The sun. [volume] (New York [N.Y.]) 1833-1916, 1911-02-24


shown the amount by which IL, operating
cost for the year ia,s would have been m
creased had the higher -cAk of wages been
IN force during that year and has also SHOW ~
what the increase IN freight revenue would
have been had the advanced rates been IA
force during the sAlns ier!od. While IA"
method employed IL open 10 criticism. th"
result. are sufficiently accurate Tor the
purpose in view. These figures show that
taking the forty-one railroads together
the increases in wages for the wear ia =
would have amounted to nearly So uoo .mh .
whla the additional reNenu" from the pro
posed advances would only have been
50, moo 600
II seems apparent that the carriers have
not, by showing that the increases ia wages
more than equal the increases III rates.
made ont the tcasonahlcup of the pro-
posed advanced rates and nothing could
more plainly show this than the figures
witch have been presented to ~ with re-
spc,t 20 the net earnings Of these same
forty -onc oarri"rs.
II appears tha, during the wear ended
June 20. ialo. the earnings o( those rail-
roads aggregated sii 600 .uuh more than
during the year 1900. II. therefore. the
entire advances IN wages mad been IN effect
during the whole year of 1910 instead ol
during a tcw months in the Spring Of that
year the net earnings for l0io would have
exceeded the net earnings for 1909 by $40.
o0o 400. This IL not conclusive AGAINST
the proprirty "r these advances. for the
earnings Of 1909 may have been too small,
or the causes which contributed to the
greater net earnings oi 1910 may not bo
permanent IN effect but II does show that
we cannot CopCluSivcly presume from an
increase in operating expense that there
should no corresponding increase in trans
portaticn charge. u is the net. not the
gross. which We must consider
The decision adds that railroad rate
in the final analysis il a tax laid uron
nearly every species of property and
upon almost every kind of activity. and
that there Is no reason why all other
kinds Of property should he required 20
pay to this particular species of property
an undue compensation
The commission HHks what business
could be NOR" attraCtv" to tho investor
than railroadnE. "a business in winch nc
rival il To he dppreh"ndcd. where tn.
amount Of business IL assured ANA whcr.
the price for the transaction OF that bust
ness IL protected 10y th" fundamental law
Of the land The report adds:
Under the conditions Of the future
railroad stocks, or ~ least Nh" s'ocks Cl
those railroads hcfor" us. are bound to
lose much of their spcCuiativ" character
anu 10 aSSliTtlt more ll'' 'tt,llt'l'T III Il
Investment
The decision Instances the P"nnsyly yania
Railroad companv rs operating prosper
ously and says
The president of the PENNSYLVANIA
company testified that since lsS; hls
company had put into the Pcnn-vlvanil
lines east of Pittshurg s?G@ 900 400 from
earnings During all that time this com
pany had also paid To- its stockholders
munificent dividends. Now. 10 whom
belongs this 22ec 900 900, q sum which.
according 10 the statistical report Of the
pennsvlvania Railroad Company 10 this
commission for the year ended June
30. 1910 equals nearly two-thircs of the
total cost Of construction of the 2l23
miles owned by that company"
The cost of the Delaware, Iackawanna
and Western" saws the decision, as
shown bv its statistical returns for he
year 1910. is s,i7 Ss' for single track miles
Its operating income for the same year
was Sl8. .84l per mile, a against sg5H per
mile in lNl. lis corporate inCom" for
the year Amounted to ,971 per cent upon
its outstanding capital stock. having in
creased To that figure from IL - per cent
in 1901. The price of ~ capital ,tocl; on
December ~. 1901. was s25s per share as
compared with So on December :. 1910
the date Of IN. latest sale. Plainly thi.
read Is suffering from no financial strait
which would Justify an increase IN these
The commission holds that the LAX g
Shore and Michigan southern max e-
Almost as favorable showing 1t says
that in the year 1910 that company paid its
fyed char ges, n dividend or is per cent on
its capt. al stock and had remaining over
S6.WO,OOO surplus tor the year.
The commissions report saws further
that statements filed by the Baltimore and
Ohio. the pennsylvania and the New York
Central show that upon these lines the
freight tonnage and the freight revenues
of 1907 have never since been elualled
yet the Pennsylvania Railroad expended
bstween June 80. 1897. and June 81. 1910.
according to its construction account
3as, 900. .GOo. the New York Central S3,,uO. :
200, and the Baltimore and ONO income
exceeding sl8,Vnoo
The decision calls attention to the inter-
relationship between the men who direct
the affairs of the railroads and the affairs
Of corporations from which they purch ase
equipment and construction material.
The vice-president of a railroad COM
pany.' says the report, testified during
the hearing that his company could buy
locomotives of but two concerns: that
on account of the freight rate as u prac-
tical matter it would buy bessemer steel
rails OF only two companies; that struc-
tural iron Of the larger sizes could only
be procured from four or five companies
and that in the purchase OF cars he was
confined to seven or eight independent
plants. II is we'll understood that in
recent years the price of structural steel
In larger sizes and of steel rails has been
uniformly maintained. II il also well
understood that the same men who are
potential in the United States Steel Cor
poration and the American Locomotive
Works are influential in directing the
policy of our railroads.
"Now. il the steel trust is to determine
the price which shall be paid for rails
and for bridges. if the locomotive trust
is to determine the price of engines the
oar trust of cars and the labor trust of
labor, and If the railways have only to
meet the demands made 10y these com
binations and charge over 10 the public
by an increase of rates whatever is paid
Q most unfortunate situation has de-
veloped. There is nothing IN all this
which enables US to say that railways
do pay extravagant prices. and il We are
satisfied that present rates do not yield
an adequate return We should, notwith-
standing these conditions of monopoly
unhesitatingly approve an advance, but
In view of the monopolistic character OF
the business we should proceed with
caution
Referring again To the New York Cen
tral, the decision says
Looking at the figures upon the all track
basis we find that net earnings per mile IA
iaO3 we're 81 Gas and that they aqualled thai
figure in no subsequent year until 1910
when they were g. GRn which indicates tha,