The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1908-07-21
RAILROAD RATES

AAe@e Oh VI the prominent nnancferS
OF the country are not of the opinion
that the railroads will have to. or
should. increase their rates ten per
cent In order to meet the conditions
which now confront them. is evidenced
by the current weekly letter of Henry
Clews, the eminent New York banker
and broker. Mr.. Clews is one of the
men most interested in the maintain
ance of firm standard by the securi-
ties OF the country, of which the rail-
road stocks and bonds form the larger
part. If bankruptcy is confronting
the railroads unless they raise their
rates, as some men would like to
have the people believe, Mr.. Clews
and his business interests would be
hit quite as hard in the decline in value
or American securities which would
follow such a calamity as would any
other man. For these reasons, If for
no other his ideas in the premises are
worthy of consideration.
As matter of fact he is inclined
to think that there is considerable
buncombe in the agitation among GER
tain railroad magnates for increased
railroad rates as is made apparent
~ StdtCHhcAl VI his w neIner
the proposed advance of 10 per cent
in freight rates is being used as part
Of big stock market speculation or
not remains to be SEEM And con-
tinuing a discussion of the question he
writes: 1T is very certain that an
advance of this amount In freight
rates alone would add enormously to
the revenue of the railroads Accord
ing to 'Poor's Manual the freight
earnings of American railroads last
year were $1,S25. 100000. Ten per
cent of this amount would mean over
$3.50, 000,0 900 increase in revenue. Net
earnings last year on freight and pas
sengers amounted to 1923, 100000. 1t
is but reasonable to expect that the
volume of traffic will shortly begin
to increase; in fact, it has done so al
ready as shown by the smaller num-
Der of idle cars. The railroads have
already put into effect many impor-
tant economies and while expenses
had been enormously increased by
high wages. and high materials, still
the roads should now be receiving the
benefit of improvements made for eco
nomical results. OF course the rail-
roads would soon be in a critical po-
sition If present conditions were
maintained. What with outlays fore
ed upon the railroads, partly to salts
fly public opinion, and partly to meet
the obligations of growing traffic, and
what with the growing difficulties of
| suitably financing the roads; it must
be conceded that railroad managers
have grave problems with which to
deal. The railroad question, however,
| is a many sided one, and cannot be
settled purely from the railroad
standpoint. Public interests will have
to be considered, and it will also have
to be recognized that an advance in
| freight rates is not the most likely
method of stimulating a revival in
| traffic, 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 a far more
profitable one for the railroads than
even 1907. Should these plans be
successful. 1t is evident that the rail-
road business would be placed upon
much more profitable basis than
| heretofore, that dividends would
quickly recover from recent losses,
and that this advance would be utiliz-
ed as the basis of huge speculation.
Such a result would be welcomed by
the speculative elements, but would be
exceedingly distasteful to the more
conservative classes in both business
and financial circles. 1t cannot be ig-
nored that higher rates would depress
and not stimulate traffic; and the eff
feet of such action upon public opin-
ion might prove dangerous in the ex-
treme. especially in face of political
campaign. If the roads temporarily
advanced rates, say, per cent instead