The San Francisco call., 1903-12-08
Abo1tt Railroads.
BY EARL d. BERRY.
Former Railroad Editor New York Times and
New York SUM


Gould remarked to a newspaper re-
porter that the tendency of the times
was toward concentration of the con-
troll of transportation facilities. Geo
graphical conditions. convenience in
operation and the necessity for eco
nomics all require that the different
railroad systems shall be brought into
harmonious relationship. While this
may mean larger profits to the capital
lists who engage in great projects, it
also affords greater protection against
adverse circumstances, which for
many years prevented the stockhold-
ers OF many railroads from getting any
profits at all. Coils p. Huntington
said a few years before his death that
il he could have the management of
all the railroads in the United States
he would be able to save half the cost
of operating them and pay the stock
holders so per cent more in profits.
The Interstate Commerce Commits
sion recognizes the propriety and eX-
pediency of grouping the railroads in
presenting its annual reports of the eX-
tent and results of railroad operations
in this country. These groups, which
are ten in number, bear no relation to
the question of ownership. They are
entirely geographical. The first takes
in all Of New England; the second,
New York and Pennsylvania; the
third, Indiana, Ohio and Southern
Michigan: the fourth, West Virginia,
Virginia and the Carolinas; the fifth,
Kentucky, Tennessee, Mississippi, Ala
bama, Georgia and Florida; the sixth,
Wisconsin, Northern Michigan, Illi-
nOis, Iowa, Minnesota and part of both
DakOtas; the seventh, Montana,
Wyoming, Nebraska, part of the Da-
kotas and part of Colorado; the
eighth, Colorado, Kansas, Missouri,
oklahoma, Indian Territory and
Arkansas; the ninth, Texas, Louisiana
and part of New Mexico; the tenth,
all of the Pacific Coast States. with
Idaho Utah. Arizona and part of New
Mexico. In the fiscal year ended June
80. 1901, there were 1015 operating
railroad companies in this country.
embracing nearly 10000 miles Of
line.
Less than a dozen men now practi-
cally control all Of this railroad mile
age. Twenty years ago nearly every
railroad of Importance h. d q different
set Of owners, and the controlling in
terests were in most cases antagonistic
because Of the sharp competition for
traffic Concentration of control finally
became a necessary means Of self-pro-
lection. After more than one half Of
the largest railroad companies in the
country had passed through insolvency
a few men took up the problem of rail-
road preservation. Much progress has
been made IN the way of consolidation
and combination, and the lines of con-
troll are being drawn more closely each
year. 1t is interesting to note how
ever, that while the control of railroad
properties has passed into the hands
Of a very few, the ownership Of rail-
way shares is steadily becoming more
widely diffused. Almost every railroad
company reports this year an increase
in the number Of its stockholders.
It was the Pennsylvania Railroad
CompanY's resident. A. J. Cassatt, by
the way. who first took up, with w.
X. Vanderbilt and ]. Pierpont Morgan,
the question Of community of interest
among the railroads. When the United
States Supreme Court declared all rail-
way traffic agreements to be illegal
these three men undertook to bring all
Of the trunk lines operating between
Chicago and the Atlantic sea board into
harmonious relationship in order to pre-
vent rate cutting and secure economies
in operating expenses. 1t was mutually
agreed that the Pennsylvania Railroad
and the Vanderbilt Morgan interest
should dominate the Eastern railroad
situation. Jointly they purchased con-
the Reading and Jersey Central rail-
roads. w. K. Vanderbilt merged the
Lake Shore. the Michigan Central. the
Canada Southern the Lake Erie and
Western. the West Shore and the Bos-
ton and Albany into the New York Cen
tral system. Control of the Cleveland.
Cincinnati. Chicago and st. Louis and
the New York, Chicago and st. Louis
railroads was also vested in the New
York Central. Mr.. Vanderbilt further
more bought a large interest in the
Lachawanna system.
The Pennsylvania bought the Long
Island Railroad and the Western New
York and Pennsylvania and secured a
dominating influence in the Norfolk
and Western and the Baltimore and
Ohio. Mr. Morgan. besides his large in
terests with the Vanderbilts. obtained
control Of the Erie, the Lehigh Valley.
the Chicago, Indianapolis and ST. Louis
and two or three other roads, including
the Great Southern Railway system,
which absorbed the Mobile and Ohio.
Thus three men became the controlling
force Of all Of the principal railroads in
the East These roads are comprised in
the Interstate Commerce Commissions
first four groups which operate 103 40 |
miles Of line, more than half of the
entire railroad mileage in the country.
The aggregate capital stock of the rail-
roads in these four groups was on June
90, 1901, $2.51S 10. 159, and in that year
these roads paid 1903, ,093, ,019 to en-
ployes.
Mr.. Morgans activities also extend
west of Chicago. He reorganized the
Northern Pacific and with James J.
Hill formed the great northwestern
railroad combination, including the
Northern Pacific, Great Northern and
the Chicago, Burlington and Quincy.
These roads are a part of the Inter
state Commerce groups six. seven and
ten. They represent an aggregate cap
italization of about 5000 000, 900 and in
clude 19, APO miles of line.
Z. II. Hartman is at the head of one
Of the largest railroad combinations vet
formed. A few years ago he was only
known in Wall street as a minority
stockholder in the Erie. Turning his
attention westward, Mr.. Hartman
first obtained control of the Chicago and
Alton Railroad and the Kansas City and
Southern. He secured dominating in
fuence in the Illinois Central and soon
afterward took full control of the Union
Pacific and the Oregon Short Line. The