Evening star. [volume] (Washington, D.C.) 1854-1972, 1894-01-05
MISLEADING REPORTS.
The Interstate Commerce Commission Dc
Some Denying. ~
Their Annual Report an Interesting
Observation-Disclosures Commerce
and What It Means-Mileage.


there is general depression in railroad az
fairs. and that this depression is due TO the
interstate commerce law. The officials of
the commission deny both points. 1t is set
forth in the advance copy of the seventh
annual report Of that commission that:
1T has sometimes BEEN claimed that the
act to regulate commerce has operated to
diminish the revenues Of railroads. 1t Is
not uncommon to hear the statement that
this statute is accountable for many of the
railroad receiverships that have occurred
Of late years, but examination does not sub
stantiate the charge. The fact of financial
failures in the transportation business
sheds no light as to the effect OF this law
on the industry. Failures occur in all lines
Of business and at all stages of business
prosperity and depression. If 1t should turn
out that the per cent of the miles of road
under receiverships to the whole mileage of
roads In the country had largely increased
each year since this act was passed it
would furnish some basis for inference that
the law had the effect as claimed, but such
Is not the showing. 1t is found that on
December 81, 1881, the year that this law
was enacted and when the total amount
Of operated mileage was little over I4O,-
600 miles, the mileage in the hands of re-
ceivers was 0o- per cent Of the total mile
age. Six months thereafter, on June 80
1883, the total railway mileage reported
amounted to within fraction Of $50, 600
and the mileage controlled by receivers was
/
year thereafter on June 80. 1882 the total
railway mileage had increased to within a
fraction of 15S.0O0 miles, and the mileage
operated by receivers was Cooper cent OF
the total mileage. On June 80 1880, the
total mileage was 3,597 miles, and the
mileage operated by receivers fell back to
Cooper cent of the total mileage. On June
80. 1891, the total mileage was l6S 4O2, and
the mileage operated by receivers was .O5U-
per cent of the total mileage. On June 30
1892, the total mileage was III ,563. and the
mileage operated by receivers returned to
.0+5- per cent of the total mileage This
SHOWS how little the percentage of mileage
In the hands of receivers has varied since
the law was passed. 1t also appears that
while about $4,000 miles were added to the
total railway mileage from December 81
1887, to June 80. 1892, the mileage in the
hands OF receivers at the latter date ex-
eeeded the receiver milage December
81, 1887, by less than 1000 miles.
Accurate Information as to the mileage
actually in the hands OF receivers during
the years above mentioned is not always
SHOWN by the annual reports of carriers
to this commission, some of the mileage
icing owned by solvent corporations and
operated under lease or other agreement
by the companies which had become in
solvent, and again. considerable amount
OF mileage belonging to companies over
which receivers were appointed was being
operated by solvent carriers. But Informal
ton has been sought from a variety of
sources. and 1t is believed that any errors
much mileage in the possession of receivers
rather than too little.
The figures for the year ending June 30,
1893, are not yet received. The large rail-
during the past few months must increase
the percentare of the whole railway mile
age In the hands of receivers very largely
over previous years. but these occurred I'M
der peculiar circumstances in a general
depression Of business and through a sea-
son of panic in finance, a period when all
Industries went down together 1nvestiga-
ton among files Of financial journals of
recognized standing and importance, for
the years during which the act has been
in effect, discloses no showing upon which
tributed to the operation of the law
IAN examination into the facts compiled
by the statistical division from the reports
fled by the railways with the commission
shows that the condition Of the railway
system on June 80. 1892, was better than in
1888. Briefly summarizing, 1t appears that
the amount Of stock paying no dividend"
which in 1883 was 61:44 per cent. had de-
amount Of bonds paying no interest"
which in 1888 was 21.69 per cent, had de-
creased in 1892 to 1856 per cent; that the
rate Of dividends on the basis of the entire
stock outstanding. which in 1888 was 2.0S
per cent. had increased in 1892 to 211 per
cent, and that the earnings and income
have increased at a greater ratio than ex-
penses, interest and dividends is evidenced
by a constantly increasing surplus. Had it
not been for an abnormal issue of stock
during the year Of 1892 there would have
been a still better showing for that period
The comparative earning capacity of rail-
ways for the years 1883 to 1892, inclusive
is shown with more detail in appendix c.
The fact that the present rate of divf-
dend is low cannot be assigned to the effect
or the act to regulate commerce. Under it's
workings the rate of dividend has been in
creased. II the issue of railway capital had
been confined to the amount necessary to
construct and equip the properties it is
clear that under normal conditions of bust
ness there would be much more satisfactory
returns
''The average rate of dividend above men,
toned is, however, computed upon the total
amount Of stock issued, and notwithstand-
Ing the amount which paid no interest and
decreased on June 80. 1892. and the railway
situation was much improved on that date.
the amount of railway securities yield
ing an exceedingly small rate of interest
or no return whatever was still very
great. And this was seized upon
by many railway managers as evidence
that the law deprives carriers Of adequate
revenue. The only way in which the law
directly operates to limit railway profits is
by preventing the exaction of unjust
charges and undue Partially in transporta-
ton facilities. The claim Of these managers
then, must rest upon the proposition that
the law, by prohibiting the infiiction of
wrongs. works injury to railway prosperity
Such a plea against the working Of a
statute Is anomalous. II the remedial pro-
visions of the law are Just, and this is con-
ceded, the evils which carriers have brought
uFon themselves by mistaken policies of
rate-making and mar agement, and which
is often the case have outgrown their
power to control, are matters to be RENE
died by specific legislation. but no perma-
nent remedies for Improbable charges, ex-
pensive methods Of operation or needless
financial management are to be obtained by
attacks upon the law with a view to its
repeal or the enactment Of amendments
which would have the effect of emasculat-
ing provisions essential to the public in
terest. The people are determined not to
permit even a partial return to the rail-
road anarchy which prevailed before the
Interstate commerce law was passed.
THE RELIEF OF THE POOR.