Chicago eagle. [volume] (Chicago, Ill.) 1889-19??, 1895-05-11
THE STATUS OF RAILROADS

equipments Kun Down, Future Dark
The status of American railroads "a
interesting to the student, perhaps o
little alarming. Certainly II would be,
unless for the certainty that nm In.
terest 80 rooted in the public need will
right Itself In time. The railway bust.
ness OF the country reflects the general
industrial depression and suffers hon.
estIy under other economic factors Of
tine situation. 1t IL indeed one of the
best baromcters Of prosperity or ad.
versity
Inc enormous expansion Of the rail-
road system through sparsely settled
territory; the watering of stock for
speculative purposes; the centralixing
tendency, which has loaded down orig
inally strong roads with additional
hxed charges In the absorption Of feed.
ers; the fierce competition in rates aris-
ing from the paralleling Of roads-all
these things easily account for the fact
tnat the average American railway
dividend Is a mere bagatelle This ID
indeed only about ~ per cent 20
AGAINST per cent in England.
Such b the normal condition Of our
railway system, II that can be called,
normal which ut it, best does not In.
dex sound financial health. But the.
last two years have shown q still great
er declensiOn Of the vital tone. The.
sick man is getting worse and the doc.
tors scarcely know what prescription
to recommend. The preliminary re-
port OF the Interstate Commerce Com.
mission gives some significant revela-
tons about this interesting matter.
The decrease Of net earnings for
1s0a.0A on a mileage Of 140.50O miles
OF road, presumably including the
strongest roads in the country, was
~ ,555.S03 as compared with the pre-.
ceding year. But the alarming fact
underlying these figures In the report
is that $2S,2o1,1 21 had been paid In
dividends In excess Of earnings apple.
able for such payments One would
conclude then that the dividends came.
from an old surplus or from borrowed
money.
1t Ii almost impossible to admit the
former conjecture. For the last i've
years roads have allowed their roll.
ing stocks and roadbcds to run down
to the lowest service limit. There
have been scarcely any improvements.
Hundreds Of thousands Of cars have
been shuntcd on the cripple tracks I'M.
1T for use. The severest economy has
been practiced In refraining from any
but Indispensable expenditure. These
facts oil railroad and railroad supply
men know. No well.administered road
unless compelled by the direst need al
lows Its mechanical side to deteriorate.
This Mt once sets aside tho presump-
tlon OF any old surplus, unless railway
managers, usually the shrcwdest Of
men, have gone mad.
The other horn Of the dilemma 10
that money has been borrowed not by
one corporation, hut by many, to pay
dividends to stockholders. II this has
been done 1t has been done with the
purpose Of rigging the stock market
not from any motive of philanthropy.
Railroad corporations do not deliber.
ately run In debt on the yearly exhibit
unless for adequate financial cause.
A more luminous proof Of the great
depression Of railway business can
hardly be adduced. We find, too, that
even the pooling arrangements entered
into by the railroads under the most
solemn guarantees Of good faith are
~ brittle a. glass. They are broken
almost % soon 40 made. It IL matter
Of life and death with some roads to
got enough business to pay expenses.
Accordingly many Of the roads do not
hesitate to break pledge and offer
nm undercut to shippers. Necessity
knows no law.
There has been ample ground for
bitter criticism Of railway methods.
They have been selfish, OverreachlnR,
gr1sping In the extreme at times. But
whatever fault the past justifies. their
present state 10 honestly such % to
,all for sympathy and assistance, 10
'ar a. help can be given without doing
injustice to other great interests.