Ashland tidings. [volume] (Ashland, Or.) 1876-1919, 1916-10-05
Resident Born Dealsrl
PAULSERUD De BARRETT
About Railroad
Investments

zone of the most serious problems
now confronting the American peo-
pie is that of assuring the prompt
movement of railroad traffic when
our population is twice what 1t is
now, and during the years when the
increase is taking place For years
to come, and perhaps forever, huge
sums will be required each year
for new lines, double, triple or quad
ruple tracks, terminals facilities,
costly stations to satisfy local pride,
but which do not increase earning
power; improvement of alignment
and grades, often involving costly
tunneling; new equipment, in addi-
tion to mere replacement; electrifi-
cation of important lines, and what
ever else we know of now or which
human ingenuity may discover or in
vent, and which is properly charged
to capital account. When we think
of all tn ese urgent requirements
the late Mr.. Hills estimate of a bill
lion year seems very moderate.
"The question is, where is the
money to come from? Those who
talk the most and think least blithe-
ly say, There must be government
ownership. AS that would involve
exclusion of all federal-owned rail-
road property from state and local
taxation, a new national indebted
ness of from fifteen to eighteen bill
lion dollars at rates Of interest
greater than the strongest systems
have hitherto paid, and a certainty
that under government ownership
the service would be poorer than we
now get and its cost greater, that
position need not be considered.
What is now to be considered is the
probability of the money being sup
piled by private investors.
"When dealing nationally with
the subject, one must write in terms
including all the railroads, while the
fact is that some railroads are very
profitable and some are operated at
loss. Some have still sufficient
equity represented by stock owner
ship to enable them to borrow at
current rates. while others cannot
borrow at ALL
"It may be conceded at once that
if the railroads could be assured of
the net income which they are now
getting, there would be little trouble
in selling shares as we'll as bonds,
even if, without raising rates, wages
of all employees were largely in
creased
"But there is no such assurance.
And the large profits now made by
the carriers are but to very limited
extent distributed in increased divi-
dends, but are necessarily used to
make betterments and provide the
equipment whose necessity was fore
seen, but for which the money could
not be got during the years immedi-
ately preceding, when approximately
a third of the railroad mileage of
the country went under receiver
ships, from which perhaps 20 per
cent of the total mileage has not
yet emerged.
"The facts are substantially as
follows, according to the figures
compiled by the Interstate Com
merce Commission:
"From 1907 to 1914, the actual
new cash invested in American rail-
roads was $3,6272S3,3SO. In 1914
the actual net income available for
interest and dividends was $74,110,-
S51, less than in 1907. If 1t be said
that business was remarkably good
in 1907, and remarkably poor in
1914, and that years constantly vary,
it may also be said that in but two
years between 1907 and the begin
ming of war prosperity did the in
crease of 25 per cent in the capital
of the railroads bring any additional