New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1895-08-28
THE RAILWAY SYSTEN.

rho procrcss OF the railroad system disclosed
nv Tho annual compilation has been remarkably
slow for the last two years Perhaps This Is not
IN no regretted since railroads have become so
numerals and compete for business so sharply
with each other that their earnings on work
done or on capital invested have been surpris-
incy reduced In 1882 the railroads reported
s3.5l1 900 capital and moved 3GO,OOO,OOo tons
freight. earning 1898 cents pcr mile Tor
every ton and paying dividends averaging III
nor cent on their capital Last year the railroads
reported S5,O75,OO0.000 capital moved 6Io,ooo.'
noo tons freight. and earned only 1913 Of cent
nor mile for every ton their dividends averaging
only 1G4 per cent on their capital. Here Is
decrease Of oIs per cent in the rate paid per
mile for hauling freight, and decrease or i3.b
per cent in the rate Of dividends earned. Thls IS
partly because the mileage increased 3oOo" or
nearly q quarter. in the four years 1891" w. III
elusive. though 1t had increased about 2l.00O, or
nearly a nth. in the four preceding years. IL
seems quite safe to say that the new roads puli'
in these years materially lessened the value OF
railway property previously existing IL VIII De
remembered that when the Interstate law was
enacted. early in February, 1887, 1t was predict
ed by The Tribune, AS by some experienced rail-
road men, that one result would he 10 cause
an undue expansion Of the railway system III
the years Immediately following the competition
between the great companies In pushing new
feeders and connections was the subject OF gen
eral criticism We now can get some measure
Of It's effects
The year 1894 It is true, does not orcr fair
test. In the following statement the essential
data are given for the years lsS2. 1872 and lS''
so that Il may be Judged how much Of the recent
loss has been due to business depression. ana
how much TO the competition OF railroads win
each other:
S:sS:s II 1883 s;'ssis
go go az $50 $, s.
~. d1,idssnds uc 2gi 1913 i6i
Freight per ton ... M, ca
The reduction in rate of dividends had been
1876 per cent in the ten years ending with 1892,
a wear Of marked prosperity. and the reduction in
earnings per ton per mile had been 23.o per cent
As the quantity of freight had more than dou-
bled. the gross earnings had increased 56.3 per
cent in ten years. but The capital had also in
creased over 40 per cent, and the expense OF
operating the nearly doubled mileage and doing
the more than doubled business had also greatly
increased The practical result Of the ten years
Of competition was to reduce the dividcpd-paying
value Of railroad property 1873 per cent; it was
as If the 1880 miles Of new road had not only
been worth nothing but had ut the same time
cut down the actual value Of previously existing
roads nearly fifth. These the results OF
the competition which the Interstate Commerce
act was intended to and did increase, though that
competition had been quite fierce enough before
the act was passed.
AS to the last two years, the addition Of rail
roads and the prostration of business have IN
creased the capital stock by SlJ5.00O.00O and
the funded debt by S202 100000, and IL the now
roads had cost as much as the average Of all the
old roads in existence, the figures would still in
dicatc that s1S5, 900 had been added 10 cap
italization merely for the covering of losses.
But as the dividends paid have not reached that
sum for the two years passed. 1t follows that the
railway system as 4 whole has been virtually
earning nothing. but running into debt Charges
had been low, and yet are GAS OF / cent per ton
per mile lower than two years ago, or about a
twentieth, so that freight earnings would have
been about $35,0O0,0O0 larger had the rates OF
1892 been charged. But this accounts for only
n fraction Of the loss. The decrease Of 10 per
cent in tons moved makes more than double the
difference or course 1t is not to be understood
that the railroads which paid dividends have
all done 80 with borrowed money, for. Ill
though some doubtless have, the most have not.
But considering the system as a whole, its losses
during the two years have been such that. Il
regarded as one corporation it earned nothing
and would have run into debt about $lO,OOO.OOO
md no dividends been paid In 1894 or 1898.