The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-09-08
EXPENSE OF The ROAD
DEFENSE IN THE IRON ORE RATE
CASE CONTINUES TO
SHOW
THE COST OF REPRODUCTION
ID. Nj. PhiIbin, Former General Man
ager of the Missabe Road, Submits
Schedules Hearing on the Subject
Tells of the SOO's Experience In
Handling Ore.

handling Ore.
The second day Of the ore rate case hearing
In st. Paul before the state railroad and
warehouse commission, like the first, was de-
voted In large part to proving the schedule
Of estimated cost OF duplication, submit ed
by the Iron Range road. Five witnesses
were eXamined-F. d. Underwood, general
manager Of the 500 road; f. G. and P. E.
Winston, the Minneapolis contractors; c. j.
Rank, the local agent OF the Illinois Steel
company, and d. NJ. Philbin
Mr.. Phiibln was formerly the general man
ager or the Duluth, M.szabe Northern, and
Is now the second vice preside Mt OF the Ea t.
ern Minnesota. He has a. long experience In
the handling of ore, both a. Dulu aod at
marquette, where he was with the South
Shore read previous to taking charge Of the
Minnesota property.
Mr.. Philbin first described in detail the
property Of the Miszabe read; It's docks, rail-
way and equipment as the property now
stands, and told of the nature Of the o5un-
try through which 1t was constructed, con-
trastinS that condition and in 1898, when
the read was constructed. Even now. the
witness said, the road was not in a condition
10 permit its handling its present voIu ne of
trathc with maximum Of sfety and a mia
lmum OF cost. With minute &c all Mr.. Phil
bin pointed out imp, oS ements Messed to put
the property in such a con iition lha. 1 8
present traffic could be handled with tn ,
greatest security and economy The i'm
proyements he estimated at upwarls Of
S,I5S, COO All Of this money, he sa d. was
needed for specific Improvements SIT firth
by items in tables offered In evidence, wi h
the estimated cost of each it N set forth. In
the opinion Of Mr.. PhiIb every one of
these improvements was a nee ssi;y to ada
quately ht the road TO handle s present
traffic.
Turning from this phase of the question.
Mr.. Philbtn stated that the Duluth & Winni-
peg, together with the Wright & Davis road,
operating from the Mahoning mine at Hib-
hing to Allouez bay, the Superior ore docks
ma
miles, and when projected improvements for
reducing grades had been made would have
haul, these roads would, he explained. be
bound commercially by any rate that the
commission might direct for the Missabe and
the Iron Range
Mr.. Philbin went back again to technical
details pointing out the cost of the items
that go to make up the plant Of an ore car
rying road, and showing that each, dock
bridges, rail equipment and all have def
mite life, irrespective Of annual repairs. Exact
account could, he said, be taken Of these re-
pairs and then the life Of the component
parts was something that was perfectly ascer-
talnable. Again the witness produced sched-
ules which were introduced showing the vari-
Gus items Of the roads property subject to
depreciation and setting forth also the amount
properly chargeable to annual repairs and
the amount properly chargeable annually TO
depreciation. Repairs, depreciation and re-
placement must he said, no matter how the
books be kept, come in the end out of the
income Of the road and a reasonable rate
for traffic must, he thought provide an IT.
come large enough to pay ell these expenses
and provide for renewals. He submitted Ia
bles showing the amount which such a ROAD
as the Mssabe should set aside annually for
renewals aside from repairs. He fixed this
amount at upwards of $500 900 annually. and
when 1t was explained that the Missabe had
not created such a fund. said that this
would account in great part for it's present
apparent low operating expense Supporting
his specific figures of depreciation, Mr.. Phil
bin stated that the business of an ore road
was extremely hard upon every item Of equip
ment and he thought this was a material
factor.
Asked as to the traffic Of the iron roads
aside from ore, Mr.. Philbin said the passen-
ger, timber and miscellaneous traffic Of the
Missabe did not pay even its proportion of
the expense of that business, much less It's
share OF the fixed charges. This deficiency
OF necessity came out of the profits OF ore
carrying and was one of the inevitable Incl
dents Of doing on ore. business.
Taking up the specific rate for ore-carrying
| charged by the Mssabe road Mr. Philbin ex-
planned that 1t included the terminal charges
at both ends and in his opinion, a fair
be 10 cents gross ton, while as a matter
OF fact, this was Included in the one charge
The rate charged by the Missabe was so cents
q gross ton, but Mr.. Philbin explained that
II 1t were computed in net tons as was Gus
tomary with most roads, it would be re-
duced to II cents. In concluding his testi-
building the Missabe and the Iron Range
roads was three times greater than for con
strucuon IN prairie country.
bit OF Mr. Philbins testimony hghtened
up somewhat its technical nature He was
explaining the rough usage to which the
Plant OF an ore-carrying road is subject The
Mlssabe dock, he explained, was SO feet above
water level and to admit the big boats 1t
was necessary to have twenty feet Of water
It was thus necessary for the load upon the
structure to be carried nearly rs feet above
any support for the foundation. This
structure carrying two strains, the ore in
the pockets and the moving trains, was still
ore carriers laden with 1900 tons Of ore.
Why, II such load, he said, could be
carried against this building by the force
would be no building"
During the morning session much interest
ing Information about the 500 line was
derwood. In reply to queries by Mr.. KELLOGG.
he said that the 500 is an ore-carrying road
IN connection with the Chicago Milwaukee
& st, Paul and slightly with the Chicago &
Northwestern, from a point ifty-four miles
west Of Lake Michigan to the lake. The
500 joins the Milwaukee at Pembina and it's
terminal is at Gladstone, Mich.
Mr.. Underwood said that the 500 rate is
but GIG cents per ton per mile, and Mr.. KEEL
logg asked him if that was a remunerative
rate.
ut was not" said Mr. Underwood. but we
were forced into that rate by a combination
OF circumstances that We were powerless to
control. we made contract with the Mil
| Waukee Northern railway ten years ago
| to move what ore they had for ten years at
SUCH rate as circumstances seemed to re-
| quire. That was the first circumstances The
| second was we held commerce with them and
| with the Chicago & Northwestern, both Of
| whom originated all the ore that we handled,
and 1t was decided that inasmuch as the
mines were there and we all had a consd-
cradle Investment in ore docks and equip
ment. and that the villages caused by the
mines were there, that we were under a
moral obligation to carry the ore in order
that the ore business might not be decimated
and If the business should improve, we
would lose more money by loss of time in
restoring the price than we would perhaps
! to carry on the operation at a loss during
the intervening period. The ore business is
about 2k per cent Of our whole business
I'VE would not undertake to move ora
at our present rates if 1t was our whole
source Of revenue"
DO you consider it better to carry on
business though 1t does not pay than to
abandon 1t, hoping that it may improve?"
We recognize certain moral obligation
there said Mr., Underwood, which we
US carry. on this business for the reasons
which have explained. We hope the price
Of of, ore will go up and therefore the rate
Has the 500 road ever paid any divf-
dends?"
ut has not It has paid interest on its
bonds at times. It has paid interest on it's
bonds three years out of ten
Mr. Underwood was questioned as to the
comparative safety of investment in a road
like the Duluth & Iron Range, which de-
a road which obtains It's revenue from a
diversity of traffic. and he thought that an
Investment In such a road as the Duluth
e Iron Range hazardous investment Bonds
for such road. he said, could be sold 10
some men. but not to the general nublic
especially where the road runs into a new
country.
Another witness was Robert D. fweedv
the chief engineer of the Wisconsin lines
who verified the Iron Range estimates Mr.
Rank testified briefly as to the cost of steel
WinStOQs verified