Russian Train, Government Ownership.
5 per ceut out of the consumer's dol-1
iar. Out of t,he same dollar the farmer
averages a fraction over id cents, the
intermediary channels of distribution
about 44cents, and the railroads
about 6 cents.
When we start looking for the cul
prit who is to blame for the high cost
of living we will have to look further
ihan the railroad offices or yards. He
is not hiding in a box car or behind
a big mahogany desk, llis name is
Legion. He is not a man. He is a
family. They constitute the unnum
bered army of middle men who can
take a bite out of the biscuit as it
passes from the producer to the con
sumer. They are warehousemen, the
brokers, the draymen and the retail
ers. In short, they are the agents
whom the producer and the consumer
must pay about 45 per cent of the
cost of things for their services. The
railroads collect 6 per ceut. Whether
this is too much or too little, it cer
tainly is not oppressive and seems a
bagatelle in comparison with some of
the other charges we pay without
grumbling. 1 heard, for instance, of
a man who shipped four bundles of
iron rods by a rail a distance of 450
miles. They had to be handled four
times by railroad employes, changing
cars twice. They weighed 365 pounds
and cost for freight 69 cents. The
owner had them delivered to his home
by truck, three-fourths of a mile from
the depot, and paid the carrier 50
cents and did not think it too much,
though it was at the rute of 65 cents
a mile;, while he had paid the railroad
69 cents for hauling the same ship
ment 365 miles. We farmers take a
notion to visit the annual stock shots’.
We pay $2 to ride 100 miles in a
steam-heated, upholstered coach, which
on European roads would be consid
ered too good for anybody except
grand dukes and imperial majesties.
We alight at the big granite walled
station and give our trunk check to
the taxi man, who whirls us across
town with our baggage, and pay $2
for that 20-minute two-mile ride, and
don't holler, because we don’t want
to look cheap. But if we have to pay
23.60 a head for shipping a thousand
pound critter a thousand miles and
sell him for ?S0, we sic our legisla
tures on the railroads and try to tie
them into bow-knots and threaten to
tear up their tracks. It is mostly be
cause we lend open ears to our long
haired, lofseared politicians, who worm
their way into office many times on
the so-called railroad issule. They
will accept free rides from these same !
roads while they are berating them
for overcharges. They don't tell us
that; neither do they tell us that the
railroads of England, whore all other
living expenses are cheaper and where
labor is paid about one-halt what it is
here and where population Is about
ten times as dense to the square mile,
charge for freight 2.32 cents per ton
per mile, instead of 7.41 mills, as
here, and charge passengers 1.53 cents
per mile to ride In cars which run on
four wheels and look about as much
like a passenger coach as our better
live stock oars look like a Pullman.
The fact is, we demand of our rail
roads services such as are given in
no country of the globe, and wherever
such service IS approximated the pre
mium charged is about 2 cents or 4
cents a mile extra. The ordinary pas
senger “wagon," as thev still cal! it
on foreign roads, weighs about as
mach as a moving van, and a string
of them could be pulled, well loaded,
by a. good pair of Percheron horses.
U requires only a 60 or 80-ton loco
motive to move these trains 50 miles
a» hour American coaches weigh
about 40 tons apiece, the new steel
type weigh 60 or 75, and our fast
trains require a 200-ton engine.
Not only in the passenger service
do we require quality, but in the
ireight service as well. When we load
a car of cattle or hogs within 200 miles
of market we don't intend to stay a
week on the way and see them shrink
all the gain we have been putting on
them the last four weeks with 60-cent
corn. We must make the yards be
tween sunset and sunrise, and the
railroads make good. They run live
stock almost on passenger train sched
ule. At their destination they require
costly terminals, so there may be no
congestion of freight. The cost of ter
minals, owing to increased value of
city property, has run into the mil
lions. We also demand car service.
This lias been a mild winter, but a
few weeks of zero weather in the
northwest will produce a need for coal
All Steel Cars. Standard American Equipment
that. will tax the capacity of traffic
to the utmost. We have not forgotten
the winter of 1807-8, when people were
all but freezing to death because
.here were not cars enough to haul
fuel, nor power enough to haul the
cars. This is the situation which may
■V ^£4Wi»l
American Special.—Private Ownership. English Railway—Liverpool to London Capitalization $275,374 Per Mile.
confront the railroads again without
notice. They require money to buy
more equipment and to double track
their lines so that they can move their
trains more quickly. They must also
enlarge, their terminals so they may
avoid congestion. Who will be the
greater gainer from these improve
ments. they or we? Ask the man who
has a few loads of stock bottled up
on the side track losing weight every
hour and losing the top market on
which he had figured this morning.
To supply these immediate require
ments of the railroads, not for their
benefit alone, but for ours as well,
will cost, in the judgment of James J.
Hill, half a billion dollars. These bet
terments during the next five years
will cost $2,000,000,000. Who is to
supply this money? All of us, of
course, as we have in the past; that
is, all who have $500 or $1,000 to pur
chase a railway bond or certificate of
stock. But not now, not now, Unde
Henry. Why not? Why, don’t you
know that railway stocks have gone
tumbling down in the last ten years?
Good old New York Central common
sold for $168 in 1902 and last year it
was as low at 90%; Pennsylvania
common sold for $170 in 1902; it was
down to $106 in December, 1913; Chi
cago A- Northwestern common sold for
$271 in 1902; it was down to $123 in
December, 1913. C\, M. & St }’. sold
for 198% in 1902; it went a low as
96% in 1913, and now hover- around
par, a shrinkage of approximately one
half. I name these roads because they
are well managed and have never been
the football of high finance. Not only
is their stock down, but tin ir bonds,
which used to sell on a r 4 per
cent basis, now scarcely ; ii at all.
