The silver state news. [volume] (Winnemucca, Nev.) 1907-1909, 1908-11-21

course be passed upon by commissions
and courts. and in the not far distant
future-as measured by the life of our
nation-we shall nave a system or body
of rates that will not provoke bitter
contention between shippers M car
riers. though the usual contention be-
tween buyer and seller will not cease.
But with all possible improvements In
existing railroads, the material devel-
opment of our western states Will re-
oitire and demand much, very much
new construction. Much of this new
construction. as well as the improve
ments of existing lines, is now or has
been on the drafting boards. The
building waits only on an easier money
market and the revival of business,
which is sure to come if you, and those
who must construct and manage these
roads are cooperative in a good bus
mess sense. If we shall look forward
a generation there are thousands or
miles of new railroad in prospective
demand.
The construction of a railroad any.
where requires vast expenditures OF
money. In our country, bordered by
two great oceans, which are separator
bv more than 5000 miles of the most
varying physical conditions OF land
and climate to be found on any CONT
nent, this capital expenditure with re-
spect to the transcontinental roads In
particular was not only necessariiv
large in the first instance, but the rapid
growth of population and industry
since the first rail was laid called for
renewals and changes and extensions
approximating the original capitahza-
ton. The cost of maintenance has
naturally increased, but the cost OF
operation has not been reduced in pro.
portion to the expenditures made for
the purpose of reducing it. More than
one OF the corporations owning a trans
continental line have experienced
bankruptcy and been ~reorganized-
some Of them more than once. All
have at times faced great financial
distress. Dividends equal to the going
rate of interest for .ong loans on gilt
edged securities have been a recent
experience to them. Thanks TO the
wonderful growth in population, the
vastness of the hidden wealth of forest
and stream, of mountain and plain,
which needed only the magic touch of
labor and capital to manifest itself, ]
think we are out of our troubles. The
treasure is there. Our problem is to
gather it without waste.
But as you all know. or may infer
from what | have said, while the prob
lens of the past have been measuraDly
solved. we are facing a new one that
is just as insistent in the minds of the
f~ar-sighted men as was the building "
the first transcontinental line in the
mind of Benton and his eoadjutors
three generations ago. 1t is for more
and better railroad facilities in this
western country. The answer to this
demand waits on the necessary money,
which in volume viii run into the hun
dreds of millions OF dollars. For rea-
sons which you all understand, many
Of you better than / do, capital has be-
come ehary OF railroad investment.
Perhaps the reason most effective in
restraining the investor is the fear OF
unreasonable limitation by the public
upon the returns from the investment.
The history of our railroads shows
that the stockholders usually have
been disappointed by the returns they
have received. Statistics of the de-
partment of agriculture, of the bureau
of the census and OF the interstate com.
meree commission show that in 1900
the farmers Of this country received a
return of 3 per cent upon the value of
their farms in that year, that manu-
faeturers enjoyed in the same year a
net return of 1874 per cent, while the
average net returns upon railroads was
only 1 per cent. The same statistics
show that in 1905 the average net re-
turn of the farmers was 9.e per cent,
and of the manufacturer Is per cent,
while the average return upon raIi
road capital was but "A per per cent.
These We're years of prosperity. In
vestors in railroads west of the Mis-
sissippi usually have not done SO well.
In that year, 1905, the Atehison, To.
peka & Santa Fe railway paid divi-
bends at the rate of 4 per cent, the
Northern Pacific Z per cent, the South.
ern Pacific none, the Great Northern
~ per cent. The average dividend
Of the Atchison, Topeka 4 Santa Fe
in the years from 1ss2 TO 1906 was 2.s
per cent. The average dividend of the
Northern Pacific in the years from 1883
to 1906 was % per cent. The average
dividend of the Southern Pacific in the
years from 1855 to 1906 was / per
cent. The average dividend of the
Union Pacific in n years from 1854
to 1906 was l.5 per cent. The average
dividends of the Great Northern in the
years from 1890 to 1907 was s per
cent The highest average dividend
paid by any of these roads in the
periods referred 10 was only a little
more than one-half as much as the
American farmer made IN 1905, and the
lowest average dividend paid was only
o%ne-tenth as much
Gentlemen; We want, we need
the continuous growth and improve
ment of this wonderfully promising
territory demands-more railroads and
enlarged and improved facilities in the
existing roads. The expenditure neees-
sary to these ends are capital expendi.
lures. The needed money win be OBJ
tainable when confidence in the pro-
~duetiveness of railroad investments is
I restored. Whan q0-npara+.ou al -