The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1919-10-22
ESAYS STATEMENT
is PREPOSTEROUS
States Railroads Less Than in 9th
er Countries Railroad Accounts
Supervised.
Supervised.


railroad brotherhoods and Glenn E.
Plumb in urging an investigation by con-
gress of charges made by Mr. Plumb in
advocating the Plumb plan to the effect |
that the capitalization and property in
vestment of the railroads have been enor-
mously ''watered."
An investigation would he beneficial |
to all concerned and especially the rail |
way companies the Railway Age asserts.
The principal charge the spokesman of
the brotherhoods are now making is that |
the railroads are grossly over-capitalized |
and that their book cost OF road and |
equipment account is padded to the extent
OF eight or 10 billion dollars One of the |
most remarkable Authorizations about bus
mess which ever obsessed the minds of
any intelligent people is the hallucination
OF probably majority OF the people Of
the United States that the railroads are
enormously overcapitalized The book c sst
OF road and equipment is larger than the
net capitalization and therefore we will
examine this charge as applied to it.
In the year 1916, 9the latest for which
complete statistics are available, the total
book cost OF road and equipment as re-
ported by the railroads to the interstate
commerce commission was ST., 525. 81. sos
Prior to 1907 this account on many roads
undoubtedly was made higher or lower
than the actual investment, since the COM
panles up to that time kept their accounts
as each thought best.
Since 1907. however, the companies
have kept their accounts as required by
the interstate commerce commission and
therefore 1t must be assumed that all adj
dltlons made TO the book cost of road
and equipment since 1907 represent actual
investment. The increase in book cost of
road and equipment between 1907 and 1915
was Si,495, 232 $50 Meantime the increase
IN the railroad mileage of the country was
y 100 miles.
Let rs now go back to 1907 We find
that at that time the total book cost of
road and equipment was reported as sl3-
03O,3H ,32S. The number of miles of rail-
road IN the country was 22995l. II, as is
alleged, the book cost has been padded to
the extent of 5000 ,000, 900 to $4,000 900.
900, all OF this padding was done prior to
the end of the fiscal year 1907 If we as
sumo that the padding up to 1907 was,
900, then we must conclude that up to
that time the railway companies had
built approximately 100000 miles of rail-
road for from s3,000,000,0o0 to IS 900 ,000,-
600. If we assume that the watering
amounted to only ss0000O0. 600, we are
obliged to conclude that the companies
had built 100000 miles of railroads for S.
e5o,oeo,o0. or an average of less than $22,-
600 per mile.
The railroads of the United States IN
1907 were good railroads, many of them
with double or more tracks. Never i'll any
country IN the world was good single rail-
road track built and equipped for so, 900
mile or any amount approaching this
sum. In 1907 the cost of construction of
the government owned and operated rail-
ways of New South Wales, Australia was
reported as 100000 a mile: the cost of
construction OF the government owned
Intercolonlal railway of Canada was Off
clally given as s6O, 1853 mile: and the cost
OF construction of the government owned
railways of Germany, where the wages
paid were half those paid in this country,
was reported as over Sl07 900 mile. The
book cost of the railways of the United
States at that time was less than SIS, 900
Il mile
The charge that the railways of the
country are over capitalized to the extent
OF SS,0oO,000.e00 to 100000 100000, or
any other large sum, seems so absolutely
preposterous to anybody who has a sem
tiiia of knowledge regarding railroad mat
tiers as to seem not worth moment S
notice and yet these outrageous charges
regarding over capitalization must be an
j swefed again and again because, while as
applied to the railways as a whole they
have not the slightest foundation. they
are made with such confidence and re-
| peated so often that many people are led
to believe them
We should greatly regret to see the
return of the railroads to private opera
| ton delayed i'll order that congressional
| committee might investigate charge
known to be false by everybody who
knows anything about the railroad bust
! ness. At the same time we should like to
see thorough investigation and complete
report upon the subject OF railroad capital
] iZation in the United States made by
some such committee as the present house
committee on interstate and foreign com
merce. Such an investigation and report
would demonstrate the baselessness of the
| charge of great overcapitalization and
thereby do more than almost anything
| else could do to put the railway companies
in good standing before the American
public.
! That some railways have been over.
centralized everybody knows, and from
this the conclusion has been drawn that
all railroads are overcapitalized. The facts
! that there are numerous important rail-
Ways. such ne the Pennsylvania and the
Santa Fe. which it is possible TO demon
Istrate are, measured by any standard
greatly undeicapitalized and that not a
few rain 5ads which have been overcapital
fized, such as the Rock Island. have re
duced their eaptitalizations TO normal
basis ID not seem to be known to many