Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-02-25
THE WAR OF THE RAILROAD
KINGS,

by the plea that they ought |
to earn six per cent. on their capital in |
vested, or, in other words, earn enough |
to declare dividends on their stock. !
But when this stock is watered to two
or three times the real cost or value Of
the railroad property it represents, the
equity Of the above plea disappears.
In the present struggle between the
Pennsylvania Central and the Balti-
more and Ohio roads, it is worth re-
Numbering that the latter is the only
trunk line in the country which has
never increased its stock by way Of
dividends or any other swindhng de-
vice of Wall street. Its stock and its
capital are identical, representing
the actual cost Of its lines and
equipments. 1t pays dividends
on invested capital only; therefore 1t
can carry passengers and freight
cheaper than any of its rivals because
it has fewer dividends to pay. All the
other trunk roads to the North are
loaded with fictitious stock, on which
they have to pay interest as well as
first and second mortgages, and Wall
street only knows what else.
To compare the two giants now at
war, Tom Scott and John w. Garrett.
The former finds his Pennsylvania
stock swollen by various processes to
1880 900, on which enormous sum
he is expec ed to pay dividends to the
holders. Garrett, on the contrary, is
burdened with only SOC, 100000 of bona
fde stock, and therefore needs to earn,
over and above running expenses, less
than one-f0urth as much as his rival in
order to divide among the stockholders
the same per cent of profit. This ex-
plains how Garrett, besides paying his
dividends punctually, has managed to
lay by surplus fund of millions for
emergenci, ike the present, dull trade
and a struggle with rivals.
1t Will be rendered that Garrett was
the only railroad king who refused to
enter the Saratoga syndicate last sum-
mer, to force the rates of freights so
high that the roads would make as
much on the little business doing now
as they did IN other and prosperous
years; he was the only manager Of
trunk line who refused to enter this
conspiracy against Western and South
ern producers. He maintained his old
moderate rates, and in some respects
modified them to suit the times. In
doing so, he knew the danger he was
defying; he knew that Tom Scott, Van
derbilt and the rest would discriminate
against his read as much as possible,
through their Western connections.
But he felt equal to the
fight, and, approaching its nature, car
the war into Africa, by establishing
connections Of his own to Chicago, the
heart Of the grain and pork region.
The result we know; the Saratoga SYM
dicate vas knocked higher than kite.
Now Tom Scott, as the only member
Of the exploded syndicate in a position
to DO it, is put forward by his late CO.
couspirators to cut off Garrett from
New York. Scott also feels sore about
the way in which, while he has been
lobbying Congress, his Maryland rival
has diverted the oil trade and It's profits
from Philadelphia to Baltimore. Gar
rett has established temporary connec-
tions with New York, but the ultimate
aim of his policy is to make Baltimore
a second New York by multiplying its
lines of European steamers, for both
freight and passengers.
Such is the nature and animus of
the war now raging, whose echoes in
terest every railroad man in the coun-
try, and whose effects are witnessed far
beyond the scene-of original disturb.
ance. 1t threatens to become the most
stupendous struggle yet inaugurated,
and may ultimately involve nearly ev-
cry road in the West and Southwest on
one side or the other. The,result is
dubious. Scott is probably backed by
Erie and the New York Central, but
the amount of support they can afford
to give him, if any, is predetermined.
Garrett has hitherto conducted his bus
mess on the soundest business princi-
pies, and being the only trunk-manager
in the country who has done SO, and
stood for the people against oppressive
combinations, he commands the sym
pathies Of West and South. He is less
hampered thanlScott, and his surplus
fund gives him a reserve force more
powerful than any promises to pay
which Scott may hawk in markets
where they are now worth but forty