New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-08-02
THE FARMERS AND THE RAILROADS..


The railroad problem, as the Western legis-
latcls view it, has an Unexpectedly prompt il
lustration in the annual report of the Chicago
and Northwestern, whose president, it will be
remembered, was one of those who declined to
state in Chicago interviews that everything
was going to the dogs. His report criticises
most earnestly the recent legislation and orders
of commissioners in Minnesota, Iowa and other
States af1irms that in Minnesota the Supreme
Court ordered obedience "where the udis-
puted record before it showed an actual spoa-
ton of the property; that the Iowa situation
was substantially the same and that if losses
should result from enforced Improbable rates
the company would have no redress because
States could not be sued. These statements
present a strong case for the company all will
admit But what have been the financial re-
suits for the year?
The gross earnings for the year were
80 $3.50 = So 81, and after paying all interest
due and requirements of sinking funds and
dividends on both preferred and common
stock the company had left to its credit a
balance of S622, oil SO. The company in
creased its mileage during the year by build
ing forty miles of new railroad, and added
81 ,688 900 to its bonded debt. IF its business
was Improbable or likely to become unprofit-
able, the company was not very well advised
in adding more debt and more road to be
operated. But up to the close of the fiscal year
ending May 81 it not only earned interest on
all it's Indebtedness, but dividends for both
classes of stocks, and a surplus sufficient TO
pay per cent more on the common stock if 10
had been thought judiciOus. Moreover, tho
common stock has for several years ranged in
the market above par, indicating that the hold
ers, notwithstanding all unfavorable legisa-
ton, have been and are confident Of receiving
something more than the average return on the
money invested.
President Hughitt's point of view Is that the
company ought to be able to earn great deal
more than it does earn, and that enactments
which have the effect thus far of leaving tho
company with sufficient income to pay COM
Portable dividends and maintain its stock above
par are nevertheless acts of spoliation. That
is true, moreover, if the operations in one or
more States are rendered Improbable by the
laws of those States even though the profits
realized on operations in other States are large
enough to maintain dividends. But the West
ern farmers and legislators find it difficult to
regard the matter in that light. They see a
powerful corporation collecting a revenue of
over 50 5, 900, 900 year, which suffices to pay
all expenses and satisfactory return on bonds
and stocks, and even on the common stock
sufficient to keep it above par, and they see
moreover, that the company is cOnfdent.enough
of its future to borrow money at the rate of
$4,000 per mile for the building and equip
ment of more railroad lines. They reason that
if losses have been sustained on any part of the
business during the last year, they have been
in consequence of competition with other
roads which bond and stock holders have char
acteIized as reckless and foolish
When the case is seen just as Western egis-
lators see it, their action cannot be regarded as
altogether strange. The farmers of Iowa do
not feel that their capital and labor are re-
munerated as well as the capital and labor of
this Transporting company. They are trying,
not as to methods always wisely or justly, to
equalize matters. Complaint does not move
them in the least. SO long as they see the COM