The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1904-01-11
HOW TO MEET
SLUMP In "NET"
SHRINKAGE is CERTAIN, SAYS A
PROMINENT r.. II. MAN.
Cross Continent Lines Can Boost Com
modify Rates and Come Out Even
But the Small Lines Have No Such
Resources, and, Says This Authority,
Stand to Lose.
Specjal to The Journal.

y Special to The Journal
\ New York, Jan. 11.-One of the
most prominent railroad men of the
.enorthwest takes a very cherries view
4 of the railroad situation as concerns
y that territory and the territory south
& Of it. His view is expressed about as
follows:
81 II may say that for the next
" twelve months Icannot see how we are
n going to maintain our net earnings.
In the matter Of gross earnings, 1t
! would be very unfortunate indeed II
the roads of the northwest and the
middle west did not keep up their
figures of the standard OF a year ago.
There is not a railroad property In the
territory named that is not worth some
millions more intrinsically to-day than
it was at the beginning of 1908. This
being the case-considering the money
that has been put into these prop
critics, the new branches built, the new
4 industries practically subsidized by the
ss roads, the new departments estab-
lished and the tremendous amount of
new equipment ordered--a failure to
s record increases in gross earnings
would mean retrogression.
I'm net earnings the matter IS worse.
It is all very we'll for Roswell Miller,
President Spencer and others to
f moralize upon the possible effect Of the
improvements that have been made
q and the chance that the economies 50
Z introduced will enable the roads to
X show increased net earnings. L know
and they know that these improve
ments have been spread over a long
period and that their effect has been
felt year by year. The net result
of 10 per cent of these improvements
Il shows in the earnings Of 1908. Only
the net result Of about % per cent or
Z them, therefore, remains now to be re-
p allied And what will that amount
to? Will it reduce operating cost on
sS the average 2 per cent? L doubt 1t.
~ And in the face Of this little reduction
in operating cost we have, among
other things, a 10 per cent advance IN
wages within eighteen months, ~
+. per cent advance in fuel in the same
time and a general advance of over 10
q per cent in all the materials that a
railroad uses. .@
MI. Hills Nice Plan. '
James J. Hill, whose astuteness is
IN a proverb, advances very neat anc
"a plausible and perfectly beautiful plar
to make it all up by an advance II
s. rates. That is lovely for Mr.. Hill
He can jolly Union Pacific, Southern
Pacific and Canadian Pacific into E
i, kind of holy alliance with his lines t(
50 put up the rates on long haul business
THAT distributes the extra charge ove1
Is a great big territory, will not come 81
e, heavy on the general shipping public
@and will bring the biggest possible
- per centage of profit to the lines con
# cerned. But what would like t.
81 ask-about the roads that have n
Is thousand-mile haul? What about tn
n roads whose freight all originate
"a within a circle of 100 miles? Cal
M they advance rates? Certainly no,
"a while Great Northern, Northern Pa
M cific and other lines keep down tn
short haul rates.
8 TT resolves itself into this. TIL
IA roads that have a monopoly OF tn
e long haul business across the contlner
u can get together-have got together
N they say-and can arrange to max
N enough profit on their monopoly c
this business to offset their compare s,l
81 magnaminously abstain from ad
vancing their local rates. Conse
~ duently the small lines that do
q. local business in competition wit
t8 perhaps one or two divisions OF the bl
n road have to keep their local rate
# down. But the price of labor and me-
Il terials is just as high for the sma
w lines as the big. What chance has tn
N little road got? Here is the way
e. goes: u,,,
"'The traffic agent Of the Burl1nt
4: ton, for instance, goes to the D.
s. shipper Of flour from Minneapolis
81 Chicago. This shipper has been a.
q customed to ship good deal of h
If stuff via the Great Western and Wi
"a consin Central because, being loo
@ lines, they keep their car supply I
y better for their big customers. III
81 agent will say:
~ We'll, we're keeping down OF
local rates. The Great Western wan
to put them up on it's line, but it car
very we'll while we keep them dow
We can afford it because we ha
raised the rates across continent
some commodities. OF course Y
won't keep our local rates down u
less we get the business. Don't "
think you could give us 500 barre
a. week for a while? OF course '
don't pay rebates on anything Ii
that to get the business, but you W