Semi-weekly herald., 1913-01-27

roads equipments, supplies and like
materials. AS whole this associa ?
tion represents as great an industry
as we now have in this country. Hun
I dfeds Of thousands of wage earners
are dependent for their livelihood
upon the business done by this as
sociation. For the past four yecrs
this association has met annually in
spirit of hope, and yet with .
spirit of dismay, that the railroads Of
the United States have not been able
TO secure the capital needed for the
enlargement and improvement Of their
facilities.
Mr.. Hill, like the late Abram s.
Hewitt, in the field of iron and steel
manufacture, has figures and statis-
tics at his tongues end. He is a
master statistician, and not exclusive
ly in the field of railway development.
The statistics which he has gathered
OF present conditions convince hiri
that, as he says, the commerce of the
country can escape disaster only by
the improvement of railway facilities
and enlargement of terminals.
To fortify this statement, Mr.. Hill
says that in a single year, the twelve
months between the end of 1909 and
the end of 1910, the freight-ton mile.
age of the railways of the United
States grew eleven times as fast as
trackage and five times as fast as
equipment That is condition which
cannot long continue, in Mr. Hills
opinion, without harm, from which the
business men of the United States will
suffer even more greatly than the rail-
road companies.
Apparently Mr.. Hill has no doubt
that if the railroad companies of the
United States are able to secure fresh
supplies of needed capital the danger
of disaster of this kind will be eli
minated In fact, Mr.. Hill says that
the main question behind this situa-
tion is wholly financial. How can the
railroads get capital? What security
can they offer? Some of the rail
roads of the United States have
pledged their credit to their capacity,
and in addition to that have taken
surplus earnings for the improvement
of their property, proceeding which
in other countries than our own would
cause grievous criticism, even revolt,
on the part of shareholders. Notwith-
standing these extraordinary efforts
to obtain needed capital the railroad
companies find that, although their
revenues in gross are increasing, new
ertheless their expenses increase more
rapidly.
Mr.. Hill says that at about the be-
ginning of the present century re-
turn of per cent would bring in am
pie capital for railroad improvement.
This sum does not avail at present; at
least net income of per cent is
needed to tempt capital, and even that
does not avail at present in very
large amounts. Mr.. Hill says that
the railroads of the United States
can pay money only as they are per-
mitted to earn it. And it is in his view
for the people to say whether or not
terminals and other facilities shall be
supplied; but he says that the people
must also be prepared to suffer griev-
ously in their business activities if
the railroads are not able to obtain
the capital which is needed.
Mr.. Hill calls attention to the fact
that the railroads of the United States
have much the smallest capitalization
per mile of any railroads elsewhere
in the world They have kept their
capitalization low by using for i'm.
provements and betterment hundreds
of millions of earnings which the
shareholders of Great Britain or OF
Europe would have insisted should be
paid over to them in the form of divi.
dends. These shareholders in foreign
railroad companies insist that the
cost of improvements and betterments
be charged to capital account, pr, il
ctner words, should be represented b.
increa ased capital.
Mr.. Hill, however, is persuade thai
the American policy of not charging
off to capital accounts the money ,x,
peroed in improvements and better
mant is, on the whole, in the publ,
interest. He asserts that this lend.
to keep fixed charges down. And ht
reminds the American people that this
policy was adopted voluntarily and moi
by any legal compulsion. Mr.. Hill
| suggests that railroads should be per.
n.itted to earn and hold a surplus
reaching 80 per cent of the amount
they pay out in dividends, this SUI.
pius to be held for emergencies ane
applied to improve facilities.
One paragraph of Mr.. Hills addres.
represents his profoundest convictions
1t is the one in which he asserts that
the American people cannot fail speed
lily to realize how injuriously they ar,
affected by measures which, for sc
many years, have been as game that
has been played with their buslnes:
prosperity and their future welfare