St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-07-31
RIVER AT s A. RI.
PART OF TIE RAILROAD PROB.
LEM

Notice was made recently of a
meeting in New York city of the
presidents of some of the principal
lines of railway in the country for
the purpose Of forming another
"gentlemen's agreement" by which
railway rates might be maintained.
Last week there followed another
gathering of the representatives of
lines of railway east of the Missis-
sippi river for a similar purpose.
These meetings, with the inevitable
cutting of rates that ensues, and the
maturing of agreements followed in
turn by efforts to patch up harmony,
constitute large part of the annual
record of railway news. The main
tenance of rates remains now, as
1t has been, the most difficult factor
Of the railway problem. Over 25
per cent of the railway mileage of
This country is being operated by
receivers, because the prior man
Ing expenses and fixed charges. A
railway in its very nature is a mo-
nopoly. 1t would seem an easy thing
10 arrange an agreement between
hese different monopolies in regard
to the rate the public should pay
for their services, which would be
as unyielding and as unbreakable
Is the law of the Modes and Per-
slams. That it is not, the records
Of these agreements, with their con-
slant failure to fulfill their purpose.
Is ample evidence. Why it is not
S an interesting question.
One writer says that the failure
IS due to competition and the con-
slant pressure that has been brought
20 bear on the railroads during the
past ten years by state legislatures.
state commissions, and public opin-
on to force down their rates. This
Is not sufficient explanation, al
though it contains a large element
Of the truth. While the demand
Of the public expressed through
state legislatures and railway COM
missions has undoubtedly been for
lower rates, the great reductions
that have been made are not trace
able directly to this source. 1t is
true that, but for the agitation for
lower rates, and the efforts of the
people to compel the railroad COM
panies to grant them, the progress
Of their decline would have been
much more gradual But the great
difficulty about the matter is to es-
tablish rate producing the income
which the road must earn in order
TO remain solvent
One company after another has
found this impossible. Increased
economies in operation have been
put into effect, but the enormous
burden of fixed charges cannot be
sensibly lessened. Every railway
manager in the country has before
him the necessity of making
earnings sufficient to pay operating
expenses, and, at least, interest upon
the bonds of his road. If he fails,
1t means bankruptcy and the receiv-
ership. Whatever happens, these
charges must be met. Whatever OBJ
stacles stand in the way must be
swept aside. More traffic must be
had out of which to make earnings
enough to pay them. This is the
strong necessity for business which
is felt by every railroad manage
ment, and this is the chief incentive
to the cutting of rates when the
business does not supply income
enough to meet current expenditure.
One who looks at this situation
Is inclined to say Immediately that
the trouble lies in over-capitaliza-
ion. This is the truth, but
is susceptible of dou-
Bile meaning. Over-capitaizatio ton