Decorah public opinion. (Decorah, Winneshiek County [Iowa]) 1895-1928, 1905-06-21
RAILROADS AS MONEY MAKERS. >
By Slason Thompson.

WIZ llSlltly lttldTt llle IdllIOduS VI
the United States are earning exces.
sive amounts at the expense Of the
public the government reports on this
question present a complete refutatiOn.
These government figures show the
transportation companies earn less
than any other class of corporation or
business in which such vast sum is
invested.
With between $1,000, 900, 900 and
Sl3, 600, 600. 900 represented in tracks,
buildings. real estate and equipment,
the returns on this great amount for
1903, the last year for which the census
and Interstate Commerce Commission
returned figures, was s444, 067, 795 in
interest and dividends. On a gross
income of 81, 900, SAG. .907 this amount
was at the rate of 1853 per cent or
T. 32 on the net capitalization.
The objection is often made that
the capital on which the percentage
is based includes large amount of
watered stock This is not true, at
least to the extent of public opinion.
Professor Hadley, President of Yale
University. and one of the leading
economic experts of the country,
makes this significant statement in
an article which appeared i'll the Bos-
ton Evening Transcript. April II. 1905
'The nominal figure of capital
stock and bonded debt for the 2C6, 00C
miles of railroad in the United States
is about Sl3, ,000, 600, 900. Very consid-
cradle parts of these stocks and bonds
are. however, represented by unissued
securities held in the treasures OF
companies, which would probably re-
duce the figure of outstanding capital.
izatiOn to point between Sll .0G0,
600, 600 and $4,000, 600. 600. How
much of this last-named amount is
water is a matter of opinion, on
which it will be impossible to arrive
at definite result. But taking the
railroads of the United States as we
see them [ am confident that it would
be quite out of the question To dupli-
cate them for an average of $50. 600 q
mile: and this figure applied TO the
whole system would represent a legi
innate cost of at least $40. 800. 900. 600. >
II, 1900 the railways of the country
earned 46 per cent on their capital.
In the same year the returns on cap.
ital invested in farms and manufactor-
les were S.4 per cent on the first
named, and 1913 per cent on the last.
AS the prosperity of both the farmer
and manufacturer is due TO the cheap,
rapid and effective transportation
afforded by the railroads. this return
TO the railroads is neither excessive
nor unfair.
This is the view taken by Governor
Cummins. In his testimony before the
Senate Committee on Interstate Com
merce in Washington, May IL. 1905
he said: II think that, under
standing and recognizing the un
certainty of revenue, rail
way company should be permitted tC
earn at least Z per cent as conditions
are now. Assuming that 5 per cent
we will say, is fair interest OH un
doubted securities. l believe that il
order to guard against the uncertain
ties of railway operation there should
be the opportunity to earn 7 pei
cent Governmental regulation OF
rates is bound to result in partial par
alysis to the great system of mileage
built up by private enterprise. For this
miIeage, which totals 2S3. .S2l, private
enterprise paid Sl2, 794, sO6, O23. Ii
this aggregation of invested wealth
S27, sl5 persons share, according to the
Interstate Commerce Commission re
port of February "a, 1904.
Directly employed by the railwa,
companies are nearly l,50c, 600 per
sons. Added to these are 1000, O0t
more to whose support the railways
contribute. In actual figures the sun
of $775, 32l, ,415 was paid out to labor
by the railroads in 1908. or 40.S pei
cent of the companies gross earn
ings. ,.,....
Twantytiya million dollars n,