throughout the
country.
railways in Prussia is $4,000; in Belgium, GlSOOG In
Austria 500 900; in France, $4,000 and In England,
$4,000. We have not introduced the average cost
parisOn in much as the peculiar ana easy cOhdi-
tons under which the companies obtained Their
lands from the Government of the United States
places them in a different category altogether. The
enormous cost of construction of railways IN Eng
land is no doubt largely due to the exceedingly high
value of land in that country, and the consequent
heavy sums for compensation winch the companies
have had to pay to the owners OF the land through
which their lines pass But II Is an undSpGteu lact
instances perfectly fabulous aud such as could not
| now be possibly obtained. The frightful robberes
perpetrated under the head OF IarIlamenIary cN-
| penses, and the immense sums Of money which the
| contractors for making the lines were invariably
dllOued to realize, also greatly contributed 10 swell
II fora
| who were few in number at the time the principal
lines of railway made seem to have been mixed
up in sort of general partnership and they were not
then likely to underbid one another in making esti-
| mates; that If any particular company should
have ventured to refuse contractors estimate as
excessive, they would find themselves under the ne
| cessty of accepting equally high one from some
other who, in all probability would have sort OF
secret understanding or partnership with the very
| contractor whose estimate they had refused.
It is calculated that the British railway system
might be duplicated at lthe present day for one half
of its original cost This fact alone cOnronts the
railway companies with future poverty II not future
ruin not only those who are already struggling with
adversely, but even those who are now enjoying "A
| certain measure OF prosperity. .
| The gross outlay Of capital expended on the rail
| WAYS of Great Britain Is over t5OO,OOO,OOO. what
the net amount may be, after deducting parliament
tary and promoters expenses. and the usual sealngs.
it is impossible TO say Nearly one half OF this sum
has been raised either in preference capital bearing
an average preferential rate of interest OF per cent
in floating debentures payable IN three. live. ana
seven years Tedeemabe by the Companies at par at
the periods bearing first mortgage interest OF
from TO per cent according 10 the credit and re-
sponsbility of the borrowers. IL appears then that
the entire capital both ordinary and preference,
must earn net income Of u per cent TO pay me
per cent interest the preference capital and float
ing debt before the ordinary stockholders can touch
farthing of the profits arising from the working OF
the railway. Now If the railways should be all du-
plicated at half the original cost, contingency
which is already a subject of earnest consideration,
and which has, in one or two notable instances been
actually proposed to Parliament, the new or dup.
cate lines would carry all kinds OF traffic at one bali
the rates now current. This active competition
would necessarily compel the old lines to lower their
transit charges half in order to share of
the general business. But this reduced scale OF fares
would necessitate their carrying precisely twice the
amount of traffic that they had formerly done, IN
order to pay the pay cent interest on their pref
erence capital and floating debt; and this at the
very moment that they would be likely, at first, to
carry only one half as muct by reason OF the com
petition of the lines In fact, the original stock
holders would not only receive no income but would
be accommodating deferred liability against them
selves in the shape of OF interest due 10 the
preference capital and debenture holders, to the ex-
tent of 3. per cent, per annum.
Ii is true that duplicate lines have yet been
structed but it is not to be expected that the British
nation, having committed itself to the great prnci-
pies of Free Trade, will consent much longer TO pay
twice the necessary amount of transit money for
travelling for the sake of bOlsterng up number Of
insolvent companies. Either the old railway COM
panes must take bold STEP and be content to sacri
flee half their property by lowering their tariff OF
fares to half its present rate, and so save the re-
mander, or they must expect shortly TO find dupli-
cate lines competing with them in all directions.
But surely it would be wiser policy on their part
to at once adopt low tariff and suppress COMPETE
ton before it gathers strength and content them
selves with securing half the amount of profit on the
amount of business, rather than 10 wait till
competition allows them only one half of the
ratio of profit on one half Of the same amount Of
business.
But is il at all certain that reduction of 50per cent
in the scale of fares would produce corresponding
reduction of so per cent in their net profits, or,
considering the recuperative tendencies of cheap
fares that their property would eventually DO at an
deprecated in value. In Belgium, where tho policy