The Dickinson press., 1905-05-20
Where Does the Money Go?

Where Does the Money Go?
Slason Thompson Of the Chicago Cen
eral Managers association, one Of the
best known transportation experts in the
United States. has prepared an interest
ing statement showing where the i'm
mense gross earnings Of American rail-
ways. now nearly two billions Of dollars
a year, actually goes.
The statement was suggested to MI.
Thompson by the charge made during
recent adverse criticism Of the railways
that an undue proportion OF their earn
ings goes into the pockets OF their share.
holders.
During the year 1903, the last for
which complete figures are obtainable,
MIR. Thompson finds that the railways
earned a total of s1,ooo,846,oo7 out Of
which $775,321,4l5 was paid out to en-
ployes in salaries and wages. Fuel for
locomotives, n Of the largest of the
items of cost OF railway operation,
amounted to sl4o,5oo,o3I. Railway
trackmen, the largest single class Of
railway labor, received %s1o3,426.685 in
wages, or 1884 per cen of the total sum
spent for labor. Common laborers and
shop men come next in order, each class
receiving during the year more than
sS4,ooo,ooo Taxes paid by the rail-
uyouc 1rrSnr fho ,,o,r ,p,0,,&aI -
s~58.846,56o and the building and re-
pairing of freight and passenger cars,
locomotives and other equipment, re-
newals, bridges, ties, ballast, rails and
buildings, represent an additional total
expenditure of sIo2,ooo,ooo. Loss and
damage, and payment of personal
injury claims represent s28,ooo,ooo
more.
These are only a few items in a list
of expenses surprisingly long. Some OF
the other items worthy of attention show
that train and station supplies cost the
railways s~27,85o,66o, that stationery and
printing cost them sI1,232,465 and that
S5,376,368 was spent for advertising.
Out of the total of nearly two billions
of dollars, dividends took sl66, 49, $50.
An interesting fact is that labor, fuel
and taxes absorb more than half of the
total earnings. Capital absorbed less
than one-fourth. Mr.. Thompson's sta
%tistics show that while in the United
States the demands-o labor alone took
4o.S per cen of the total earnings, in
Germany during the same year labor
received but 1874 per cent. On English
lines labor received but 27.3 per cent
Capitals share in the United States was
23.4 per cent, while in Germany it was
3s.2 per cent, in England 38.2 per cent
and in other foreign countries equally
high.
Mr.. Thompson charges to capitals
share the total dividend payments and
interest on bonds.
Similar, but incomplete compilations
of figures for 1904 show that last ear
labor absorbed slightly more than AZ rer
cent OF the total earnings of the rail.
ways. Commenting on these figures
Mr.. Thompson says:
"My investigation of foreign railways
leads to several surprises. In the
United States the railway day laborel
receives an average of s1.31 a day. In
the United Kingdom he receives n
cents, on the state railways Of Germany
81 cents, on the state railways of France
81 cents, on the state railways of Bel,
gium 48 cents, on the Italian state rail.
ways AZ cents. in Russia 20 cents and in
India but 8 cents.
"~Enginemen in the United States
average s4.o1 a day. In England they
get sI.62 and in Belgium s1.o1. Ir
each of the other principal classes Of
labor, pay IN the United States stands in
the same relation to pay abroad. Oul
railways hire better men and pay them
better wages than any other railways in
the world.
ut is only recently that American
railways have been profitable as invest.
ments. For twelve years, from 1880 tc
1899. $50 per cent of American railway
stock paid no dividends whatevery.
Not until 1901 did a majority of railway
stocks pay dividends. Even last year
43o4 per cent paid nothing whatever.
This period of hard times and no divi.
dends has effectually squeezed the
water out of railway stocks. Capitalize.
ton is sl2,5o9,ooo,25S and of this amount
the railways own s2,3l8,3oI,o53 giving
net capital (1oo3) of s1o,2SI,5o8,3o5
The total cost of American railways to
1903 was slo,o73,5o4;9o3 which is con.
siderably in excess Of the net railway
capital and does not include ~s874,ooo,ooc
spent during the past four years for
locomotives, passenger and freight cars
and other equipment"
With reference to the present move
ment looking towards more drastic
regulation of the railways, MI. Thomp.
son says:
"There is law enough now-if it is
enforced. People talk of the evils Of
railway rebates without remembering
that there is the strictest kind of anti.
rebate law now in force.
"What is needed is not more law, but
the enforcement of the good law we
already have. Present laws are sufi'
Gent"