New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-01-09
A GREAT RAILWAY SYSTEM.
QUESTIONS OF RATES AND CAPITAL.


and Financial Chronicle" of this city, pub
lished an interesting article on the capital in
crease of American and English railways. In
the investigation of this subject this newspaper
takes up the management Of the Pennsylvania
Railroad and considers the success Of its adj
ministration IL goes extensively into details
as to the increase of capital and the features
OF tho management It's comparisons OF the
methods pursued on the great English lines with
those which prevail on the Pennsylvania are
greatly to the advantage OF the American rail-
road. This article finds much to commend IN
the wise administration Of the trunk lines Se'l-
orally. and praises heartily the efficient ana
brilliant management of the Pennsylvania. Inc
article in full is as follows:
Public attention. both in Europe and America has
been recently directed to the continued Increase In
the capital account Of the larger railways OF the
United States. and exception thereto. We pro-
pose to investigate that subject and to do II chiefly
through an examination Of the Pennsylvania Railroad.
IT IS the leading railway In this country. and now
has stock outstanding to the amount OF nearly s127,-
100000. together with funded debt OF some S77.-
100000, making total capital account OF about
s30i. 100000
In Iss1 the shares and bonds Of the Pennsylvania
Railroad Company were about Si47. 900 OOO includ-
Ing the Sl0O00OOO OF collateral trust certificates AMI
5700O,000 Of share capital, which had been usec In
the purchase Of the stock OF the Philadelphia, VIII
mngton and Baltimore Railroad. The increase since
then represents the expenditure made for bettermcns
and Improvements upon the lines Of the Pennsylvania
Railroad Company, and also for the promotion OF
branch and tributary lines and the purchase and con
troll Of the securities OF branches and tributaries.
II will therefore be that during the ten years
which have elapsed since 1881 there has been an aver
age annual expenditure OF between 100000 and
So 900 for the purposes heretofore named This is
50 considerable that II Is not at all strange that
criticism has been directed to the fact first, that
while these large expenditures have been made. the
net earnings the company have not increased In the
same proportion or stated In another FORM that these
expenditures, which It js presumed have been made
for the purpose Of increasing the roads traffic and on
aLlln. It to be carried more cheaply and effectively
have not been reflected In proportionate reduction OF
the operating expenses: and second. that while the
investments in securities mado by the Pennsylvania
Railroad Company have increased from SsO.OOO.OOO IN
1891 about STA 900 In 1891. the Income there
from has not Increased In the same proportion.
Thee suggestions are so natural that they warrant
n careful examination into the actual facts. FIRST.
as 10 tho net earnings Of the company, the figures
show clearly that whils the gross and net earnings
per passenger per mile have varied but little In the
fen years referred TO- tho gross earnings on freight
Der ton per mile have fallen from about mills In
ISL 10 about mills in 1891. being reduction OF
about - per cont or on the mileage OF the Penn
sylvania Railroad division alone In 1891 an absolute
reduction in revenue OF nearly SloO0C0oO. The
expenses seemed 10 have reached an exceptionally
low IL rirc even In 1881, the per ton per mile on
the PENNSYLVANIA Railroad division then standing at
3 mills but find that In sol the cost per ton
per mile had been reduced 10 3 % mills. being a
further reduction OF about 10 per cent II needs no
argument to show that with 4 constant decrease In
rates II Is not possible 10 reduce expresses In the same
proportion and maintain the safety md efficiency Of
u railway. $500 ,c
amount 'y Of % the stocS 81 tn. fennsylvana Railroad
Company IS Led In England, to compare Its rates
and lost per ton per mile With those Of the leading
English railways Those not familiar with the hgure,
viii perhaps be somewhat astonished TO learn that
on tie leading English roads the average rate per ION
Dor mil. IS about cents or three times as much
~ the average rates received on the Pennsylvathm
snrprsed 10 Learn that while receiving rates three
times those prevailing the Pennsylvania RallrSad
tic percentage OF operating expenses on the English
railways IS not as much below that existing on the
leading American railways as might DE- suPp uIss,
for the wear 1891 show that the cost Of operation
in that year 50 per cent OF the gross reeeptsa
willie tie cost Of operating the Pennsylvania "a'oau
D" II tn5 rrnnsSiyAns railroad COMPANY had rseeiyed
r rail- sTge eiTed per It's peenase age Of operating
penses would not have been 20 per cent OF us re-
% from the eSls;ence Of conditions in his country
which DO not prevail in Great Britain he compeilsa,
Tor a great many years past, the administration OF
our railroads not only been exceptionally clnaenl,
NJ shown by the enormous Increase In me nySenei'
of freight and passengers, but also eNc'plohay eco
nonlca Between 1866 and 1901 tn receipts pe.
ton per mile the Pennsylvania Railroad DNSoh
iaV. fallen from 80 3. 10 mills q 300 mills ms
las been mainly due 70 the constant conpeioh WHICH
lie railroads had meet from the transportation
rontes bv canal lnhc mud river and 10 the cOnStrucn
Of rival lines largely Tor speculative purposes through
seciI,us OF country where the lines already existing
were more than able 10 take care OF the traffic.
These two elements have no existence In England
FOR The reason that IN that country The RAILWAYS prae,
rvrrS penetrating the country ana iOrmlhs com
uletc system Of water transportation. and II Is I'm
ro,siblc TO build n new railroad except at very high
vnn.c and hcn only atter having thoroughly salts
properly provide for the trnic tributary 70 teir hnss
NV manager, that in the fac OF competition which
has reduced their rates "a onehalf ana In some cases
10 even onethird OF the figures prevailing twenty years
oeo tn,y have been able to hold their own and earn
fair profit for their shareholders. TINS mas Oeeh
Shed largely by Increasing the capacity OF the
necessarily the load hauled per train. and by putting
nv, NV in Maintenance and repairs The fact that the
ods from nine 70 sixteen tons ana the average load
per train between dG per cent and - per cent Is .hc
best proof that the managers Of the American 1ways
haye been wa,chful OF the interests of their share
holder, and have done everything In their power IN
earn a prot, ont OF the prevailing 10" rates upon
the capital Invested from time 70 time o,,u {, CANA
As Tho Impression seems To prevail In some
onartcrs that the expenditures FOR capital account
Upon tho Ponnsy vania Railroad hav" been abnorIaly
ON the leading English railways of the same cas-
we find on Investigation that the Londpn and South
western which controls S3S miles. has m outstanding
cuIhtM OF sl65 Ooo 900, that the Great Northern.
witch controls 500 miles. has cap tn OF T2looOo
GuO lint the Lancashire and Yorkshire, VITA 52j
ncs has $50 coo 600: that the Gr,at Eastern. with
/ Io4 miles has f-2J 900. 900. that the North East
rrn with iGl2 miles. has ~2O1OOOOoo. that the
Great Western, which controls 2,a,l miles. hat $3.50
COO 90: that the Midland lia lroad, Win l3e2 mlc;
has $40 900 900. and that the London and North
Western. with 500 miles. has capital Of 800
coo 900 whereas the PENNSYLVANIA Railroad, with
> 573 miles In rs immediate management, has but
A.O4 900 600 OF capital In the shape OF stock
Vcsmonfo in lis Western and other lines, not In
GUIDED I'm the above mileage. We find also that the
Icnnsyiynnia Kar0ad Company has pursued the same
Conservative p,icy p.actSd by the lcaiing English
railways I'm prornng the larger portion Ol rs capital
rrnn lis shareholders rather than through loans
I'm the eight English railways TO which We have re