Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1910-06-26
QUESTION OF FREIGHT RATES
Spirited Controversy Between Roads
and Shippers.
PROBLEM HARD TO SOLVE
Traffic Managers Point 60 Increased
Living Expenses Rs an EX-
cuse for Increase of
Tariffs.
BY PRESTON c. ADAMS

NEW YORK, June 25.-(Special Dispatch
to The Bee )-Pcrhaps the biggest business
question to be settled in the near future
is the controversy between railroads and
shippers as to what constitute fair freight
rates, the settlement of which has been
temporarily postponed by President tart
When the Interstate Commerce commission
takes up tins question, when IL probably
will be IN shape 20 do within Few months
osition as any aggregation OF gentlemen
ever tackled.
Railroad men point to the fact that their
expenses have very greatly increased and
they have a perfect right 10 increase their
income to cover this loss. Shippers alcge
that the railroads are making money at
present rates and should not be permitted
to advance rates. So there you are.
In this connection some interesting fig
ures recently have been published.
According to the Chronicle forty-eight
railroads report gross earnings for May Of
S6O 43S.,75, an increase of S.u2l, or l6.S
per cent, as compared with the correspond
ing period a year ago. While the returns
of railroad gross earnings are not con-
elusive as to the prosperity OF the trade
and business of the country, they indicate
great activity. Even as to the roads them
selves the continued growth in their gross
revenue is an extremely gratifying feature,
showing as it does that new income isDcom-
ing in to offset, IN part at least, the great
rise in expenses.
Then Il. IS buryunder OF Baltimore, in
an article for the current number of the
Annals of the American Academy of Po-
nrcal and Social Science, shows that IL
have been given to stockholders
or IA selected INST Of leading railroad
and industrial corporations be taken
into consideration, they have received a
net return on their investments of from o
to 80 per cent, after allowing . per cent in
terest on the original cost OF such rights.
In only two instances OF the large corpora
tons which nave issued rights" to their
stockholders nave the results been unprof-
the Cleveland Cincinnati, Chicago a. St
Louis, or the Big -Four railway, have sus-
tanned an actual loss OF about "a per cent
per annum by taking advantage of the
stock allotment made to them In 1905, while
Missouri Pacific shareholders have received
only about three-eghts OF / per cent per
annum on their investment These are ex-
ceptiOnal instances.
the most remarkable examples of the
value of the stock allotments and other
Enthusiastically termed "melons'-was re-
ceived by the owners of various corpora
tons in the Great Northern railway Mr..
buIgunder shows that upon stock bought
in 1893, the day before the first distribution
of rights by this company was made, and
If succeeding alotments had been taken
up and paid for with money borrowed at
b per cent interest the net income on the
original cost would now be 80. 113 per cent
per annum Another striking instance Is
the Canadian Pacific railway whose share
holders on first investment of 1901 have
received an annual net return of 25.O3 per
cnt. The United Gas Improvement COM
pan%-lS the most prominent among indus
trial corporations for this sort of extra
distribution, and the net return on an
first rights were issued, is now 10 665 per
cent per annum All this is after allowing
interest at the rate OF per cent for the
cost of the various allotments to date
Some interesting facts about passenger
traffic have been compiled by the railroads
IN connection with the general advance in
passenger rates. These show that passen-
ger traffic last year involved % per cent
vi revenue of all railroads.
Requires 5000 cars, increase Of 81 per
cent in ten years
Number of passenger miles increases 155
per cent in ten years.
Revenue per passenger mile decreases liz
per cent in same period.
Passengers are gwen faster trains more
expensive cars, block signals, better tracks
and better facilities.
AT present rate per passenger mile, net
revenue is not sufficient to pay interest
on cost of equipment and facilities emitting
track and general expense
Under 2-cent fare laws, passenger re-
celpts were less in 1903 than in 1907; while
service performed is per cent greater.
Much passenger business was conducted
at less than cost.
1t Is easy to see that the members of the
Interstate Commerce commissions are going
TO earn their salary and to come in for their
tull snare or eursing in the near future.
The Rock Island intends to organize a
settlers industrial agricultural department
and has rendered the chief position in the
organization to Prof ii. N. Cotrrell, who
recently resigned as director OF farmers
institute work in Colorado, expecting to
take up the dictatorship of the state expert
ment station.
The Rock Island has 1850 miles of line,
ana IN It's territory every agricultural PROB
lem has to be met; it covers not only the
corn, but the winter and spring wheat sec
tons, as well as the cotton belt and the
rlce-SroWing sections. The company al
ready has an immigration bureau, employ
Ing 1900 agents. Each family located by
them is to come under the personal care OF
the new agricultural commissioner, and
must be converted through practical re-
suits into booster for the particular sec
ton in which he locates.
The commissioner win be expected to Or
ganlze n correspondence bureau, through
which questions put by prospective settlers
will be intelligently answered; TO organize
bulletin and pamphlet service; arrange
for cooperation between the bureau and
agricultural colleges and experiment sta
lions OF thirteen states; arrange for lee
lures, farmers institutes and special insti-
tute trains; cooperate with the United
States Department Of Agriculture experts;
arrange for publication in agricultural news
papers of articles that will benefit Rock
Island settlers; prepare articles to be used
by country weeklies and dailies, and pub