The morning news. [volume] (Savannah, Ga.) 1887-1900, 1899-07-14
RA1LRoAp CONSOLIDATION.

RAILROAD CONSOLIDATION.
The report that was pretty generally
circulated a day or two ago, nancy, that
a combina ton had been made between the
two greatest railway systems i'm the coun-
try-the New York Central and the Penn
sylvania-has been denied but there APP
pears to be a belief that some sort of an
arrangement has been entered into by
these corporations. 1t may be that what
has been done is that they have agreed
not to cut rates
They have hurt each otner greatly with
in the last few years in their effo-ts to get
business In the territory in which they are
competitors. It is not improbable that
they have concluded that in future they
viii work in harmony But even If they
have made no arrangement for their mu-
tual benefit the chances are that they
will do so in the very near future. If
they continue to compete with each other,
they will in their effort to get business
throw away their profits to such an ex-
tent that they viii not be able to pay
dividends 10 their stockholders, IT, in fact,
they VIII be able to pay their fixed
charges. The demand from the public is
for lower traffic rates. The lowering of
rates has kept pace with the improve
ments which lessen the actual cost Of
transportation. The chances are that the
cost of transportation cannot be reduced
very much further 1T is not advisable to
cut wages. The thing that win be done
therefore viii be to still further consol-
idate railroad systems in order to reduce
operating expenses.
There is no doubt that the cost of oper-
ating the New York Central and the Penn
sylvania railways could be cut down hum
dreds of thousands Of dollars annually by
placing them under one management
And if they should be put into one system
there are other roads which would be
absorbed by them. Indeed, the work Of
| consolidation might go on until there
would be but two or three railway sys-
TENS in the country. The work of build
| ing railroads is pretty nearly over Only
a thousand or so miles of road a year are
now being built. The period of railroad
building is being succeeded by a period of
railroad consolidation. No one can fortel
with any degree of certainty where con-
| eolidation will stop
The public of course will fight consol-
| dation because of the difficulty or resist
! ing consolidated power. But the public
is really forcing consolidation by insist
! ing upon lower rates. Il may be said that
| the demand for lower rates is justified be
! cause The railroads are over-captalized.
No doubt some of them are. Most rail.
roads could be built for much less than
the amount of securities for which they
are liable. But In considering the ques-
ton of over-capitalization the fact must be
taken into consideration that the roads
have built up the businesses which enable
them to meet their Obligations. But if
J the water were taken out of the shares
of railways and traffic rates still further
! lowered, it would moi be long before compe-
tition and the demand for stIl other re-
| auctions in rates would bring the rail
ways again face to face with the ques-
ton of consolidation as the means oil
opening a way for them to meet then
| obligations and give something to theil
shareholders. This question of railway
consolidation has already assumed very
great Importance, but it looks as if its i'm.
portance would become very much great
| er before it is settled.