Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1910-12-03
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was the time OF jay Gould ana Jim
Fiske ct nl., who used to carry the off,
ces Of the road around in their pockets,
and of old Dan Drew, whose printing
presses used to be run overtime turn
Ing out uncounted reams of stock The
new" IL the time OF the sober opera
l ton of the company by group of
highly efficient traffic men. handi-
capped, it Is true, by their legacy of
! mismanagement and Observation-Disclosures.
but striving with all the power that is
in them to make their great property
4 what it ought to be.
| When the present management came
| In, few years after the reorganization,
1t was tremendous task with witch
they found themselves faced. On its
record. people Ind no faith in the Erie.
| Its credit was gone. It's equipment and
| It's road-bcd were in lamentabe condi-
| ton. Worse than that the new man
agement soon enough came to find how
| difficult was economical operation OF
a line whose rails had been laid along
the route offering the largest subscrip-
| tons instead OF the least grade resist
ance. TO build the necessary cut-offs,
and to eliminate the killing grades on
this up-hll and down-dale route was
possible enough but required money
lots of it. That the company did not
have and could not borrow. Capitaliza-
| ton and capital are two mighty diff
| ferent things. The company had
| plenty of the former but lack Of the
latter on more than one occasion during
| those early years of the reorganization
came pcrilously near sending the whole
| property back into bankruptcy
AS lately as only three years ago.
| indeed, lack Of working capital came
near bringing to naught all that the
| new management has done for the
property and ,throwlng 1t into receivers
| hands. The panic hit the Erie par
ticularly hard Gross earnings fell off
tremendously while expenses increased.
| Between that upper and neither mill,
sl5.17i,O0O in 1907. fell off to s10,2l7.oOO
in 1908. With a big issue of short
term notes coming due. 1t looked very
squally for time. But Mt the very
moment of danger strong financial in
terests stepped In and provided the nee
essary cash.
How well justified they were in their
judgment that the road ought to be
pulled through Is seen in the remark
able earnings shown since that time.
Proba bly, there Is not another road in
the country that can show so complete
n Observation-Disclosures In condition and out
look during the past couple OF years as
can the Erie For the year ending
June. 1908. there had been deficit OF
months gross earnings were so in
creased and expenses We're SO cut down
that instead OF q deficit the road had
surplus of S2.5GG,000 And during the
next fiscal year. ending June. 1910. the
recovery was carried still further. Gross
earnings reached the surprising total of
S54,S66.O0o. while operating expenses
were only very slightly increased. The
result was that total net income ex-
.cecded twenty million dollars as against
less than twelve million in 1908. and
that the years operations ended in the
addition to surplus of the tidy sum OF
s5,O69,457.
by such Il demonstration of earning
power during q time when all was by
no means sunshine for the other roads.
the question Is squarely raised as to
whether the Erie has not turned a COR
ner and entered new phase of its ex-
istencc. Handicapped. It Is true. have
been its managers by the lack OF work
Ing capital. but by stripping clean
every bone and making every dol
lar do one hundred cents worth
of work. that difficulty has been large
~ overcome and Improvements eff
fected which. under the circumstances.
are little short of marvellous. Judging
from the way earnings have been run
ming during the past few years, the
back of the difficulty has been broken,
and what has been done for the proper
ty Is about to bear fruit.
In deciding whether or not that is so.
there must be continually kept in mind
the fact that there are, 80 to speak,
two Erics-the physical Erie. whose
strides forward during the past couple
of years are recognized throughout the
railroad world and the financial Erie,
which still remains n serious handicap
\ n mo- i,er nf bn ct,ff
from the top to the bottom.
Considering first the physical Erie,
q glance at what has been done during
the past few years in the way of build
Ing cut-offs and bringing about grade
reductions. is all that is necessary to
see how alive the management is to the
necessity Of striking at the very root
of the difficulty by which they have
been all along bcset. Competition on
even terms with such roads as Now
York Central and I.ehish Valley. It was
realized, was impossible as long as such
grades as existed ut several places on
the main line remained to block traffic
and increase expenses. On the direct
line from New York to Buffalo some OF
these grades ran as high MS 1Ia per cent
The most powerful Mallet engines ever
built We're necessary to haul coal-trains
over the hills Mt Port Jervis and Sus-
suuetitiillu, ana Ut lnut Tess IMAM Oh cars
per train could be handled. To elm
mate these grades. or at least to re-
ducc them to something like an equal
ity with grades on competitive lines,
was Il tremendous undertaking, but one
which tho management realized from
the start was the sine qua non for sue
cessfu! oncration of the property. The
work therefore, was undertaken with
Will: and, while much still remains to
he done. some really remarkable results
have already been achieved
Most important of these great works Is
the Guymard cutoff, which leaves tn,
main line half way between Middleton
and Port Jervis and reaches the New
burg branch ut Highland Mills. Pierre
Ing the mountains at one point with a
mile-long tunnel, and built according
to tho most modern ideas, this piece OF
double-track road is making big diff
florence In Er!c's operations. East
bound Its grade Is 10 per cent MS
against liza per cent on the main line:
west bound 1t is $40 per cent as
against lie per cent. AS n result of
this grade reduction, tho castbounl
trainload has been Increased from
1000 tons to 3,720 tons, and the west
bound trainload from 1000 tons to
1900 tons. To put 1t differently. where
the former limit was so cars to a train
So and 90 car trains ara now possible
compished by the building OF the
oGenesee cutoff out In the western part
of the state. where the, so-cnlled Cuba
Hill Summit and the Tip Top, long
an effective bar to economical oper-
alton, have been eliminated. Study of
the figures here again shows how the
cutting out of these impossible grades