The times. [volume] (Richmond, Va.) 1890-1903, 1902-05-15
THURsDA.. MAY Is. 100.
Mr.. MoRGAN's SERVICE.

public service in turning the thoughts OF
/ the people. so far as they relate to oom-
1nercial questions. into different chan
mel
MFR, Morgan has also done the people OF
this country great service. He has ac-
curr,lated an immense fortune for him
self, but he has also greatly enhanced the
value Of railroad properties and nanufac-
turing plants. Especially 10 the good ef-
feet Of his work seen in the railroad
management Of the country. There was
a time when railroads were run at hap
hazard, SO ear rs their business affairs
Gro concerned. Tho railroad lines an
competition cut each others threats. and
by doing business at less than the actual
cost they went from bad to worse. until
in q majority OF cases the roads were
run into bankruptcy. It became by
word in those days that money was to
be made in wrecking railroads rather
than in conducting them successfully.
That meant that when tho roads were
wrecked there was reorganization. by
which the stock was largely wiped out
and few men lined their pockets with
isnoney, at the expense Of the many stock
holders. &
L1r. Morgan inaugurated a new policy.
It was his idea that railroads should
;be operated upon strictly business prin-
cipIes IN tho interest OF the stockholders.
ITO this end he had all the roads with
(which 10 was associated put in first
;class physical conoition and then equipp-
ed with tho best locomotives and cars.
Ills next step was to bring about an
agreement between the roads in oompe-
tiuon that they would not cut rates be-
low q fair price for transportation He
| did not destroy competition. but he
brought about new kind Of COMPETE
| ton. MIR. ]. ]. Hill has defined this
new competition as inactive competition.
1Ie says that the difference between &C
jtice and inactive competition is that in
the first case each road attempts
to secure as much as possible OF bust
ness for itself by underwriting the other;
in the case Of inactive competition the
| roads maintain rates. but each attempts
TO get as much business as possible by
giving the best possible service.
It is quito true that conditions have
been very favorable to Mr.. Morgan's
plan. We have fallen upon era Of
great prosperity anu the railroads have
had all the business that they could do.
But under Mr.. Morgans scheme this
business has been. landed to the best
ad o,>to nd Of
the railroads in the country are now pay
ing dividends. at least on their preferred
stock: many OF them on both preferred
and common. Indeed. in some instances
the common stock of the road is selling
very much higher than the preferred
stock. for the reason that the preferred
is limited to a fixed rate Of dividend,
while the common IS entitled to all that
It can earn. In the case of Union Pa
ciflc. for example. the preferred stock,
which Is limited to 4 per cent. is selling
around 81, while the common is selling
well above par. The same is true of
Baltimore and Ohio, ST. Paul and some
other roads. Inoeed. in the case Of St
Paul, common stock is worth almost
twice as much as the preferred stock.
Under the Morgan system of operating
railroads. the increase In the value of
railroad securities has been something
encrmous The stockholders have been
receiving the benefits, instead OF the
stock jobbers and the railroad wreckers.
But this is not all. The railroads Of
this country are among our greatest in
dustries. giving employment to tnnumer-
able men and women and sustaining a
large proportion Of our population. The
greater part of the earnings of our rail-
roads goes to the employees, and it is
TO be said in behalf Of these corporations
that as they have become more and more
prosperous they have increased the wages
OF their men.
Thsre are those who say that Mr.. Nor
himself than any one man ought to have
That may be, but Mr.. Morgan has done
this country service which is worth
vastly more than the compensation he
has received. It may be said that Mr.
Morgan was working in his own interest
and not in the interest OF the general
public That may be. We do not know
what his motives were. We are always
allow to question mans motives. But.
whatever the motive. If judged by the
result, we must all in fairness conclude
that J. P. Morgan has been public ben
efactor. He has taught this country a
lesson which has added millions and
hundreds OF millions TO its wealth and
which has Nut it in a way to greater
triumphs.
==-=-=
THE SOuTH,S WAYS.
Although the Southern Conference for