The Cairo bulletin., 1911-01-21
PUBLIC TAX FOR PRIVATE
PROFIT.

Mr.. Brandeis, counsel for the At
anti, seaboard shippers. certainly
started something He set minds to
working and set investigation in mo-
ion The railroads Of this country
ave been asking permission Of the
Interstate commerce commission to
Increase their charges FOR carrying
reight Mr. BrandeIs put it this
way. "As an alternative to the rail-
=oads practice of combining to in
crease rates, we offer cooperation
to reduce rates"
And then this warnings Let the
consumer beware of the vicious cir
lie OF ever increasing freight rates
and ever increasing cost OF living"
The Philadelphia North American
is one of the great dailies that has
been making explorations and report
ing discoveries II is right in the
heart of the steel and railroad world
and has avenues easy at hand for re-
searching. 1t declares-and its story
which we give. is well WORTH careful
perusal-that 1t is an established and
conceded fact that the railroads pay
an exorbitant price for steel rails
Mr.. Brandeis showed that the men
who own and control the railroads
AIDE in control of the combination
which keeps up that exorbitant price.
Steel rails are one OF the largest
items in the maintenance of way
charge 1t is well worth the atten-
ton OF the railroad management.
But the very circumstance that
would make 1t easy for the railroads
to compel reduction in the price of
rails is also the chief means by
which the price Of rails has been
kept at high figure.
Mr.. Brandeis points out that, OF the
sixty-fye men who are directors of
the four steel companis making rails
forty are directors in fifty-two rail
roads, including the most important
systems in the country.
SO the railroads buy immense
quantities of steel rails at prices that
so eminent an expert as Andrew Car.
negie estimated as 40 per cent too
high and which moderate estimates
mark as anywhere from Is to 80 per
cent too high
The railroad directors are paying
to themselves profits based on OK.
orbitant prices for supplies purchased
for the railroads. 1t is just exactly
as II the councllmen OF city should
engage in the business OF selling sup.
plies to the city at Is or 90 or 30
per cent more than the supplies were
worth. OF course. that kind of city
management would be reflected in
the tax rate OF the city.
Steel rails are only one item In
the expense of maintaining rail
road. But this one item serves to
Illustrate the system In the yeor
1906 the overcharge on a basis Of
20 per cent, was nearly $16.000,00o.
That s1G.00O,0Oo became a capital
charge. For all time 70 come 1t viii
be a vested interest. The public will
be taxed by the roads to pay divi.
dends on 1t.
And every year this process goes
on. Something more Is added to the
investment in steel rails. The dlrec-
tors of the railroads take huge sums
out of the treasury or the railroads
and put them into the treasury of the
steel companies, which is their own
pockets.
But, 1t may be said, as these men
are owners of the railroads. they are
taking the money out of their own
pockets IL the same set OF men
owned a furniture factory and tex.
tile mill, nobody wound quarrel with
the furniture company ror paying the
textile company an exorbitant price
for upholstery. That would be their
private business.
The steel company Is on the same
basis as the textile mill. But the