The evening telegraph. [volume] (Philadelphia [Pa.]) 1864-1918, 1871-06-10
THE RAILROAD LEASE.
Speech by General President weic


the New Jersey Railroad and Transportation
Company, held at Jersey City, June 8, 1871,
Ashbel Welch, Esq, the General President lof
the consolidated companies, being called upon,
spoke as follows
Genttenaen:-As you already know, negotis-
tion has been made with the Pennsylvania Rail
road Company for the lease TO them of your
canal, railroads, property, and franchises for
800 years, at such rent as will give you
clear annual dividend of ten per cent. on your
stock.
The acceptance or rejection of this offer be-
longs, not to your representatives, but to you
alone. have, therefore, aided in the prepara-
tions to bring the question before you, as we'll
as in securing such provisions as most efectu-
ally to protect your interests; scrupulously
avoiding, myself, as far as possible preventing
in others, any action or public expression tend
ing to take the decision out of your hands. l
have also advised officers and employees not to
mingle in the conflict about the lease, since it
has come before the stockholders; as any hos
tility incurred by them as partsans impairs their
usefulness as officers.
When it was proposed that the Board of Direc-
tors should express their opinion in favor of
the lease, opposed it-partly because l thought
the property worth more than we were to get
for it, and partly because thought it was not
holders only.
therefore take this occasion to say few
words about the policy which the present ad-
ministraticn has pursued since the consolidation
of these companies.
This policy has been to make the avenues of
traffic between the two great cities of this con-
tinent-the main trunk through which the
traffic of the South and Southwest seeks the
commercial metropolis-fully adequate to their
purpose; to make them perform all the duties
of their location, to do this at the least posi-
BILE expense; to end the thirty years war be-
tween some of the companies and the public;
to guard against competition, or to make com
petition harmless, by the suficiency and supe-
riority of our facilities, and the moderation of
our rates, and consequent increase of business;
and to continue to show that, If corporations
have no souls, they may have integrity and
honor; and by all these means to add greatly to
the amount, and especially to the certainty, of
your dividends
OF course the increase of facilities required
large increase of investment. This was not
only wise, but unavoidable. Our railroads were
calculated for small high-priced business, and
in that state of things the threatened competi-
ton, prevented only by our improvements,
would have been ruinous. The aim was to pre-
pare for and develop heavy business which
could be but little affected by competition.
Though our increase of investment is so great,
though some of the expenditures have not yet
had time to become productive, though the
work and materials used in the maintenance
and operation of our roads have been from
60 to 80 per cent. higher than before the war,
though the public demands for more luxurious
accommodations have added greatly to our
expenses, and though many of the rates have
been very much reduced, yet the per-
centage of profits now made on the
whole enlarged investment of our four
companies is not greatly different from the
percentage on the former small investment.
The greater proportion of stock receiving ten
per cent, to debt receiving six per cent, and
the great increase of taxation, the gold pre-
miums, etc., have prevented this equality from
appearing in the dividend fund. The United
States taxes since the consolidation have ave-
ragged something like one-and-a-half per cent.
on our stock more than they probably will here
after; and our works, run down at the close of
the war, are now In better condition than ever
before.
Our railroads have never been calculated for
heavy freight tonnage. Yet 1t is upon such
tonnage, carried in large quantities, at low
rates, and small profits per ton, that the most
prosperous roads make their gains; and 1t is
upon such that ours must mainly rely hereafter.
The net profits of the Pennsylvania Railroad
Company In 1869 were more than three times as
much per mile run of trains with freight as with
passengers. Their profit for the year was nine
times as much on freight as on passengers; ours
only two-thirds as much on freight as on pas
sengers.
A fully developed business on our roads would
doubtless differ in its proportions from that on
the Pennsylvania Railroad, but it would differ
still more from the present business. Why
have we missed this important and, in oul
future, all-essental branch of traffic? Because
We have not yet fully expiated the errors o.
youth.
When the companies were consolidated, anC
their mutual jealousies were no longer in the
way, we found the transit duties which in the
early inexperience of railroad legislation ant
railroad management had been laid upon us,
legal prohibition of heavy freight traffic Tt
do such work cheaply, expensive preparation
must be made, and large quantities carried; tt
get large quantities, rates must he low But a:
the law stood, every cent of profit, at rates no
very unusually low, would have been paid to tn,
State in transit duties.
AS soon as we succeeded in getting that PERM
cious system abolished In the spring of 1869
we endeavored to stimulate cheap freight, ant
succeeded in 1870 In more than doubling tn
way tonnage; 1t being in 1868, $4,000 TONS auC
In 1870, o65, 900 tons; or, including coal, grea
deal more. In the four years since the consoli
dation the whole tonnage has been trebed.
But one difficulty remains. A large part O
this heavy tonnage seeks the shores of tn
Hudson river. Much of it ought to remain o.