The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1909-05-13
AND CONTROL OF RAILWAY
Address Delivered by F. Delan
Commercial Club 0 lambda Mo, MARCHES

Of course, it may be argued that a con-
siderable expansion in business can be
taken care of without an expansion in
facilities; and while this is true in
certain directions, 1t Is not true as a
whole when the more exacti--. de-
mands in regard to quality of service.
the betterment of conditions, etc., are
taken into consideration. 1t is also
true that as the country develops and
becomes more thickly settled, the very
factors which produce the increased
business also tend to an appreciation
of the values of all property, and make
the extension OF the railroad facilities
more and more costly, particularly in
the cong districts, where such ex-
tensions are most necessary. If, then,
this estimate is correct one, it means
that there should be spent on the rail-
roads of the country in every year a
sum aggregating not less than six
hundred and fifty millions of dollars,
this being five per cent on the estl-
mated present value of railroad facili-
ties of the country. So vast sum Of
money as this can only be raised on
credit; and credit, as every one knows,
depends wholly on the faith of the
community in the ability of the Dor
rover to repay the loan with interest,
or, in other words, to make good"
In the last three wears we have seen
in this country most astonishing de-
cli~e in railroad credit. To under
stand the reasons for this, one must
have been close observer of the con-
ditions and close student of the facts.
You may permit me to call attention
to these in general way.
AS already explained, the growth of
all business from 1897 to 1907, due to
period of unexampled prosperity fol-
lowing four years of depression, was
quite extraordinary. The traffic of the
railroads increased enormously, and in
order to increase their facilities COM
roads themselves were large borrow
ers of money, spending it chiefly for
improvements and betterments. AS al
ready pointed out, the growth of the
traffic during this period was at rate
something like twice the average or
normal rate for long period of time.
Facilities were overtaxed; congestion
of traffic occurred; and, worst of all,
disposition to criticise railroads and
railroad methods increased to point
where it showed itself in all sorts of
adverse legislation. A we'll known
railroad official is authority for the
statement that during the legislative
year of 1906-1907, over 500 bills affect
in railroads were introduced in the
eleven states of the central west in
the federal congress-all Of them
seeking to regulate, restrict, define, or
lay down the method Of railroad man
agement. OF course, this was the eli
max of a condition, the blame for
which all sections of the community
must share; and | would neither con-
tend that the railroad men were blame
less, nor that the feeling of hostility
to the railroads was without any justi-
fication.
simultaneously with this condition
there had been rapid advance In
wages of labor. a rapid advance in
the cost of material, and consequent
advance in the cost of transportation,
which made it impossible for the rail-
roads, even with the largely Increased
volume of business, to make anything
like commensurate increase IN pro-
fits The creditor whom we may say
was represented by the banker and IN
weston in the large trade centers, nav
ing control of loanable funds both
in this country and abroad, began to
! take alarm. He saw the storm gath
ing control of the loanable funds both
in the rapid increase of operating ex'
penses. He began to withhold funds
! and to make his terms more onerous
| to the borrower. This had the erect
of course, of checking work; and IL
! it had not been for serious bank rail-
ure in New York City. might have
been effective in bringing about a
/ gradual depression without sudden
panic However that may be, for rea
! sons which it is hardly necessary fol
me to discuss fully here, sudden
break in our prosperity came In Octo
Der, 1907. l am glad to say that since
that time there has been a pretty
satisfactory restoration of confidence
especially in the west, but the fact re
mains that business continues to be on
scale far smaller than it was before
the panic.
Note.-As is well known, these con
ditions are not confined to this coun
try. but are quite worldwide in theil
extent While the rapid railroad. min
1 ing and industrial expansion in this
country was one of the important
causes, the wars In Africa and Russia
ar the industrial expansion in Ger
many were all contributing causes in
producing this worldwide condition
the fundamental trouble being that the
growth of expenditures has been more
rapid than production OF wealth.
What | am most interested in dis
cussing this evening and pointing out
to you is the immense demands or