The daily Gate City. [volume] (Keokuk, Iowa) 1855-1916, 1913-11-20
Thorne Replies to Ripley

Mr.. E. P. Ripley. president, the
Atchison, Topeka & Santa Fe Rail-
way System, Chicago, Illinois.
Dear Sir: Your esteemed favor OF
recent date containing certain COM
ments on the government ownership
of railroads was duly received. !
heartily agree with you as to the
grave Importance of this subject to
the American public. In my original
statement summarized all the figures
given in the following words.
THE private ownership of Ameri-
can railroads is costing us more than
four hundred million dollars a year"
This statement has precipitated a
somewhat extended discussion. The
editor of the Railway Age Gazette,
the official mouthpiece par excellence
for American railroads, makes the
following editorial comment, In the
course of lengthy article on the sub
ject: IF, as Mr.. Thorne figures, a
saving OF 1884 ,14O,210 in the cost of
railway capital could be made under
government ownership, the Railway
Age Gazette would declare for that
policy right now Perhaps there
may be others of the same opinion.
A The Wall street Journal, the well
known financial publication Of New
York City, has joined in the chorus OF
bitter criticism in its leading editor
| ial of last week. You say in your
letter, that my conclusion that a
saving of $464,0Oo,oO0, or any sum
approaching this, could be made un.
der government ownership, is with
out foundation"
1t would seem that II my position
can be substantiated, 1t may be
worthy of consideration at the hands
of the public. Therefore I have Sc
lected the letter from you for the pur
pose of making a reply to some o.
these statements that have beer
hurled at me during the past few
days.
You We're not present when the
statement was made at the recent an
nual convention of the National AS
ISOLATION of Railway Commissioner
in Washington, D. c., and for you
benefit, 1 desire to inform you tina
| specifically stated that | did no
make the computation but that the
were made by q competent statistic
ian of over twenty years experience
This gentleman came to us this pas
summer with high recommendation
from two of the leading railroads i
the country, for whom he had worke
in the past. | accepted his figure
with implicit confidence. Since r.
ceiving your letter have made
personal check of the figures. | al
cept full responsibility for using on
statistician's figures. I find thel
l correctly transcribed from the r
7 ports OF the interstate commere
commission; but find some apple
tions of figures with which / do n,
lagree. also find certain mistake
in yorr computations, and challens
you to explain them.
Your first specific charge again
my statement is, after quoting tt
total interest and dividends (ssS:
215,3SD:
"On the contrary, the total n
operating revenue of all the railws.
for which as yet we have the stati
tics of the interstate commerce COZ
mission for 1912, was in that ye'
only ss67,954,5s6 and after the pa
ment of taxes they had left on
s755, s69,4S5 net operating incom
In other words, the figures given
you for interest and dividends exec,
by over 1927 100000 the total amou
of net revenue that the railways h;
left after paying their operating e
Ipense and taxes, which shows them
have paid the amount Of return {
capital which you say they paid wou
have been physically impossible"
In the figure you give as the tot
met operating income Of sT55,S6
1856, you exclude s255.611 ,495 repl
senting "other income as we'll
s123,S9S,207 income from non-oper,
ing roads A substantial portion, b
not all, of these figures should leg
imately be included. The net flgu
for other income In 1912, is un,
tainable at this date These f1gur
are given in the preliminary sta
ment of the interstate CONNER
commission, under date of July
1918. The purchase Of all capital
sues would certainly include secl
titles issued for outside investment
and this should entitle us to the cal
iings on the same.
You are trying to take an unf;
advantage, when you attempt to lin
the total income or funds Of Americ
railroads, available for all appropr
tions including interest charges,
the item known as met operating
come q do not criticize your /
OF the term Income" as Technical