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Show THE RELATION OF RAILROAD RATES TO GENERAL BUSINESS. To the Business Man: No matter mat-ter how objectionable an advance in freight rates may be to us personally, we must recognize that an improvement improve-ment in general business is dependent on a betterment of operating and financial conditions of the railroads. That the operating results are most unsatisfactory is readily seen by the latest INTER-STATE COMMERCE COMMISSION reports, which show that for the nine months ended April 1st, 1910, eleven railroad systems, all West and North of a line drawn from Chicago to St. Louis, compared with the same roads for the same period in the previous year, bad their gross earnings increased about $50,000,000.00, while their net earnings showed a decrease de-crease of $3,500,000.00, and for the month of March, on the same comparison, compari-son, they show an increase of $7,000,-000.00 $7,000,-000.00 in gross and a decrease of $905,000.00 in net earnings. Attention is called to the fact thnt the wage increases, (except a small J amount.) were not in force during thi-period, thi-period, and from now on these will greatly increase the operating co;t. These same railroads had their taxe:- Increased over the previous year $2,500,000.00, or 14 and have to pay higher rates of interest on their loans. These roads covering the most prosperous pros-perous part of the country may be considered con-sidered representative of general railroad rail-road conditions. During the past three years of poor business, railroad expenditures for niaintainance were necessarily at the lowest point, and in consequence their motive power equipment and tracks now demand a greater proportion of operating expense. No provision has been or is being made for the growing demands of the country, and as transportation trans-portation is the backbone of business, Its weakness or inefficiency cripples every other condition; because all products prod-ucts are valuable in the ratio with which their accessibility to the consuming con-suming market. It is most important to the shipper, that railroads at all times are fully equipped to take care of an Increase of his business. The first eight months of 1907 demonstrated that the railroads could not handle the business then offered of-fered with any degree of satisfaction. The financial conditions since have not permitted them to even maintain their then position. If the then volume of business were to come back supplemented supple-mented by the three years growth of the country in the Interval, transportation transporta-tion would be paralyzed; and what would that cost the shipper compared with a reasonable advance in freight rates now? Such an advance would provide the means for avoiding this impending disaster. The iron horse needs to be kept in good condition for the same reason as the living horse used for transportation. The teamster team-ster knows that if his horse is not well shod, well groomed and well fed. and his harness and wagon kept in good repair, that all he will save on such economy will be many times wasted in the efficiency of his transportation, trans-portation, and also add great expense to the shipper. It is exactly the same with the railroads: the shipper has a right to: demand that transportation be ample and efficient; the success of his business and the development of the country are dependent on it. The Investor: To do this, the railroad rail-road must show adequate returns to maintain proper borrowing credit and present a promising source of investment invest-ment to procure the necessary funds to improve and develop the property as needed. It is neither the railroad president nor the shipper that controls the situation; it is the investor alone who holds the key; without his uninvested un-invested dollar the railroad cannot extend ex-tend or improve, no matter how great the needs of the shipper or the country may be. With all the increasing cost of operation, op-eration, supplemented by ever increasing in-creasing and burdensome legislative restrictions concerning their earnings, in face of the fact that the average dividend rate on railroads was less than 3y2- per cent for the past six years, and the United States Supreme -Court in the case of the Consolidated Gas Company stated that "6 per cent was a fair return on money invested In public utilities," with the average freight rate in 1909 of three-quarters of a cent per ton per mile, the lowest in nine years, the average passenger rate per mile, one and nine-tenths cents, the lowest ever reached, is it any wonder won-der that the investor holds back and the Bankers demand high interest rates from the railroads? The railroads need $2,000,000,000.00 to put their lines in proper condition, and to increase their terminal facilities at all points that are even now a necessity, and $1,000,000,000.00 more for modern new motive power and equipment to move their freight