The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-07-01
President Taft Has a b.
Question to Handle
CONTROVERSY ON PROFITS
railroads Contend Tint Increased Sal
aries to Employees Cuts of Nearly
All Profits While shippers
Deny This Statement

New York, June 0-lSpecial. }-FerhdPs
the biggest business que<tion to be set
tied in the near future is the controversy
between railroads and shippers as TO What
constitute fair freight rates, the settle
ment of which has been temporarily post
poned by President Taft When the in
terstate commerce commission takes up
this question, which it probably will be N
shape to do within few months, 1t Is
going to find 1t about as tough propo-
sltion as any aggregation of gentlemen
ever tackled.
RaiiYsad men point to the fact that
their expenses have very greatly In
creased, and they have perfect right
to increase their income to cover this
loss Shippers allege 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 have recently been published.
According to the Chronicle 4S rail-
roads report gross earnings for May Of
| $50, ,439, 775, an increase of $s,T2n1, or 49,
per cent, as compared with the corre-
| spending period a year ago. While the
returns of railroad gross earnings are
not conclusive as to the prosperity of the
trade and business of the country, in
dicating great activity. Even as to the
roads themselves, the continued growth in
their gross revenue is an extremely graf
flying feature, showing as 1t does that
new income is coming in to offset, in part
at least, the great rise in expenses.
| Then B. B. Burgunder of Baltimore, in
an article for the current number of
the Annals of the American Academy OF
the values of the various rights which
| have been given to stockholders of se-
ected list of leading rairoai snd in
dustrial corporations be taken into con-
sideration they have received net return
| on their investments of from to SO pei
cent after allowing per cent interest
| on the original cost of such rights. In
| only two instances of the large corpor-
ations which have issued rights to their
stockholders have the results been un-
profitable to the latter. The shareholders
of the Cleveland, Cincinnati. Chicago and
-St. Louis (Big Four railway has sus-
tained an actual loss of about 3.4 per
cent per annum by taking advantage
of the stock allotment made to them in
1905, while Missouri Pacific shareholders
have received only about Is of 1 per
| cent per annum on their investment.
| These are exceptional instances.
The most remarkable examples of the
value of the stock allotments and other
| rights usually termed 'melons''-re-
ceived by the owners of various corpora
tions In the Great Northern railway. Mr..
Mr. Burgunder shows that upon stock
bought in 1898, the day before the first
distribution of rights by his company was
made, and If succeeding allotments had
been taken up and paid for with money
borrowed at per cent interest, the net
income on the original cost would now be
80. 113 per cent per annum. Another strik-
ing instance is the Canadian Pacific rail-
way, whose shareholders on a first in
vestment of 1901 have received an annual
| net return of %. 0S per cent. The United
Gas Improvement company is the most
prominent among Industrial corporations
for this sort of extra distribution. and the
net return on an original investment in
1896, just before the first rights were is
sued. is now .6So per cent per annum
All this is after allowing interest at the
rate of s per cent FOR the cost of the
various allotments to date.
Some interesting facts about passenger
traffic have been compiled by the rail-
roads In connection with the general
advance In passenger rates. These show
that passenger traffic last year involved
% per cent OF revenue of all railroads
Requires 46.o26 cars. an increase of 81
per cent in 10 years.
Number of passenger miles increa ses
los per cent in 10 years.
Revenue per passenger mile decreases
liza per cent In same period.
Passengers are given faster trains, more
expensive cars, block signals, better
track and better facilities.
At preesnt rate per passenger mile net
revenue is not sufficient 10 pay interest
on cost Of equipment and facilities. omit
ting track and general expense.
Under 2-cent fare laws passenger re-
ceipts are less In 1909 than In 1907. while
service performed is per cent greater.
Much passenger business conducted at
less than cost.
1t is easy to see that the members of
the interstate commerce commission are
going to earn their salaries and to come
In for their full share of cursng In the
near future.
The Rock Island intends to organize
a settlders' ndustrial-agricutural depart
ment and has rendered the chief position
In the organization to Prof. H. N Cot
trell, who recently resigned as director
of farmers institute work in Colorado
expecting to take up the directorship of
the state experiment station.
The Rock Island has 1900 miles of line
in its territory. and every agricultural
problem has to be met. 1t covers not only
the corn but the winter and spring wheat
sections. as well as the cotton belt and the
rice-growing sections. The company al
ready has an immigration bureau employ
ing 5000 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 a booster for the particular
section, in which he locates.
The commissioner will be expected to
organize a correspondence bureau through
which questions put by prospective set
tiers will be intelligently answered; to or
ganze a bulletin and pamphlet service:
arrange for cooperation between the bu.
rea,i and agricultural colleges and ex-
pertinent stations of 10 states; arrange
for lectures, farmers Institutes and spe-
cial institute trains: cooperate with the
rr.nNnuN uyyrn nv - AsaH IN