Omaha daily bee., 1889-10-01
A DISCOURSE ON RAILROADS.
Report of the Commissioner to the
Secretary of the Interior.
MUCH FoResTALLINe.
Every Line in the qhost and North
west Trying to Cover All the
Territory-Suggcsted
Remedies.


WASHINGTON, Sept. 90.--Horace a. Taylor,
commissioner Of railroads, has filed with tho
secretary Of the interior the annual report of
the operations of his bureau for the fiscal
year ended June 30, 1889 The commissioner
discusses the railroad situation in the west
and northwest aud makes some suggestions
as TO existing evils and their remedies as
well as some recommendations as to the nee
essary legislation in order to better protect
the'interests Of the government and to rem
der the operations of his bureau of more
practical Importance.
The commissioner says there had been no
inspections and no examinations of the books
and accounts of railroads subject to the
supervision OF bis bureau made for the cur
rent year, and covered by this report previ-
ous to his appointment as commissioner July
II, 1889 He Is, therefore, unable TO make
the report as full and complete as it other
wise might have been. Since his appoint
ment, however, the examination of several
railroads in which the government has u
pecuniary interest has been made.
The total liability OF the Union Pacific to
the government June 80, 1889, was S5l, ,2d9, ~.
The excess of interest paid by the United
, States over all credits amounts to 7,13O,2SO.
The total liability of the company was sos
526, l59 The assets amounted TO S2l53O4 '23.
The liability of the Central Pacific TO the
government was So, ,256, f3i; excess OF inter
est paid by the United States over credits,
So4 40l, ,054. The total deOt of the company
was Sl25, ,296, 165, and the capital stock $685.
900 The assets amounted to s222 f51,-
362 There was Il net decrease in the assets
during the year of S132, ,S35. The sinking
funds of the Union Pacific and Central
Pacific companies held by the secretary of
the treasury amount to Sl3,5l4,6O4.
The Sioux City IL Pacific railroad received
bonds from the United States amounting to
miles. The interest paid by the United
States amounts to s., $50, ,402 and there has
been retained by the treasury on account OF
transportation services, 800, leaving the
aggregate amount due the government,
S3,525,3O3. The excess of interest paid by
the United States over credits is Sl,S95,9o3.
7 he subsidized portion of the central branch
of the Union PBcilc received bonds to the
amount of 81, 600. 900. The aggregate debt to
the government at the end OF the fiscal year
amounts to 81, 354, 762; excess of interest paid
over credits 81, ia, ,io|.
In regard to the railroad situation in the
, west the commissioner says: Repeated and
ruinous rate destructive alike to the
Interests of the railroads and the shipping
: public, have prevailed to an alarming extent
throughout the west in recent years. The
unparalleled development Of the vast re-
sources of the western states and territories
has attracted capital there, and the railroads
have opened inviting fields to investors AS
, a result railroad building has been carried
on far in advance of the needs of
the country. Parallel lines and unproductive
feeders have been constructed and expensive
terminal facilities With the opening of
nearly every through line complications have
arisen and competition has been stimulated
TO the point of anulhilatlng profits and often
producing rCinous losses. That unwise or
perverse management subverts legitimate
and healthful competition INTO unre0sOning
and destructive warfare s not infrequently
plainly apparent but knowledge of this fact
brings no relief to the lessening revenues of
warning companies. These rate wars are in
many, if not most cases devoid of Dalliation
or excuse, naugurated without reasonable
cause and vindctively prosecuted with utter
disregard of their disastrous effects upon the
interests of the companies engaged and the
business public They destroy or imperil the
value of railroad securities, impose unjust
burdens upon the commerce of competing
sections, prevent stability in business and
render tho profits OF producer and trader
alike uncertain
~ do not agree with the claim so persist
emily made by railroad managers and their
organs and satellites that the recent losses
sustained in the railroad business are plainly
due to the restrictive laws which have OF
late been enacted by congress and in many
of the western states In some states, nota-
ably in iowa, it Is undoubtedly true that
laws have been enacted which are unjust to
1.-The railroads and injurious to public interests
and which ought to be speedily modified or
repealed. o,o,.o.,, g..
Of railway traffic within the states has been
wisely conservative and was as surely de-
lnanded for the protection of the public
against unjust charges and Determinations
In local trade as was the interstate com
merce law TO protect commerce between the
states. The theory that the recognized laws
of trade would ultimately so far prevail as
10 sufficiently regulate the management OF
railroads in the interests of the public has
not proved to be correct one. Events have
demonstrated that these laws have become
practically imperative, and that it is neces-
sary TO invoke legislation to supplement the
operation of natural laws esta blishing legiti.
mate rights and curbing the unwarranted
pretensons OF transportation companies.
'!1hc exceedingly unfortunate situation
which has of late prevailed in the west aud
northwest presents vivid illustration and
gives an expensive, though apparently un-
needed lesson as TO the effect of unregulated
Scompetitien Uniess conditions are changed
Through the voluntary actions of the rail-
road companies or by legislative interference
,commercial relations will be seriously dis
turbed and lasting injuries inflicted upon
railroads und upon every department ol
trade
a. ~ believe that in many sections of the
west, copspjcuously in the states of Iowa and
Kansas; the mileage of the railroads is
greatly in excess of tho legitimate needs OF
;, the carrying trahe. If this be true, then
many investments in railroad properties
thero must fail to yield remunerative divi-
dends or the schedules of rates must he fixed
go high as to prove runously burdensome to
trafic For this unfortunate condition OF
! affairs, neither the people nor the railroad
companesiare wholly to blame. Both have
contributed to bring il about. The people
have, encouraged railroad construction
wherever IL could be secured, regardless OF
existing necessities or future complications,
land railroad companies have been unduly
eager to control trade by building new lines,
and feeders for established ones, where the
volume of traffic was not sufficient 10 sup
port.them. This condition Of things presents
problem difficult of solution. II is safe to
say that the remedy does not lie in the levy
ing of extortlonate charges or the waglug OF
RECKLESS rate wars.
'',fhe security of the railway system lies in
administering 1t with careful respect to JUS
tice and the public welfare If its oppressive
hand Is laid too heavily upon the people, re-
venge and revolt will be sure TO follow
, 'sIf investors in railroad properties have
expended their capital IN the construction of
dimes not demanded by the present trade,
then they must share the fate of all who In-
vest in unproductlve enterprises. Relief can
" ONLY come through increased settlement,
stimulating business and developing natural
resources
Both the interests of the railroads aud the
lpublic, says the commissioner, suffer from
the fact that railroad managers devote their
energies too largely TO securing trade from
competing centers, and do not sufficiently
encourage the development of local traffic.
The commissioner dwells at length ON the