White Pine news weekly mining review. [volume] (East Ely, Nev.) 1910-1920, 1913-05-18
REDUCTION
VS.. MORE WAGES
PUBLIC SLOW TO RECOGNIZE
RELATION BETWEEN EARN
INGS AND EXPENSES IN TRANS
PORTATION BUSINESS.

time, for investors to remember hat
the values of securities will count in
the long run. There is SO much I'M
reasoning pessimism abroad that it
facts. The managers of the railways
are laying so much stress on the fact
that they cannot continue to advance
wages and reduce rates that many
have come to think that such condi-
tions can be expected to continue in
definitely. Ii Is only fair to say that
the American public has always
shown a desire to do justice when
the facts of a situation were under
stood. 1t has taken a long time for
the average man to realize that there
is any relation between the earn
ings and expenses of a railway COM
pany. The idea seems to have been
that the railways had hidden earn
ing power somewhere which could
be drawn on at will to meet divi-
dends.
The facts are. however. and they
are generally becoming understood
that the increase in expenses and re-
auctions rates during the past few
years have reduced the average lee
way between dividends and no divi-
dends to an insignificant amount,
says the Boston Financial News.
There is no business in the world be-
ing conducted on so small a margin
of profit as that of transportation
and there is zone where the pub
lie gets SO much for the money. The
old days of abuse of accounts could
be juggled and made to show any
thing the management desired The
railways must now play in the open,
as the Government keeps close tab
on them and in most states the is
sue of new securities is strictly SUI
pervised and limited to useful and
necessary investments of capital.
Government regulation. however. in
stead of increasing confidence in
railway securities has operated re-
versely.
The public hears of an increase in
wages from time to time and reduc-
tions in freight rates quite frequent
ly. The facts are simple and the
sooner they are understood the bet
49, - Mill - e. III ~ IL
Interstate Commerce Commission has
SO far contended hat the railways
were receiving rates sufficiently high
to protect dividends. and the govern
ment is practically committed to the
necessity of allowing the companies
to earn fair returns on the capital
invested. The Interstate Commerce
Commission has ordered reductions
from time to time which are largely
in the nature of adjustments and in
sc doing the average of the whole
has been reduced. The whole ques-
ton of whether or not railway Sc
curities are TO remain good invest
ments hinges on the fairness of the
the interstate commerce commission
and that will soon be put to the test
by the application of the eastern
railways for permission to increase
freight rates five percent.
The matter of wages for the men
employed on the railways is decid-
ed by arbitration and the public has
the deciding vote in the arbitration
boards. The public, therefore, thru
t%heInterstate Commerce Commission
and the Board of Arbitration is ex-
ercising a very powerful influence
on the course of transportation
earnings and the value of the Sc
curities of the companies owing the
properties. The best service that can
be rendered railway shareholders is
to arouse them to the necessity of
combating the prejudice and self-in-
terested opposition which manifests
itself In so prominent a fashion
whenever there is occasion. The
sensational press is continually try
ing to arouse popular prejudice
against the railway companies and
individuals who thrive on popular
discomfort are doing likewise; this
makes it all the more important for
the shareholders to get their side of
the story before the public and in
sist on a fair hearing with a deci-
sion in accordance with the evidence.