Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1903-07-17
/ IS A HARD Fight
Almost Impossible For Inde-
pendent Railroads to Com
pete With Combines
IOWA CENTRAL AN EXAMPLE
George w. Sewers, of oskaloosa, Gen.
eral Counsel for That Line, and the
Minneapolis G st. Louis Railroad,
States Some Startling Truths-lnter-
state Commerce Law Amendments.
Special to es-Republican.

Des Moines, July 17.-An interesting
| thig was brought out In connection
with the matter of railroad valuations,
and one about which the public has
known little, but which appears to be of
vital interest to some of the railroad
owners and managers. This was
brought out by George w. Sewers, of
Oskaloosa, general counsel for the Iowa
Central, and the Minneapolis & ST.
Louis railroads, in his argument before
the executive council. Mr. Sewers told
some very plain and startling truths
about the railroad business, but he
stated that inasmuch as these facts had
become known to so many he did not
regard 1t as letting out secrets of the
business. However, what he said would
| be news to many people of the state.
He prefaced his remarks by calling at
tention TO the fact that a year ago
the common stock was selling. Of the
Iowa Central, up above 60, but now it
is down to Il cents on the dollar. He
called attention also to the fact that
the reports of the Central showed that
the percentage of operating expenses
to gross earnings had been reduced.
He proceeded to explain both things.
| The item of competition entered
| largely into the situation. The Iowa
Central is an Independent line. 1t is
making struggle to maintain itself
independent, and this against the
pressure from all sides for consolida-
ton. That struggle to remain inde-
pendent Is becoming daily more diff
| cult. But more than anything else
the recent national legislation, all well
meant, perhaps, which had rendered it
| impossible to go out and get business
as in former times, had greatly added
to the difficulty in the way of the in
dependent roads. When pressed to be
more specific by the governor, he
tfrankly admitted that what he meant
ssas that the law forbidding rebates,
and other special inducements to ship
pers, had still further aggravated the
natural discrepany between the great
roads and the smaller, independent
systems, so that railroad, situated as
the Iowa Central is, with no terminals
in any great city, and not reaching any
markets, finds 1t Impossible to main
tain it's business against the sharp
competition of the great roads with
their terminals and connections and
combines. The independent lines find
1t impossible to meet the competition
of the merged systems. and this is
largely because the amendments OF the
interstate commerce law have shut
them out. AS for the Iowa Central he
had advised the full compliance with
the law, and it was being followed
faithfully, but with results not pleas
ing The past two months the gross
earnings have shown a depreciation of
$4,000 a mile. Whether the Iowa Cen
trail ana other similarly situated roads
can maintain themselves against the
burdens added by the interstate COM
merce amendment. which was placed
on the books by western congressman,
remains yet to be known. 1t is certain,
however, that the amendments have
had the effect Of placing burdens upon
the independent systems. AS to
whether the effect was good for the
shippers he left that for them to de-
eide.
Another matter touched upon by Mr..
Sewers, in his argument, had some
weight with those who were consider
ing the question of railroad values al
the present time. The percentage of
cost of operation to gross earnings had
been reduced some, but this was de-
spite that all wages had gone up and
all the incidental expenses relating 10
labor was greater. Now, how have the
economies been effected that make pos
sible the increase in net earnings? By
.robbing the traffic department.. the
maintenance, the general equipment.
This has been going on for several
years on practically all the railroads.
They have been making profits by de-
clining to keep up their track ana
equipment as they should. This can go
on for a certain time, but must cease
and then there must be greater ex-
penses for maintenance. This point has
about been reached. Every item Of eX-
pense related to wages has been in
creased. The companies are at the
mercy, as it were, of the laboring men.
The wage earners are able to command
the increase, and this must come at the
expense of other departments Of the
business, If the earnings are to be kept
sup. Never before in the history of the
men. and this is an element the rail-
road managers must consider at all
times.
The testimony of all the men who
represented railroads who appeared be-
fore the council was to the effect that
wages have generally increased in all
lines and that the general expenses OF
operation have increased, tho econ
omies have been effected in methods
which have reduced the total OF oper-
ating expenses for the lines in Iowa.
Howard Tedford, of Mt. Ayr, state
binder, returned to the city last even
ing happy in that he had settled the
lawsuit brought by II blind preacher
named Hatch for $4,000 damages
against the Ringgold Record for de-
fanlation of character Mr.. Tedford
declined to state the sum for which
he had effected settlement, but in
dicated that it was not fortune. Mr..
Hatch Is . worthy blind preacher who