The sun. [volume] (New York [N.Y.]) 1833-1916, 1910-12-09

"a SIS 's%rINl SdF - NI o"'A aah'
bonds hat tho railrnad companies
shall have The ,re,iIr which Tan come
only from the yavmenr ~ reasonably
attractive dlvldenis On existing stoo 4
and the rpah1auou Of very substantial
surplus earning ~ addition.
The real question, rNereiore goes far
hevond any ,on'roverSy over traffic
rates between merchants and shippers
on the one hand and the transportation
/ companies IN The other. As Mr. HINES
saws before pro, eed!ng N his concrete
! Illustrations from experience
~ 0.Hn' '7rrrrs' IN rh~ cnus-r, alton and
devrlNn-'rni ~ -. roua,ry's Transportation go.
- reaches Gar beyond thrse classes 81 society,"
re inerrsts ~ railway labor 81 the Investors In
riiUAv securities. 81 the producers Of -,iva,
s.77.cs snd materials Il those corcer-c- IN me
'""an: up - TIE undcv-lored region. ~ 'ns
80 sn''v. md abo,- all else. ne interest, - a.
m" Teople In The extension ~ railway transnoT,a
tnn ana In the Increased con, -nlencs e-'rirnry
hnd safety 81 that uln>ports'iou. are f'rll..
inv oN.i
These general interests Of rhe PUB .r require
Fat railway companies should p- given N "pnoT
unity 80 r-''s'y t-',,ss' ant r'rtfs7f' y's
--'rSc' N ,h'-r -r,,rc properly o.' I',o ram
7trcJo'- ,g-plGs ~sr,r - basis FOR providing
the u'onsS neet-t for the nunuai irproN emrnt
and -insnN"u Of railway proper tlrs > IN Ae.r
an With The progress ~ civilization. the develop
went ~ rev irr-t tory snt the srrv-s - HoHlls
-ou and business
After his specific illustrations from the
history OF the Santa Re. in which most
readers will md novel material, ,or
thought on This subject Mr. Hn.Es
iormula'es IN" main idea derived from
facts IN This COM, 1anvs history:
nor hT- p4rpos. y, maintaining ,s- com
'Ah' r,1lt - az 10 enable I, to borrow ne
- ADDITIONAL amounts which Il nus borrow.
- condition nov Existing cannot he rne' By r--
furirg n, 'd"nds &C IN. COMMON sroc. 81 20
arori ".tnci>at surplus earnings ~ saens gpnn
me prop-r'' Adv Such course would hal- tire
s-e,.' =. rendering 'h- common s,oc. unsr'r,c.
49, ~ IN investment So IN impair -n- conpsny's
cr-ti and rr-vent It's borrowing 'h- capt al
TIA, {, needs Nor r,n N. contiuous b met BY
reducing capital Expenditures QUE Of surplus earn
logs Or Such srr, merely -as'poa-s ---d-t
vn'rH r. tr''-s rust 70 expended op' o, earnings
~ on ~ borrowed nooey
- brief 10 order ~ flLal tie tuncror II
Improvement ana -,-nSon- TIE cor n,Ev MAST
r,r eI-cie,r diyirena 90 ~. COMMON stock
- MAKE tha' s'ocs at-ricr',- a. an Investment
,u1 -,I" ~ 1tt''r- nsv- .rIcfci-r, s'.rpIu,
90 -rr-,1i-ir-s - -t- prrp-r'y These Two
essential conditions ~ 'n- rom psny's credit can,
co, r. Adequately net except nv . ,.5s'i-,'-I
lHc-'I's In the conrsnvs net revenues
That is. the point Of supreme impor-
lance IN the case not only of Mr. Illness
company but also OF every railroad
COMPANY is that the public interest
absolutely requires adequate railroad
credit Such credit il dependent upon
the payment OF a reasonably attractive
dividend and upon the continuing re-
alIzation Of an adequate surplus To
meet the rising tide OF expenses and the
increased burdens Of railway operation
the company must have increased reve-
MUGS if il is 20 fulfil the reasonable ex-
pectatlons of ,he public 40 TO the main
tenanoe. extension and Improvement Of
the service.
In its editorial reply to Mr. WALLER
D. Illness exposition Of the facts the
Outlook seems tn ooncede the force If
his arguments for substantial increases
IN rates unless the companies can in
crease their net income sufficiently by
greater efficiency of operation. The
Outlook quotes from Mr. HARRINGTON
lol
az Basis of Operation ands Wages.
wherein occurs the startling ass4vera-
ton that tho total amount of prevent
able material and labor wastes and
losses in American railroad operation
and maintenance approximates $500
O00. OOO a year
Full investigation will proha bly, dem
ons-rats that on an average the railroads
have done and are doing tar more IN
the direction of increased efficiency than
anv other lines Of industry. but that all
that has been saved and can be saved
IN the future by the means OF The most
successful efforts In this direction will
be- absorbed bv the increased expendl-
tire confronting the railroads and can
not remove the necessity for increased
rates. Mr.. EMERSON himself in his re-
cent testimony before the Interstate
Commerce Commission remarked in an
sw~r ~ a question as ~ 'he difference
between railroads and ether industries
in this respect. that the railroads are
fully up TO Il not ahead ~ the average
ability and probably ahead Of what they
were soma Years ago He msde -
plain rhar his Eiticism NJ lnefficienov
was not confined 70 the railroads. bur
that generally speaking all industrial
activity was inefficient. much of II dis
graceful. HIS testimony indicated thar
hs theory If applied would rev olution-
ia all brano hes ri industry. His claims
substantially amount 10 the proposition
that a perfect or ideal mana cement ri
AL the "a lrnads NJ the countrv would
"te". IN" SAVING suggested bv h'm
His rer'ect or deal management ~
,:snass. 80. !. :.
obvla'!ng an Increase Of rates. presur-