The morning call., 1892-09-20
Cosr OF RAILROADS.

We publish below what the Rural Press
of this city says respecting the railroad Sit
uaton:
The break up Of the TTanseontinental Traffic
ssociatiOn seems complete. The withdrawal
Of the Great Northern two weeks ago has been
followed by that of The Canadian Pacific and
Northern Pacific. leaving only the allied lines OF
the Union and Southern Pacific TO work In har-
mony. The dispatches predict q general ''rate
war;" but this seems as unlikely as Ii is really
uDdesi rable. Rate wars unsetile values and de-
moralize business, and in the nature OF things
force The roads into new combinations. Such
contests have no sort of correspondence TO otdi-
nary bealthful competitions; but on Inc con-
irary lead inevitably TO destruction Nhat IS
desired is not fight among the iIanscontinen'al
roads but independent. reasonable ana persist
ent competition. IL locks as II The day OF this
sort CT thing were dawnlng at last. Aud II looks,
further as II the new order OF things would 60
hard with The old lines. All OF these lines are
vastly oyer-capitaliZed. Their stocks or bonds
or whatever combination OF these securities
stands representative Of The properties, aggre-
gate from TWO 10 four times the actual value OF
the several roads. That is 1t would be possible
at this time TO duplicate the older roads, III all
details complete, for tIom one-hali 10 one-fonIth
Of their present capitalization. The excess cap
Utilization stands for extravaganza in the origi-
nal constr uction for mistakes in engineering, Tor
mismanagement In building or leasing connect
ing lines for the difference Ia the cost of odtime
and modern methods OF construction. and very
largely for direct and criminal injections OF
water" Roads built in extrayagant times
and by wasteful methods have been ana
are sill managed wastefully. Each of them
maintains large very extensive and worse
than useless organization OF official "magnates,"
whose time and energies are devoted not TO the
practical and useful business OF operating the
road, but 10 speculative and political projects
which are profit able only to themselves. Ii is
the necessity of finding dividends for this excess
capitalization and of supporting these enormous
and iegitmaie charges OF management that
lies back OF be avy freight rates and OF combina-
lions TO maintain them
The real cause OF the break up OF The Traffic
Association IS prospective competition for
through fTelghts By The Great Northern. or, rs IL
is called. the Jim HIP road. This line, which
before the close of the year Will be In operation
between st. Paul and Puget Sound, is a novelty
in the railroad world. 1t has been built without
subsidy, without any sort OF "aid," and without
any sort OF fuss. There have been no construe-
tiOn rings, no costly Hobbies at Washington or
elsewhere, DO raft OF high-sala ana useless
officials. Mr.. Hi has employed The best engt-
ueess. and has built the line with the same close
business-lke, economical attention 10 details
that prudent business man would give 10 the
construction OF building. He has learned from
the mistakes Of others, and has avoided much
that adds TO their charges of operation. The re-
suit OF all this Is that Mr.. Hi and his hackers
have a new and perfectly equipped trsnseont-
mental road shorter by 800 miles than the
Northern Pacific, with easier curves and better
grades than any of the other lines, and, with all
costs paid, representing Ii capitalization less
than one-half that of the Northern Pacific and
about one-fourth thar OF lie Union Pacific. This
Is The situation which causes Mr. Hill 10 part
company with the other transeOn:inental roads.
This Is the situation which enables him 10 say,
as lie Is quoted, that transeontinental freight
rates can be reduced one-half and still leave
handsome margin of profit