The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1894-10-07
A RAILROAD ATE BE CHEAP.
ENED:

Can railroad rates be cheapened? is
the question which Mr.. Newcomb. who has
for several years been in the service Of
the bureau Of rates and transportation of
the Interstate-commerce Commission, dis
cusses in the Forum. He starts out with
a presentation of the statistics, showing
that the larger part of the railroad prop
erty of the United States is not one which
offers attraction to the average investor.
During the decade which ended with 1898.
74.34s miles of railway, capitalized at $685.
ST. 600, passed INTO the hands of receivers.
At the close of 1898. 1919 miles of railway,
CT the railway capital of the country, were
operated by receivers. From 1876 to the
close of 1898, 1928 miles of railway, cap
italized at 49, .126. OOO. were sold under
foreclosure. During 1888 railway stocks
having a par value of $2.s59. 334.572. or e1.24
per cent. of the total railway stock, re-
ceived no dividends. and si92, 276. 999 of mort
gage and 500, S64, 269 of income bonds de-
faulted their interest. The average return
to capital Of all classes invested in rail-
roads during the prosperous year of 1892
was 1888 per cent. AT the same time the
dividends per mile have fallen from 81. 200
in 1871 to S72 a mile in 1892. At the
same time rates of transportation nave de-
creased, the average rate per ton a mile
-. 4 no - =
1 cent. and passenger rates per mile from
2.349 cents to 2.10S cents during the past
six years. While these reductions seem in
considerable, they saved the public during
the year 1898 Sis, 1887 on freight and
So. 292. 1S4 on passenger traffic, which is
As per cent. more than all dividends paid
during the same period.
The writer seems TO allow that these
figures show that rates cannot be material
ly ~cheapened if the railway shall be run in
the future as at the present time. He. how
ever, calls attention to a number of use
less expenditures incident to the struggle
between competing lines, such as the pay
ms " a ~ ObN6AA oaoA
ness and the maintenance of a large num-
Der of outside agencies and travelling agents
occupied in securing and routing" pas
sengers and freight. In a sin gle year when
ing westward from Chicago paid s1.2SS.5S5
for maintaining outside agencies, and one
road from New York expended SS71. 2s1 for
the same purpose. TIL aggregate paid by
all roads TO agencies and as commissions
is very large. There is much waste from
the competition of long and circuitous
routes with shorter and natural ones. Be
tween New York and New Orleans there
are n~inety-four all-rail routes, the shortest
being 1.S40 and the longest 2.051 miles. At
the basis per mile per ton Of the Interstate
pounds will be s77.lS by the shorter and
$1lS.1t by the longer. There are scores OF
such competing routes which carry freight
at the same cost, and yet the mileage OF
some of them is nearly double that OF
! the shortest. The longer roads must haul
such freight at a loss and must take a
period in hich TO do it which must be
detrimental to the shipper. Railroad rev.
enues. again. are wasted by maintaining
wholly unnecessary competitive trains.
| Between Chicago and Omaha eleven trains
are run daily each way except Sunday.
AS there are emily about 200 passenger
per diem each way, the public could be
as well served with half the trains and
the roads would save s1.5ss. 200 a year. Elk
tend the calculations to other through
lines running double the trains needed,
and the total which could be saved would