The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1913-01-28
RAILROAD CONSTRUCTION AND
FREIGHT RATES.

FREIGHT RATES.
During Inc past gear less than ten
miles OF railroad were constructed I'M
Virginia In thc country 80 a whole
,he total number Of miles Of new rails
..id was only 9.9s7. This is the smallest
abroad mileage built since 1897 at
which time the depressed conditions
caused by the panic Of 1895 were still
lucrative on the other hand. in no
wear since 1896 have the carriers Of
trc country ordcrcd-so many new cars
and locomotives as they did in 1912.
Tho seeming Inconsistency Of this
condition Of affairs has been due TO
two SETS of causes. In tho first place.
,,p 10 The close Of the last fiscal year
r.,ilroad net earnings had been steadily
declining. owing to the increasing
absorption of operating revenues by
oncrating expenses. As 4 consequence,
railroad stocks as investments gradu-
auy became less attractive. and rail-
,oad managers We're unable to float
the amount of new securities necessary
10 provide for Improvements and eX-
tensions. With the revival of active
trade and industrial conditions during
the last half of 1912. however, and the
marketing of the remarkable crops of
the year. the railroads of the country
were taxed to the utmost to meet the
demands made upon them for the
transportation of commodities. ana
large orders for locomotives and cars
we're placed in order 10 move the in
creased volume of traffic As the re-
suit of these unusual conditions. there
was also an upward trend in gross and
net earnings. Al the present time the
net earnings of the railroads of the
country are about Is per cent greater
than they were for the corresponding
period last year.
\ discouraging feature in the rail-
road situation at the present time,
however. is found in the fact that the
net returns from conducting transpor-
;ation have not increased proper
tionateIy with gross revenues. AS
a consequence. surplus earnings have
not been available TO buy equipment,
10 construct extensions and new lines,
or to meet interest charges upon the
Rotation of new securities. This situa-
ton has been partly brought about by
overcapitalization in the past and
the resultant absorption Of net earnings
by Increased dividends and fixed charges
bo
advance in operating expenses during
recent years caused by additional
wage payments to railroad employees
and by the rise IN the prices of equip
ment and supplies It Is evident at
the present time that net earnings in
the transportation industry must be
increased before apital can be secured
10 purchase much needed equipment
and TO make other necessary improve
ments The limit seems already to
have been reached IN the way Of econo-
mics and efficiency in conducting
transportation. and. although the forth
coming reduction Of the tariff will have
q tendency 10 reduce railroad operating
.costS. 1t s~enect viii not go 50 far as to
afford relief from the existing situation.
10 is becoming more and more clear
that. whatever the financial practices
OF the railroads may have been in former
years. authority must be given 10 them
by the Interstate Commerce Commits
sion 70 increase their revenues by
advancing freight rates. Al the same
.ime II l. equally apparent that IN
making concession, 70 the carriers, the
rights OF the public must be safe
guarded and that the way must not be
left open Tor q continuance Of financial
policies by tho railroads which ex-
ucrience has shown 20 be undesirable
or dangerous 70 has been the resizs-
ton Of this fact which has led 10 the
demand Tor a physical valuation Of
railroad property as preliminary CON
oiiion 20 ard basis for fhc fixing Of
freight charges by the Interstate Com
mcrce Commission
The recent statement 90 James =
Iir1 former prcsiGcut OF the Great
Northern. and the address Of PresiGcrt
Tiniey. Of the Southern Railroad. several
,iays ago a. Vale University. clearly
indicate thar ne railroads have deter
r.ined 90 sss for authority 90 increase
frci- freight Charge Before many
months IRE railroad question Will
urdoubtcdIy bold arc centre of the
s'sge end ttc Interstate Commerce
'onlrn.ssion ss vol s- Cons-c-s itself.
wiH o. required 90 rass UPON $500 or