New-York tribune., 1874-09-07
THE RAILROAD WAR.
ARGUMENTS FOR STATE SUPERVISION OF
RAILROADS.


MoBuIER OPERATI0Ns-REPLY OF THE RAIL-
ROAD COMPANIES TO THE CHARGES OF THE
FARMERS.
(FRoM THE SPECIAL CORRESPONDENT oP TIE TRIBUNE.I
MADISON Wis, Aug S-The Potter Railroad law
OF Wisconsin cOnfers on the Railroad Commission IL
creates very few judicial or executive powers The
general classification of the roads and the rates OF
fare and freight are fixed by the act ITSELF and are
i'm no degree within the control of the Commission,
as they are in some other States. The most impOr-
tant duty the Commission has TO perform therefore,
is TO gather statistics and information touch
ing the railroads of the State for the
guidance of future Legislatures. The four points
on which they are directed especially to re-
port are First the actual cost of each railroad
in the State up to the close of the year 1878 !;
secondly, the gross receipts of each railroad COM
pany in the State thirdly the total net earnings of
each company. aud fourthly, the total nterest-bear
ing Indebtedness of each railroad company in the
State. Very little of this work has yet been done,
as the numerous suits In which the State has been
involved by the railroad companies have occupied
much of the time of the Commission. Their report,
which will be ready for the next Legislature, will
it is expected, be valuable addition to the rapidly
accumulating railroad literature of the West.
WISCONSIN RAILROAD MANAGEMENT.
In the mean time, so much has been said about the
management of the railroads of this State in the
interest of the directors and of inside rings, and
not in the interest of the stockholders and the
owners of their bonds that have attempted to col
lect from such documents as are accessible few
leading facts illustrative of the system by which,
especially the Granger" roads, they called,
are run. l begin with the Chicago and North
Western Road. The last annual report of
this Company that 1 have been able to
see is for the fiscal year ending May 81,
1878. At that time the total amount of
capital of the Company, represented by stock
and bonds was SCI 100000, or an average of more
than $4,000 for every mile of road owned. The
gross earnings of the road for the same year
amounted to nearly S13,OOO,OOO and the operating
expenses to nearly SSOOOOOO. Out of their net earn
iugs for the year, the Company also paid for taxes
and for renewals and expenses occasioned by the
Chicago fire more than 100000, reducing the sur
plus TO about S4500OO0 or u per cent on the total
amount of its stock and bonds. Now, what was
done with this money In the first place, the inter
est the bonds of the road amounted to S135OOOO,
aud the Company paid dividend of per cent on
all preferred stock and of 81 per cent on all common
stock which used up more than S2,OO0,OO0 OF the
remainder 8, 100000 was paid for the rental of
leased roads in Iowa. and SSSOO0 put into the sink
ing fund, leaving still S165,OOO. The Northwestern
Company owns four roads, the operations of
which are not included in the above statement.
The first is the Winona and st. Peter, extending.
in Minnesota from Winona on the Mississippi River
west to Lake Kampeska in Dakota Territory. 326
miles all that part of this road west of New-Ulm,
OF more than $50 miles, extends through country
SO sparsely settled that it is doubtful if it pays op
Grating expenses. The other three lines not in
cluded in the general statement are the La Crosse
Trempeleau and Prescott the WinOna MankatO and
New-Ulm, and the Iowa Midland. / am unable to
find what the gross earnings and operating expenses
of these roads for the year ending May 81 1878;
but during the previous year, when one of them at
least did not extend far out into the wilderness
of Dakota and therefore less expensive to oper-
ate altogether they did not enough to pay
ming expenses taxes and the interest on their
bonds by about S315OOO The only one of the
four that did produce any net income was
the La Crosse, Trempeeau and Prescott Road,
and that is the only one of the four
that is in Wisconsin. The people Of Wisconsin
believe that the managers of the great railroads
in this State part of the money earned by their
lines here TO support lines which do not support
themselves in Minnesota and Iowa, and that they
are therefore, taxed, by the consequent increased
rates they pay. to keep out of bankruptcy Western
roads in which they have no interest This belief
seems to me to be well sustained by the facts.
The Winona and St. Peter Road is one of the
Minnesota lines owned by the Chicago and North
Western Company. The last number of POOrs
Manual gives the total cost and equipment of this
road at S1014S402 and its net earnings at Sl42407,
or about IL per cent on its nominal cost and
equipment. The Minnesota Railroad Commissioners
report which brings the history of this road down
to Aug 81, 1873 states its stock, bonds and other
debts at about S1O,6OO,OOO. This Company received
ad hv tha ty ot
900 acres some of which has already been sold
at about SO 50 an acre. One hundred and five miles
of this road were purchased by the Winona and st.
Peter Company on the following terms: The Com
pany assumed first mortgage the line that had
already been given for money advanced amounting to
$4,000 mile; gave a new mortgage of $4,000
mile gave $4,000 worth of stock, al par value and
released all titles to lands earned under the grant
by the construction of the road That is the nomi-
nal cost of the road was about $4,000 mile beside
the 100000 acres of land. Now the Northwestern
Company acquires this road with all it's incum-
brances and it's comparatively small earnings. An
other of the Minnesota roads owned by the Chicago
aud North Western Company is the Winona, Manka-
to and New Ulm. find that at the date OF the last re-
port the capital stock and debt of this road amounted
to S4s6SS mile, and its gross earnings S1,273 mile
less than it's operating expenses without providing
for the interest its bonds any dividend on its
stock.
said that S1OOO,OOO were paid by the Chicago
and Northwestern Company as rental of leased
roads in Iowa. These were the Chicago Iowa and
Nebraska, and the Cedar Rapids and Missouri River
roads The gross earnings and operating expenses of
these two roads included in the general statement
of the Chicago and North Western Company, but are
nowhere that can find separately reported. In the
report of the previous year, howeves, find that
both of these roads and the Iowa Midland all three
did not earn enough above operating expenses to
pay the rental of the first two. l find that Poors
Manual reports the stock and bonds of the Cedar
Rapids and Missouri River Road at over $11, ,2S4 900,