Browning chief. [volume] (Browning, Mont.) 1941-1953, 1942-10-09
GREAT NORTHERN
FOLLOWS POLICY
SET BY FOUNDER
HILL PUSHED SAME TRANSPORT
ALTON IDEAS LATER ADvO-
GATED BY FORD

ALTON IDEAS LATER ADvO-
GATED BY FORD
It has been 26 years since James J.
Hill left behind his great adventure"
the Great Northern railway-but II
the bearded empire builder could see
1t today, he would find the road still
following loyalty two great principles
Of his life
Hill, transportation giant Of his
time as Henry Ford became in a later
era, had in common with the auto
mobile genius at least one simple pre-
cept:
Low-cost transportation.
The yellowed pages OF Hills an
nual reports repeat almost monoton-
ously; Better farming, greater trans
portation efficiency, lower costs-then
lower rates, more settlers, more traf-
fic, followed by more profits to in
crease railroad efficiency, bringing
still lower costs, still lower rates to at
tract still more settlers who will pro-
duce still more traffic.
Debt Reduced
Two facts stand out in present-day
reports OF the Great Northern:
The fund debt last December total
ed $316, OO7 900, lowest figure since
1924 and a reduction of nearly
$50, OOO, 900 since 1884.
Operating expenses in 194l drop
ped $4,5OO,OOO from 1929, although OPP
Grating revenues we're about the same
each year. The total saving in 194l
over 1929 Appropriated $1,000! 900 in
terest charges being some 4,5O0, 900
less.
This achievement in the face Of
rising costs Of material and labor,
huge tax increases and competition
never known to Hill-automobiles,
trucks and airplanes-is monumental
in an industry that has taken heavy
beating economically In the past
decade. In addition, 1t was done with
out impairment of the profit and loss
surplus, which stood at $1l5,0O0 last
December.
How did this come about when SO
many systems were being plung-
ed into bankruptcy or financially en-
barrassed otherwise?
Frank ]. Gavin, Great Northern
president, and his associates refer you
to the principles Of Hill, but the boys
down below-who haven't titled doors
say the G. N. was fortunate in hav-
ing three singular presidents for
three unusual periods Of American
business history.
First there was Ralph Budd of the
1905. He was a builder who COM
pleted the ideas Hill never lived long
enough to realize. Hill always knew
his line across the Cascades of Wash
ington was a poor one. Budd made 1t
a good one. He built the Cascade light
mile tunnel, longest in America,
Strengthened out much roadway and
electrified severe mountain areas.
There was lot of fat on the road
when the succeeding depression chal-
lenged another president, William P.
Kenney. He was a traffic expert with
a shrewd financial side. Keeping one
eye on declining revenues and the
other on debt and costs, he began
grabbing nickels and instituted a debt
refunding and reduction program that,
at his death in 1888, had cut some S24,-
900 900 off the roads funded obliga-
lions and sliced interest charges more
than 100000 annually to AZ per-
cent rate from 5.4 in 1929.
He was succeeded by Gavin, whose
forte was operations, fortunate hap
penstance for the nations war effort.
Gavin, continuing the debt reduc-
ton program, began mountaineering
the road while still effecting more
operating economies. Again Hill
axiom was being followed-"Poor tools,
poor work."
A common trait of each Of these
men was Opportunism. Budd used
good times to complete Hills con-
struction ideas. Kenney used de-
preston to rid the road of high in
terest bonds. Gavin cut costs while
still spending large amounts to get
the road in shape for war emery
ency.
The future, admittedly, is cloud
specked. The market prices Of railroad
stocks and bonds answers ominously
what the public thinks about the post
war prospects of an industry now op-
Grating at record capacity.
Great Northern officials are not
blue about postwar prospects but
neither are they optimistic. Here is
what Gavin thinks of some major
postwar probabilities:
A depreSsion-The Great Northern
never has been in bankruptcy or even
financially unsound. 1t has never
possessed a lavish hand in distribut-
ing profits. The most it ever paid was
an 85 percent dividend years ago,
never more than percent through the
boom of the late twenties, only 2 per-
cent now, here, again, a Hill principle
rules return large amount of profit
to the road to keep it fit at all times.
Road and Equipment-If this proves
a long war, railroads may come out of
it in rags and tatters, although many
will be financially sound. The danger
is that, being unable to replace equip
ment or adequately maintain it for
lack Of raw materials, physical assets
may be in a greatly deprecated con-
dition, necessitating costly expendi-
lures, possibly at time of declining
business.
Operating Costs-Great new loads
have been placed on railroad financial
structures wages, vastly great
er taxes, rising material costs. The
postwar era may not bring an equal
decline in ua0oS and taxes n hlISfneSS