The New York herald. [volume] (New York, N.Y.) 1920-1924, 1921-08-24
FORD'S RAILROAD
PLAN Is ANALYZED
Brokerage Firm Asserts Lines
Revenue Out of Proportion
to Value of Service.
HINTS AT INVESTIGATION
Likens Detroit, Toledo and
Ironton Success to Discovery
of Perpetual Motion.


| interest the widespread discussion OF
the apparent miracle by which Henry
| Ford, at a time when bankers and rail-
road executives were declaring that
many great railroads were on the verge
Of receivership without higher freight
and passenger rates. lower wages. re-
vised working rules and more business,
purchased the 400 mile Detroit. Toledo
and Ironton Railroad and In the brief
space of year turned it's recurring
deficit into operating income. Increased
the wages of its employees end applied
to the Interstate Commerce Commission
for 20 per cent. horizontal reduction
in transportation rates.
The brokerage firm OF w. ]. Wollman
g. Co, specialists in railroad stocks, will
bring their guns to bear on MIR. Ford's
methods in the current issue of their
weekly stock market review.
Whatever may pc conceded about Mr..
Ford's success in the automobile bust
ness, even in extricating himself from
his financial difficulties of last year."
the review will say. railroad experts
insist that the stories of his achieve
ment with his new railroad, II taken at
their face value. read like the discovery
of perpetual motif, or a device to make
water run up hill
Yearly Freight S22,OOO,OOO.
FOR many years the Ford plants In
and about Detroit have been served by
an important alliance, which includes
the New York Central, Pere Marquette.
Grand Trunk and Wabash, besides the
Detroit, Toledo and Ironton. Business
was distributed among these carriers,
with service satisfactory to the shipper.
The Detroit. Toledo and Ironton was
receiving the least of this tonnage, as
| II reached no important points. This
latter road had been receiving cut divi-
sions Of the through rates on business
interchanged with its connections, but
this failed to yield sufficient revenue to
sustain 1t. The methods of shipping raw
4 materials to and finished products from
the Ford plants normally yield perhaps
upward Of 500 cars Of freight per day.
/ with the acquisition of the railroad
Mr.. Ford concentrated the larger part
of the tonnage movement on his new
property. He exacted from connecting
! carriers percentages Of division which
the other railroads recognized as an
4
by certain lines because the tonnage
could be completely diverted elsewhere.
The tarif on this freight has been esti-
mated at $22,000.000 a year.
Rates cannot be reduced by indivld-
ual roads without disturbing the entire
! rate structure served by them, but the
increased carrier divisions which Mr..
Ford has exacted have left the rates
nominally undisturbed.
Investigation Suggested.
| However, these increased carrier
divisions, which now aggregate over
$500. 900 per month. are paid to road,
which, under normal traffic conditions.
would not receive them. The result IS
that the Detroit, Toledo and Ironton
| Is receiving a revenue of about 100 per
cent. above what 1t would obtain under
ordinary conditions for the service IL
performs. and out OF all proportion to
that received by Its connecting carriers
for similar service or similar hauling.
Railroad men see in Mr.. Ford's
apparent success in TRANSPORTATION
merely the result of his ability to obtain
tonnage on an exceptionally favorabis
basis from really great railroads and
make his small line show a profit 1t Is
even suggested that sooner or later this
question win be investigated with view
to determine whether or not Mr.. Ford
has not discovered an ingenious method
for evadlng the transportation laws
prohibiting rebates"
Another interesting contribution to the
discussion was made yesterday by Dow
| Jones &C. Co, In the publication of a
letter from J. A. Gordon. formerly presi-
dent of the Detroit. Toledo and Ironton,
! who pointed out that in buying the road
the Fords were running no risk at all,
since the Ford motor plant alone had
traffic enough to make its operation
\ profitable.
obviously Ford has many millions
more to gain out OF reduced freight rates
than out OF any possible profit on the
D.. 4. and L." said Air. Gordon. Tor
tunately the Transportation act deals
with railroads as a whole or by groups,
and ii isn't at all likely that tho l. G. c.
will authorize a reduction at this time
because that body of experts must
realize that d. r. s. 1. profit Is at the
expense of other roads from which the
Ford Motor Company traffic was with
drawn"