The true northerner. [volume] (Paw Paw, Mich.) 1855-1920, 1873-05-02
From the Benton IIarbor Palladium.
- UhOm the GOds Would OestTOy
yhey First MAKE .uad."

From the Benton Ilarbor Palladium.
Uhom the GOds Would DestTOy
yhey First Make .Udd.''
4 prominent railroad manager was heard the
other day to denounce in unmeasured terms
the action of Illinois farmers and others in
their contest with the railroads. lie said that
the effect OF the present railroad controversy
was TO prevent the investment OF capital IN
new roads, and that in his opinion there would
not be fifty miles OF new road built this year
In Michigan. he denounced the newspapers,
aud said every newspaper in the State took
sides against the roads. AS nearly az can be
recollected he used the following language:
There are not five railroads in the West
that are now paying dividends to the stock
holders. Local passengers.--by God, ought to
be charged five cents mile; and freight rates
should be raised IS per cent"
We presume this may be taken as fair e1-
preston Of the views Of the average railroad
manager. As such it possesses an importance
which should not be underestimated.
1t onght to be perceived by these men that
they stand no chance in serious contest for
the mastery between themselves and the public.
SO long as they keep within certain bounds, IN
deed, they can maintain their position; but
the effort to absorb al the money that is made
in the country Will prove too much even for
them
That the present controversy is deplorable
will be admitted as well by those who concede
its necessity as BY others. IL is probable that
it's immediate effect will be to discourage raul
road building, and the investment OF money
In new enterprises. To that extent 1t is no
doubt serious evi-and yet we hope for an
ultimate good result more than commensurate
with the evil.
We assert without fear OF contradiction, that,
great as is the outcry against the exactions Of
railroads. and unreasonable as some men may
be in what they say and do on the subject, the
public would be content to allow railroad COM
panies. managed upon business principles, to
make liberal profits upon the capital invested
profits 50 liberal that they would attract new
capital to like investments.
Nevertheless, the fact remains that very few
railroads pay dividends to stockholders, and
capital at present is rather repealed than at
tracted to new. investments, while the people
are discontented and business is disordered,
represslye legislation is talked OF, and trouble
generally results. Why is 1t?
In the first place, it is notorious that, in spite
OF the want Of prosperity among companies,
railroad mCadgers grow rich with fabulous
rapidly. They do not take money directly out
OF the Golfers Of the roads, perhaps, but they
so use the advantages OF their position as to
reap richer rewards than any other class of
business men.
Again. the stock of railroad companies is
largely, and we might almost say mostly, dcti-
tious. That is, it does not represent money
actually paid in. and expended IN the construc-
ton Of the road. The road is built with money
which 1t borrows. The bonds are sold below
par-suffciently so to more than cover the nom
inal cost Of the stock which goes with them
and which is only valuable as a means OF con-
trolling the road. Where the original stock
was sold at fair price, the stock dividends
issued have watered' the capital until dollar
OF the original investment is represented by
five or ten dollars OF stock. The whole fabric
is hollO,1. Dividends Of ten per cent. upon the
ordinary stock Of railroads generally would
represent enormous profits upon the original
investment. In order to pay such dividends it
is very probable that local traffic would have 70
be burdened with the high rates given above.
Those rates are extravagant. II can be
proved we presume, that it does not cost any
thing like that amount to carry passengers and
freight, and that present rates would suffice,
and more than suffice, on nearly all roads, to
pay reasonable dividend upon the actual cost
OF the road-provided the roads we're managed
on business principles, and stealage," excess
Two salaries to managers. and Losses from pre-
ventable accidents were cut off as far as possible.
Thero is leak in the freight business to
which we wish to call attention. That arises
from the inefficient manner in which freight is
handled on many roads; and no one road can
alone remedy the evil. The best freight rates
are obtained by so-called fast freight lines, :
which run cars on all roads, and connect through
from san Francisco to Portland, Boston. New
York and all eastern points. For the sake OF
the speed and dispatch which these lines furnish
they arc preferred by the public; while the
roads transmit their cars at the lowest rates.
The difference between what they pay the roads
and what the public pay them is very large, and
they absorb a large proportion of railroad prof
it's. There is no reason why railroads cannot
handle and carry ordinary freight as satisfacto-
rly as those companies, If they only 'oiH do it.
IL there were no difference in the service, the
public would not be long content TO pay an
aided charge for the sake Of being served by
the " fast freight lines"
Many Of the same considerations apply also
to The express business. There is no reason