The Marion daily mirror. (Marion, Ohio) 1892-1912, 1908-08-24
RAILROAD PROBLEM
| HALTS PROSPERITY
Present Situation of Carriers
! Most important Factor In
Business Recovery.
Manner In Which Freight Rate Prob
lem 10 Solved Will Decide Fate OF
Rosds, Chicago Authority Says.

AlIreu III. Mulllken, president OF ret
tibone, Mulliken & Co. of Chicago, one
of the best posted men In the country
ON railroad topics, has made public
statement In which he says:
Every man In the United States who
Is Interested in the return and main
tenance Of prosperity is asked to con-
slider carefully the following facts.
Although the recent adversely came
when the prosperity of the railroads
was most pronounced, 1t was due to
the attacks upon them, which com
PEELED the roads to stop all expendi-
lures for improvement, as this attack
upon their credit made 1t impossible
for them to sell bonds or obtain money.
The panic of 1907 was caused by the
attack upon railway credit, which Gre
nted fear in the minds of the people
which led them to distrust all securl-
ties. But. putting aside railroad his
tory. we are now faced by condition,
not by the past.
- All Desire Prosperity.
What we all desire is prosperity. We
cannot be prosperous IL any large In
terest among our people is suffering
and depressed. The credit of an in
divldual or of corporation is only i'm
proved by an increase in their net
earnings. The railroad expenses have
eased In the one item of labor alone
$100,000,000 in the last twelve months.
They face this situations: Either reduce
wages, increase freight rates or go
into the hands of receivers aud stop all
payments for interest and dividends
The roads have been forced by public
opinion and by the administration to
advance wages and by the same are
unable to reduce them. They are there.
fore compelled TO face the other two
alternatives.
We know what would be the effect of
many roads going into the hands of
receivers. The only practicable alter
native, therefore, is to advance freight
rates throughout the country.
Increases Not Felt by Consumers.
This advance will eventually fall
upon the consumer, but it will be so
small that he will not notice 1t. For
instance, q 10 per cent horizontal In
crease in freight rates would hardly
he known by any consumer. This in
crease on suit of clothes from New
York TO Chicago would be less than l
cent per suit, on n pair of shoes from
Boston to Chicago less than half cent
per pair, on derby hat from New
Horli to Chicago less than one-thlrd of
a cent per hat To the railroads II
would mean an increase of $140,000,000
to $150,000,000 in earnings per year.
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
I'm 1t. But 1t makes an enormous diff.
ference, not only TO the steel interest
for example, but to business generally
If there is demand for only 80 pei
cent of the steel producing capacity OF
the country.
The Carriers as Buyers.
r The railroads consume so per cent
of the iron and steel manufactured in
this country and the moment railroad
buying ceased activity in the steel
mills diminished and business gener.
ally was impaired.
. The railways are the second largest
purchasers Of everything In the United
: States. Seventy per cent of their earn.
ings are Immediately distributed fol-
labor and material. Within the last
twelve months they have Increased
their payments to their employees oven
$100,000,000. Does any one think that
this $l00,000,000 Is not benefit TO the
people?
Dividends paid by all the railroads in
the United States In 1901 the most
prosperous year, was 3.73 per cent
The average dividend per annum paid
by all railroads in the past thirteen
years was less than 2la per cent pei
year.
Our Roads Charge Lowest Rates.
Freight rates are lower in this coun
try than in any other, and the service
here Is much better than In any othel
region on earth.
The capitalization of the railroads II
the United States is lower than in any
ether country. The average is abou
$4,000 per mile in stocks and bonds
In France the average Is about $40,
600, in Germany about $4,000. il
England about $273,000 per mile, an(
one English road is capitalized at 5000,
3 600 per mile, on which 1t pays 4 pc
sent dividends.
On these high values the French rail
ways pay 4.3 per cent, the English
per cent and the German O1 per cent.
A reduction in freight rates below
fair return to the railroads does no
help any one
Railroad Prosperity Helps All.
1t is absolutely true that the rail
roads cannot prosper without helpini
the people. They do not hoard thei
earnings. AS stated above, 20 per cen
of their gross earnings are spent i'm
mediately for labor and materials.
If this advance in freight rates take
place II VIII improve the credit Of tn
railroads. 1t will enable them to sci
long time bouds ut fair rate of in
terest and to obtain money to properl
maintain and improve their properties
The railroads should be helped. no
hindered, In their efforts 70 keep on
of hanlxruntpY innrnNa thnir nronat