Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-08-31
WEDNESDAY EvEN1Na. AUG. 81. 1921.
HENRY FORD AND HIS RAILROAD.

q railroad. his road, the Detroit, Toledo and
Ironton, is something less than 500 miles long.sFor
some time it was a burdensto its owners So stu
ated that 1t didsnot command any considerable traf-
nc 1t was losing money hand over fist. Within a
few monthsso Of his purchase the public has been told
that Mr.. Ford has been able to realize a substantial
prohty notwithstanding the fact that he had reduced
ratess20 per cent. He had cut the force of employees
in halt, and with the smaller force had been able-to
move many times the freight formerly handled BY
economical and efficient methods 6f this kind he
had reduced operating costs, and this, with his in
creased tonnage, has resulted in profit instead IF
loss. The public has been asked to- believe that all
that is needed on the part of other railroad owners
IS the application Of similar business policies to eff
feet the solution of the whole railroad problem Of
the country.
MI. Ford seems. to have done very we'll with
his little road, but that what he has done does not
point the way to the immediate solution Of all other
railroad problems is indicated BY the following
facts:
Mr.. Ford made his purchase at what amounted
to a bankrupt sale, and at a'bankrupt price. His in
vestm1ent is but a fraction of the original investment
or of the cost of replacement. He had to provide
less capital than is, necessary for a road which is
actually a going concern.
The freight rate reductions which have figured
in the reports had been authorized, but at the time
of the declaration of profits they had not gone into
effect. The road was doing business on the old
rate.
The road is so situated that it can be used to
G AdS Ito III A0AlA w llC uSlIlCS VI II TOIQ
plant. For reasons of his own Mr.. Ford did not
give any large share of his business to the D.. T. &
l. under the former management. Now he does
business, quite naturally, with his own road. He is
the roads largest shipper, and its only very large
shipper. He simply switched his trade to his own
road. l.
To the extent of most Of the traffic wphich-it
handles this road is a sort of belt line, connecting
here and there with various other roads. Freight
charges In. such cases are pro rated, each carving
~ CCmOanv feceIvInp IFS nfOnOrfiOn ~ When Nj EarH
got hold of the property he demanded for his road
a larger percentage of the joint rates. The other
companies whose roads connected with his rather
needed the money themselves, but they could not
see their way out. The Ford business is a desir-
able business, and the owner Of the little road could
grant or withhold a share of that business asJhe pre-
ferred. Some of the other managers, desiring to
make everything pleasant, yielded to the demand,
and the roads revenues were materially enhanced.
It is possible that other roads are oyermanned,
but for one of the big roads to undertake to dis
charge half its men would be a rather risky thing.
It is explained that the smaller force is able to do
more work because, while working only eight hours,
each man is expected always to work his eight
hours, and if there happens not to be work for him
for the moment at his regular job, he is put at some
other. Let one Of the. regular railroads try that,
and then. see what the railway unions would have
to SAY! >
The situation appears to be that a great manu-
%facturer bought a littleJailway for a song and made
tia part of his manufacturing plant, and is making
money by SO doing. Some Of our courts and public
lists have decided that it is immoral and contrary to
public policy for a railroad company to own a coal
mine and for a packing company to own stockyards.
Ownership of a railroad by an automobile manu-
~facturer may involve a different principle, though
that point is not quite clear 1t was long ago de-
.:scided to be illegal for the StandardsOl company to
secure lower freight rates than its competitors by
means of rebates. In the case of Mr.. Ford and his
railroad there are no rebates, but the same end
seems to be accomplished by the division of joint
rates. 9