Weekly expositor. (Brockway Centre, Mich.) 1882-1894, 1883-05-03
MICHIGAN RAILROAD LEGISLATION
What Leading Journal Says of Il.
The Fear ola stroke at Many Of the
Industrial Enterprises and
Drawback Of the De-
veiOpment Of the
state.


velOpment Of the
State.
From the New York Commercial Advertiser
whose standing as one Of the leading fiuanca
papers of the east, is well understood, we clil
the following relative TO the railroad Legislation
now under consideration at Lansing:
Michigan, so long noted for her conservatism
and the encouragement she gave railwa,
enterprises, has lately succumbed to thu
crusade against the corporations, and III
progress is watched with the keenest interest
The capital invested here in railway property
has not as rule proved remunerative to tn,
investors or all the roads organized under
the general railroad law' during the last
twelve years, and not leased TO either the Mich
igan Central or Lake Shore Companies, there
are but few which have not gone through In
solvency. The only exception Is, perhaps, the
Grand Rapids and Indiana Road, the interes,
on whose bonds to large extent has been
guaranteed by the Pennsylvania Railroad. The
leased lines of the Michigan Central and
Lake Shore Companies have proven for
years an onerous burden TO the les
sees, and II is only within the last two or three
years that they have become, even 10 q moder-
ate extent, sef-sustaining. The Detroit and
Milwaukee road has been foreclosed twice: the
Boston capital, has been forecloscd once the
bonded debt having been scaled down 50 per
cent, and preferred stock issued in lieu there
of. In 1SS0, with fair traffic and fairly re-
munerative rates, that company was only able
to pay per cent. on its preferred stock, which
would amount to about 3 1-2 per cent. interest
on the original bonded debt. The average
| dividend earned by the Michigan Central, dur
ing the eight years ending December 81, 1881,
| was but 2.S5 per annum To the above list ],
| for nITaauN 1.sAwa ha h
dale and Southwestern; Fort Wayne, Jackson
and Saginaw; Finland Pere Marquette: Mich
| igan Air Line; Chicago and Michigan Lake
Shore; Marquette, Houghton and OntoDagon;
Detroit and Bay City, and Michigan Air Line
Eastern Division. 1t is safe to say that one
half the capital originally invested in railroads
In Michig An has been entirely lost to the in
vestors by foreclosure of mortgages.
glance at the map shows that this embraces
nearly all the roads in Michigan, except those
leased TO the Michigan Central or Lake Shore,
and the Grand Rapids and Indiana Railroads
In spite of all this the state has prospered
These roads, built by foreign capital, have
been instrumental In developing portions of
the State hitherto inaccessible affording an
outlet TO market for its wheat, salt and forest
products, and stimulating TO an unusual extent
its manufactures and the increased value
which they have given TO lands has proven an
immense source of wealth TO the State. The
State Itself is unusually prosperous, having
but small debt and large balance in ITS
treasury. The system OF taxing railroads ON
gross earnings. has been proven by experience
TO be the best, and 1t can be shown that no
other interest In Michigan pays as large por-
ton OF the taxes as the railroad companies
While the State has prospered railroads have
suffered, and the misfortunes of the latter
have heen due TO circumstances outside of the
control OF the Legislature or the people Poor
crops, the panic of 1873, and may other causes
which have tended TO depreciate the value Of
railroad property in the West during the last ten
years have all had their effect in bringing about
the disastrous results TO capital referred to-
During all these years, however, the Legisa.
ture OF the State has kept faith with the rail-
roads. There have been no unusually onerous
burdens thrown upon the latter, and no attempt
has been made TO regulate rates beyond that
they should be reasonable and without dis
elimination, and the policy of the State
through its Railroad Commission has been as
far as possible, to follow the Massachusetts,
Commission, in which the principal duty of the
Commission is TO reconcile seeming differences
between the railroads and the people, whose
interests should be and really are Identical and
by open, candid Investigations remove these
apparent differences between the people and
the corporations. The average rate PER ton
per mile received by all the roads in Michigan
In the year 1881 was / lilo cents, and the aver
age rate for passengers per mile 2-l0 cents,
showing conclusively that for cheapness OF
transportation the State of Michigan stands on
par with any and less than almost all of the other
states in the Union. This year, however, the
tendency of legislation seems to be In an op-
roste direction. Bills reducing passenger fares;
reducing and establishing freight rates un-
der general law applicable 10 all roads, on q
strictly mileage basis regardless of net earn
ings arbitrary classification of freights; fix
ing OF maximum rates regardless of the cost of
service-illustrate the character and tendency
of pending legislation which is being pressed
by no inconsiderable portion Of the Legsla-
ture. With an area of 56,457 square
miles, there is nearly one-half of the
State, namely, the upper peninsula and that
portion OF the lower peninsula north OF Sag!-
nav Bay, with very limited railroad facilities.
The people OF these portions of the State are
anxious for more roads, believing that they are
a necessity, and knowing full well the adyan-
tases such roads would be to them. How are
they to be built! There is not road in Michi-
gan to-day, with perhaps one or two minor ex-
ceptions, which is not controlled or which has
not been built by capital from outside of the
State. Can the people Of Michigan expect, II
hostile intention is shown by the Legislature,
ana the measures above referred to should be-
come laws, that capital will be disposed TO take
any additional risks in the Statel
The good faith OF the State, as hitherto
shown the railroads by holding them only to the
full and proper performance of their duties as
common carriers, has been an incentive to CAPT.
tai, and encouraged its investment in various
enterprises OF the State, although the return
might be and has been light. IL, however,
another policy should be pursued, would it not
inevitably result that capital will shrink from
and refuse TO become further involved in the
enterprises of State which, If such measures
and restrictions are put into effect, will cast
suspicion upon the good faith OF the State with
innocent investors whom it should cultivate
and offer inducements to.