New-York tribune., 1921-09-10
Ford's Plant
Given Credit
For d., T. 81.
Improved Financial Results
Due Almost Entirely to
Industrial Circumstances,
Says Railway Age
Other Comparisons Made
Magazine S e N d s Two
Editors TO Call on
Men Running Railroad


Men Running Railroad
Improvement in the financial re-
suits obtained from Henry Ford's
operation of the Detroit, Toledo &
Ironton Railway have been due en-
tirely to the circumstances that the
ownership of this road has been ac-
quired by one of the largest manufac-
turers of the country. and that Mr..
Ford has used his position as large
shipper to do things on the D., T. & I.
which neither he nor anybody else could
have done without being such ship
per, according to conclusions reached
by "The Railway Age after sending
two of its editors to Detroit to call
on men Mr.. Ford has placed in
road. The facts disclosed. "The Rail
way Age" says, show that no miracle
has been worked.
The Detroit, Toledo & Ironton, the
editors of "The Railway Age" found,
now has much the same relationship
to the Ford Motor Car Company that
the Duluth & Iron Range, the Duluth,
Missabe & Northern and the Bes-
semer & Lake Erie have to the United
States Steel Corporation. These Steel
Corporation railways have been for
GUS in America. They have been
we'll managed, but their prosperity
has been due largely. to the fact that
they have been owned by al indus
trial concern which controls vast
amount of freight.
Summary of Finding
The facts about the Detroit, Toledo
& Ironton are summarized as fol-
lows:
"Mr. Ford bought it in August 1920.
He assumed complete control of its
operation through men of his own
choosing-most- of them men who
were connected with his motor car
business---in March, 1921, when he
himself was elected president. During
the four months September to Decena-
ber, 1920, inclusive, after the present
railway freight rates were fixed, the
D., T. & I. handled an average of
per month and had freight earnings
averaging s493,S00 month. In the
months of April, May and June, 1921,
the road handled an average freight
business of 37,093, 600 ton-n1iles a
month and earned from it an average
Of S694,203 month. In other words,
it's average freight business in these
three months was almost 25 per cent
less than in the last four months of
1920, while its average monthly freight
earnings. were over DO per cent greater.
''This large increase in freight earn
ings, in spite of a big decline in the
total freight handled, could have been
due to only one cause, and that was an
increase iE its average rate. And there
was very extraordinary increase in
the average rate per ton per mile--a
thing to which public attention never
has been called before. In the last four
months of 1920 it's average rate was
one cent per ton per mile. The average
rate per ton per mile in April, May and
June, 1921, was 1888 cents, SO per cent
greater than in September, October,
November and December. 1920. The
average rate of all the railways in the
country is only 1.23 cents.
IF no change whatever had occurred
on the D. T. & |. except this enormous
mile it's financial results would have
been revolutionized. To what was this
remarkable increase in the average
rate per ton per mile due !? Chiefly to
two things: First, to a great change
in the character of the traffic handled.
Mr.. Ford began giving his railway
practically all of his freight business,
and the freight handled directly and
Indirectly for his motor works consists
largely of relatively high-grade COM
modities, which pay rate much higher
than the average.
Meantime the amount of coal han
died by the railroad greatly decreased
Coal being bulky and cheap commod
ity, it pays a rate much smaller than
the average. This change in the char
acter of the traffic alone would have
caused a large increase in the rail
ways average rate.
Large Traffic Volume
Secondly, the D. T. & l. has been
able to use the large volume of traffic
originated by the Ford interests to
secure larger divisions Of the through
rates on all traffic hauled partly over
it's lines and partly over other railways,
and the great bulk of the D. T. & rs
business consists of this through traf-
of the traffic and the larger divisions
of the through rates obtained by the
d. 7. g. l. have tended to increase its
average rate per ton per mile.
Furthermore, the management of the
D. T. & l., in common with all the
other railways, was able, partly because
of the smaller traffic handled by it and
partly owing to other causes, to make
large reductions in it's operating ex-
penses. A study Of these reductions
in expenses indicates that in proportion
to the reduction in traffic handled they
were slightly greater on the D. t. & l.,
but only slightly greater, than those
made on the railways in general.
"The only really great change which
had been made on the D. T. g. I. up
to July l was in the conditions which
determined its average rate per ton per
mile. But how about the reduction of
20 per cent in its local rates and the
advance in the wages of it's employees
which have been SO widely advertised
Neither of these went into effect until
July / or later, and therefore neither
of them had anything whatever to do
with the increases in the railways net
earnings which have been so widely ex-
plotted. We shall have to get late,
data than are now available before any
body can say wnat is the effect o1
these changes in important policies.
ut may be said, however, that Mr.
Ford is SO completely convinced of the
desirability Of a general reduction in
rates that he has proposed that a re-
duction of 20 per cent be made in the
rates of all railroads. 1t is not our
purpose to impugn Mr.. Ford's motives
but there are certain important facts
about this proposed reduction in rates
which are pertinent. The freight earn.
ings of the Detroit, Toledo & Irontor
are now running at the rate of approx.