Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1908-07-25
HENRY CLEWS ON RATES
Proposed Increase of Freight Tariffs
Draws Significant Comment from
New York Finuncier.

Henry Clews & Co, In their Wall
street letter have the following of in
terest to say relative to the much
mooted question of advance in freight
rates:
Whether the proposed advance of 10
per cent in freight rates is being used
as part of a big stock market specula-
ton or not remains TO be seen. 1t is
very certain that an advance of this
amount in freight rates alone would
add enormously to the revenue of the
railroads. According TO "Poor's Man
ual' the freight earnings of American
railroads last year We're s1,s25. 00o, 900.
Ten per cent of this amount would
mean over $3.50 600 increase in rev.
eune. Net earnings last year on freight
and passengers amounted to 1923, 900.
II is but reasonable to expect that the
volume of traffic will shortly begin to
increase; in fact, II has done so already
as shown by the smaller number of idle
cars. The railroads have already put
into effect many important economies,
and while expenses had been enormous
ly increased by high wages, and high
materials, still the roads should now
be receiving the benefit of improve
ments made for economical results. OF
course the railroads would soon be in a
critical position IL present conditions
We're maintained, What with OUTLAWS
forced upon the railroads. partly TO
satisfy public opinion. and partly to
meet the obligations of growing traffic,
and what with the growing difficulties
of suitable financing the roads; IT. must
hnf
have grave problems with which 10
deal The railroad question. however.
is a many sided one. and cannot be set
tied purely from the railroad stand
point. Public interests will have to be
considered, and 1t Will also have TO
be recognized that an advance in
freight rates Is not the most likely
method of stimulating a revival in traf-
nc, which after all is the one thing
really needed. If the advances In rates
now contemplated are really put into
effect and maintained, the year 1909
may easily become far more profitable
one for the railroads than even 1907.
should these plans be successful, 1t is
evident that the railroad business
would be placed upon a much more
profitable basis than heretofore. that
dividends would quickly recover from
recent losses and that this advance
would be utilized as the basis OF a
huge speculation. Such result would
be welcomed by the speculative ele-
inents, put would be exceedingly dis
tasteful To the more conservative class
es In both business and financial
circles II cannot be ignored that
higher rates would dapress and not
stimulate traffic; and the effect OF such
action upon public opinion might prove
dangerous In the extreme, especially in
face of political campaign. III the
te1 ri n l,sa
per cent instead OF 10 per cent for
the purpose OF helping them out OF
purely temporary difficulties, and
agreed 10 return 10 the old level a.
soon as conditions permitted, there
would be little complaint. Our railroad
magnates are not yet philanthropists:
and though generally large minded far
sighted and very able men, there are
Few among them who could be depend
ed upon TO resist the temptation OF
such great speculative opportunity A
movement that contemplates putting
railroad property on an even more pro-
htable basis than existed before the
panic, and is accompanied by an un-
paralleled accumulation OF idle funds
carries with 1t a speculative opportuni-
" OF the most dangerous sort. Its very
possibilities make IL highly inimical
To public welfare; and political opinion
WIN surely be strongly aroused against
the railroads, stirring up another wave
OF hostile legislation still moro radic-
al than the one now subsiding II is
TO be hoped the railroads viii carefully
consider the effects OF their present
movement which has been planned with
more earnestness and care than is gem
orally supposed. Railroad managers
are by no means a unit on the proposal,
and they viii certainly do well 10 pru-
IDENTIFY consider the consequences they
VIII bring down upon themselves by
inviting fierce speculative debauoh,
not TO mention another outbreak OF
public hostility that could only end in
injurious legislation ana act as fur
ther stimulus 10 the desire for gov
eminent ownership. The differences of
opinion between the various roads are
suggestive; especially between the New
York Central, which leads In the move
ment for advanced rates. and Its chief
rival, Pennsylvania. which opposes H.
The relative financial standing OF the
two corporations and the intense rival
~ between them for New York traffic
may easily become a factor OF import
snce In the rate question.