The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1921-09-01
HENRY FORD, RAmRoADER.

| Practical railroad men have not
| been so ready as has the public to
believe that Henry Ford has worked
| another miracle in the operation of
the Detroit, Toledo & Ironton rail-
road, which he acquired about a year
ago. Whatever may be conceded
| about Mr.. Ford's success in the auto
mobile business, even in .extricating
himself from his financial difficulties
of last year, railroad experts insist
that the stories of his achievement
with his new railroad, If taken at their
| face value, read like the discovery OF
perpetual motion, or a device to make
water run uphill. Mr.. Ford's opera
tons are described by the Wollman
Review as follows:
For many years the Ford plants in
and about Detroit have been served by
an important alliance, which includes
the New York Central. Grand Trunk,
Pere Marquette and Wabash, besides
the Detroit, Toledo & Ironton railroad.
The business was distributed among
these carriers with service satisfactory
to the shipper. The Detroit, Toledo
& Ironton was receiving the least of
this tonnage, as it reached no i'm
pOl telAlL PO11lS. MS latter ROAD
been receiving cut divisions of the thru
rates on business interchanged with
its connections, but this failed to yield
sufficient revenue to sustain it. The
methods of shipping raw materials to,
and finished products from the Ford
plants normally yield perhaps upward
of 500 cars of freight per daA
Mr.. Ford bought the d. T. & I. thru
a purchase of stock and adjustm emit
mortgage bonds of that company. The
road had outstanding $7,62S, 900 of ad-
justment bonds, $5,sSs,9sS preferred
dillon to $2.254,O0O OF underlying
bonds. Mr.. Ford is said to have paid
5000 per $1,000 adjustment bond, So
per share for preferred and 81 per
share for common stock. If Mr.. Ford
had acquired all of the adjustment
bonds and stock. his investment would
have been s7,6S7,o00, or $1,000 per
mile against an original capitalization
of about $50. 700 per mile for the All
miles of railroad. Mr.. Ford's capital
outlay therefore, must have been rela-
lively small.
with the ACQUISITION of the railroad
Mr.. Ford concentrated the larger part
of the tonnage movement on his new
property He exacted from connect-
ing carriers percentages of division
which the other railroads recognized
as an excessive burden, but which was
tonnage could be completely diverted
elsewhere. The tariff on this freight
has been estimated at $22,0O0,000 a
year.
Rates cannot be reduced by indi-
viduaI roads without disturbing the
entire rate structure served by them,
it is pointed out, but the increased
carrier divisions which Mr.. Ford Hhs
exacted have left the rates nominally
undisturbed. However, these In
creased carrier divisions, which now
total over 100000 per month, are
paid to a road which under normal
traffic conditions would not receive
them. The result is that the Detroit.
Toledo & Ironton railroad is receiv-
ing a revenue of about 100 per cent
binary conditions for the service l.
performs. and out of all proportion to
that received by it's connecting car
riers for similar service or similar
hauling.
Railroad men see in Mr.. Ford's ap-
parent success in transportation
merely the result of his ability to OBJ
tain return tonnage on an exception
ally favorable basis from really great
railroads and make his small line
show & profit. 1t is even suggested
that sooner or later this question will
be investigated with view to deter
mine whether or not Mr.. Ford has not
discovered an ingenious method for
evading the transportation laws pro-
hibiting rebates.