with promptness and economy. econ-omy. Where can they get the money? Only by increased earnings from advanced ad-vanced rates, and by so doing better their credit by attracting the uninvested uninvest-ed dollars that are now going to other more attractive but less productive investments. in-vestments. What will the advance cost the Ultimate Ul-timate Consumer? Poor's Manual saya the average haul of all freight in 1908 was 142 miles. The average rate in 1-1909 was three-fourths of a cent per ton per mile. The average total rate for the average aver-age total haul, assuming it to be the same as 190S, would be $1.06 per ton. An advance of 10 on this rate would increase the cost 10 cents per ton, or 1-200 of a cent per pound. An advance ad-vance of 10 on the present specific rates would increase the cost of 100 pounds dressed beef in New York, shipped from Chicago, 4 cents; 100 pounds canned fish in St. Louis, shipped from Maine, 1 8-10 cents; 100 pounds flour in New York, from Minneapolis, Min-neapolis, 2 cents; a suit of clothes in Chicago, from Boston, 's cent; the same for a woman's suit. On a man's outfit, co'jt, trousers, shoes and hat, New England to Mississippi Valley, not to exceed 1 cent. The Ultimate Consumer can multiply these illustrations illustra-tions indefinitely. The manufacturer, jobber and retailer could easily absorb this slight advance, because, if his business increased but one unit, that would more than pay the increased cost on one hundred units. Railroad net earnings thus Increased, the railroads would have a ready market mar-ket for their securities, and with the money thus obtained again start all the business and industries now comparatively com-paratively idle that are directly or indirectly in-directly dependent on their property. The working men would be fully employed, em-ployed, their families would again purchase pur-chase freely, and. that means good business for everyone. There are 1,500,000 railroad employees. em-ployees. It takes 2,500,000 men to supply sup-ply what the railroads need, and a vast number of men are employed in supplying sup-plying the personal needs of the above 4,000,000 men and their families, representing rep-resenting 16,000,000 people. Every kind of business is dependent in some measure on railroad prosperity. High cost of living: If it had not been for the encouragement given railroad investors in the past, where would we have been to-day for our food supply? They opened up thousands of miles of undeveloped and unproductive land and yet our food is high, because of lack of supply; our consumption is increasing in-creasing faster than our food production. produc-tion. If the railroad investor stops as he now has, there will be an advance in food rates soon that will be far greater than increased freight rates. High food means high labor, and high labor means high everything. Therefore There-fore the Ultimate Consumer and the State and National Governments should be interested-in developing land that will produce bountiful food products. Half of the country west of the Mississippi Mis-sissippi is not used, and will not be until covered with railroads. Who would want to build roads In unproductive unproduc-tive lands when those in cultivated country will barely pay the lowest rate of interest, and the owners and managers man-agers are being harassed and maligned as in no other business? This condition will only improve when the business man realizes that the investor does not provide the source of his own investments. He waits for you to do that in some desirable de-sirable form. By your individually letting let-ting things drift, and doing nothing, your legislator, with no business experience, ex-perience, hearing no advice and receiving receiv-ing no direct information, which he gladly would from you (quite likely you do not even know his name), listens lis-tens to the only voices heard; the agitator agi-tator or the aggressive shipper whose views of the business world are obtained ob-tained by looking out of the small hole of a funnel directed at his own plant, unconscious of other conditions of far more importance to his own business than the freight rates. Such men as these by their vociferous vigor, have stirred up a popular a'nti-corpora-tion agitation that has cowed all 'parties, 'par-ties, and they are so scared of being charged as owned or bought that all questions of principle, equity or the general good are ignored. The railroad rail-road man draws his salary, whether the road pays or not; he does not own it. If he does say anything he Is sat upon. The stock-holders as a body are defenseless. You are the sufferer and the only one who would be listened to. Will you not study your own interests, inter-ests, find out your legislator's name, and tell him the real situation? Otherwise Other-wise we must wait until grim necessity neces-sity starves out the present anti-railroad fever. June 6, 1910. T. . A. GRIFFIN. (Advertisement.) |