The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-08-11
High Rates Would Restore Good
Times.
Plan to Make Horizontal In
crease Is Defended.
TOO SMALL TO NOTICE
Consumers Would Scarcely OBJ
serve the Difference.
Other Items of Interest i'm Rail-
way Circles.

Alfred II. Milliken, president OF
Pettibone, Mulhken & Co., Chicago
dealers in railway supplies. has issued
statement defending the railroads in
their present position of demanding an
increase of freight rates, dealing espe-
cially with reference to their impor-
lance as factors in the return of pros
perity to the country.
Mr.. Pettibone disagrees with critics
who have blamed the roads for having
caused the recent panic by Initiating
values and manipulating stocks, and
says that the responsibility for the ad-
verse conditions must be placed on the
attacks upon railroad credit by the
government by state legislatures and
railway commissions.
After pointing out that the railways
are the second largest purchasers OF
labor and materials in the United
States, employing 20 per cent of their
gross earnings for these purposes, and
that within the last twelve months
they have increased their payments to
employees over 500 0OO, 900, he shows
that the dividends paid by all the rail-
roads in the United States in 1907 was
only 3.73 per cent. and the average
dividend during the last thirteen years
was less than az per cent a year, while
freight rates are lower in this country
than in any other and the capitalZa-
tion of the roads, $4,000 a mile, is less
than in any other country.
Mr.. Petttibone argues that, in order
to have a return of prosperity it is
necessary to permit the railroads to in
crease their revenues by an increase in
rates. A portion of the statement is al
follows:
What we all desire is prosperity
We cannot be prosperous If any large
interest among our people is suffering
and depressed.
THE proposed increase in freight
rates will not change any distributing
center, will make no difference in any
line of business to the people engaged
in it, 1t practically makes no differ
ence whether the freight rate on steel
from Pittsburg to Chicago is IS cents
hundred pounds or rs cents a hundred
pounds, provided every user pays the
same rate. But 1t makes an enormous
difference, not only to the steel inter-
est, but to business generally. If there
is only demand for so per cent of the
steel producing capacity of the coun-
try.
ITO meet the growth of the country
Il is necessary for the railways not
only to maintain their properties as
they are. but to improve them.
1.-THE credit of an Individual or of a
corporation is only improved by an in
crease in its net earnings The rail-
roads face this situation: Either re-
duce wages, increase freight rates. or
go into the hands of receivers and stop
all payments for interest and divi-
bends. The roads have been forced by
public opinion and by the administra-
ton, to advance wages, and by
the same are unable to reduce them.
They are, therefore, compelled to face
the other two alternatives.
I'VE know what would be the effect
of many roads going into the hands of
receivers. The only alternative, there
fore, is to advance freight rates
throughout the country.
This advance will eventually fall
upon the consumer. but it will be so
small that he will not notice it. For
Instance: A 10 per cent horizontal in
crease in freight rates would hardly be
known by any consumer This in
crease on a suit of clothes from New
York to Chicago would be less than l
cent a suit, on pair of shoes from
Boston to Chicago less than II cent d
pair. on a derby hat from New York
to Chicago less than 1-3 cent a hat To
the railroads it would mean an in
crease of s14O.0OO.OOO to s15O,OO0,OOO in
earnings per year"