Omaha daily bee., 1902-09-27
MERGER AND The RAILROADS
Proposed Packing Combine May Seriously
Affect the Railways.
MONOPOLY ON ALL REFRIGERATOR CARS
n Merger r. Perfected Packers May
he Able to Dictate Charges on
Cars and Force Roads
to Pay Them.

whether the much-mooted packing house
merger has been effected. abandoned or
merely temporarily postponed is still a
question, but at any rate some railroads
are exercising an interest In the proposed
combine which has become quite noticeable.
Tn railroads bear a much closer relation
70 these big industries which propose to
unite their vast interests into one giant
organization than may be generally sup
posed at FIRST thought, and, while It is
not known that any Of the railway magnates
are doing anything to prevent the CONSOLE
dation, It is but natural. as has been
pointed out by a local railroad man, that
they would as soon see the scheme fall
through.
Through the medium of the railways
themselves the packing houses have been
Enabled to develop a subsidiary combine Of
no mean proportions, whose propensitles
would be materially enlarged and power
augmented by the formation Of the merger
spoken Of. This so-called combine is a
monopoly in the control of the packing
houses over the refrigerator cars. Already
The packers have succeeded in getting these
cars almost exclusively in their own hands
and are able to exercise an effective voice
In saying what charges the railroads shall
pay for them, but 1t is said that II the
merger becomes a fact the packers can
simply dictate these charges and the roads
Fan come to them or not, just as they
please.
When It is learned that the estimated
amount paid by the railroads annually to
the packers for the use of these refrigera-
Tor cars is IS, 900, 900, the seriousness OF
The situation can be appreciated.
Earning Capacity of Cars,
Before the new per diem system Of charg-
Ing and collecting for the rental Of cars
was inaugurated a few weeks ago these
cars, as all others, were rented on a mile
age basis. Statistics show that as high as
Bis has been collected by the packers for
The use Of a single car by the railroads
from Chicago to New York. OF course, the
lime the car is in the hands Of the railroad
must be charged for Just the same as IL IL
was actually on the road, travelling. This
n~iscloses something of the possibilities Of
this channel of industry.
These cars make on an average two round
trips a month. that is, between Chicago and
New York, and each car therefore earns
Tor the packers $500 a year at this rate, or
about 40 per cent OF its cash value. The
expense Of maintaining a car is placed at
300 a year, leaving a net profit per car of
bSoO. Wnen II Is known tnat q car costs
about 81 1000, 1t will be seen that In four
yeaTs It will nave paid for Itself under this
Bystem.
At present few railroads are building
their own refrigerator cas- and even COM
paratively few own them. Many roads
have disposed of their refrigerators long
ago. There was a time when the roads
found 1t more profitable to build and oper-
ate their own refrigerators, and 1t is Just
barely possible that this time may come
again. But any effort on the part Of the
railroads to combat the packers by at
tempting to force the latter to use refrig-
orators belonging to the transportation COM
panies doubtless would precipitate bitter and
almost endless warfare and perhaps be
worse for the roads after all. The packers
have for some time insisted on the use by
the railroads OF the packers cars. For in
stance, when a packer gave a big contract
pr hauling to a road he specified that the
freight should be transported in one Of his
W refrigerators, and in order to get the
business the railroad man came to his
Terms.
AS they contemplate the powerful
weapon they have placed in the hands Of
the packers, the railroad managers must,
1t Is said, have serious regrets and feel
inclined to upbraid themselves for lack of
foresight and business sagacity.