Some of our better road 1: ve had
to issue short term notes at >' ; >■ r cent,
which the banker takes on ispicion
at a discount. Some issu • ipment
notes, which means a chatt *1 mort
gage on engines and cars. V. hy is all
this? Simply becatise th > \.*ry best
railroads are doing busine on such
a slender margin of profit that in
vestors, little and big, are afraid that
the day will come, if it is ndt already
here, when they cannot pay their in
terest. Such failure will bring us back
to the situation of 1893, when 29,340
miles of American railroads were in
the hands of receivers.
What is the cure for this threatened
paralysis of our biggest arm of in
dustry? I occasionally hear some off
hand glib reply. "Government own
ership!” If 1 were a big railroad offi
cial put in a swivel chair in the dual
capacity of being trustee for a prop
erty representing a billion dollars,
owned by 84,244 people, half of them
women and children, as is the case
with the Pennsylvania railroad, and
on the other hand representing a pop
ulation of 10,000,000 people who in
1 habit the territory through which my
road passes, and as I sat far into the
night with my associates and subor
dinate officers trying to devise econo
mies that would insure my employers
the stability of their investment,
while we tried as hard to provide the
service required by our patrons, I
think I would feel like throwing up
the sponge and say, "Yes, let us turn
j the job over to the government and
let Barnes and Lorimer and Penrose
i and Boss Cox and Taggart and Roger
Sullivan and that whole kit of patriots
apply their organizing managerial tal
ent. They have made money by com
bining business with politics. I’ll re
j sign, let us put the throttle in their
, hands.”
If the government took over the
railroads, it, of course, would have to
buy them. Confiscation of property
is forbidden by the constitution. They
would cost at least $20,000,000,000,
fifty times as much as the Panama
canal, which isn’t paid for yet and
will not be for 20 years. Of course,
the government could issue bonds and
sell them, perhaps, quite easily with
its guarantee. But who is the gov
ernment? Why «c are—E. Pluribus
Unuin & Co. We little fellows, so to
speak, own a majority of the railroad
banks, or as policyholders in insur
ance companies, and we are buying
bondholders, or as depositors In
mileage, > it her as shareholders or
more railroad stocks all the while.
In 1904 there were only 1183 share
holders in Great Northern; in 1912
there were 17,841. In 1904 there were
368 shareholders in the Northern Pa
cific; in 1912 there were 13,987. In
1904 there were 149,791 shareholders
in 19 of the larger railroad systems;
in 1912 there were 297,575 sharehold
ers in these same roads, an increase
of 98.7 per cent, or nearly double in
eight years. These figures show how
[quickly the railroads are passing out
of the hands of Wall street. If we
don't like the way the New Haven &
Hartford has been managed, why in
the name of the Sacred Cod don’t we
little fellows who own 50 or 60 per
cent of the stock give some descend
ant of Miles Standish our proxies and
tell him to go down to New Haven
and put in a board of directors who
wouldn't treat that fine old road as
they might treat a Jersey cow! take
all her milk and cream for their own
table and after she was worn out and
scrapped throw the carcass to the
wolves of Wall street and toss the
horns and hoofs to the stockholders.
There isn't a big road in the country
which isn't owned by enough stock
holders to take the control away from
Wall street if they don’t like the pres
ent management. Government owner
ship, in the sense of popular owner
ship, is a fine thing. We believe in
it, but most of us don’t know that we
have it already in its essence withcuit
any of the evils which might ensue
if we put the aforesaid patriots in the
place of Elliott, Rea, Earling, Hughitt
and Hill. We have not only practical
public ownership, widely distributed,
but we have absolute government con
trol. When it comes to fixing rates,
issuing passes, equipping trains with
safety appliances and a hundred and
sixteen other matters of regulation,
even down to the way of keeping
1 books, the Interstate Commerce Com
mission, the direct agency of the gov
ernment, is the whole works. How
thoroughly it regulates is apparent
from the fact that when it began busi
ness in 1888 with five commissioners
the annual cost was $97,867. In 1912,
with only two more commissioners,
the cost of regulation was $1,469,689.
The only alternative to outright,
formal, complete government owner
ship and operation of our railroads is
to increase their earning power so
that they can meet their increasing
expense of operation without going
into bankruptcy. This may be done
by allowing them a slight increase
in the pay they receive ’ r handling
freight Five per cent additional is
thought to be sufficient The eastern
roads have petitioned the Interstate
Commerce Commission to permit this
advance. The business men of the
country, which includes the farmers,
are seconding the request with rare
exceptions. Five per cent added to
the rates on the specific items named
above will show how little the added
rate would hurt the individual ship
per. But what would it do for the
railroads and what would it do for
us all? If the 5 per cent were added,
not alone to the traffic of eastern
roads, but to the roads of the United
States, it would add 1100,000,000 a
year to their net revenues. This
would immediately insure the stabil
ity of railroad securities and enable
the roads to sell the securities on at
least a 5 per cent basis. Moreover,
an increase of $100,000,000 in yearly
revenue would pay interest on $2,000,
000,000 of new securities which they
could sell at par and put the money
into new equipment, bigger terminals
and double track. This money would
be put into circulation, two-thirds of it
among workmen who could start at
once to manufacture material and put
the same into service. Improvements
to t,he roads on every right of way
would give employment and requir*
produce to feed men and horses and
thus put money direct into local com
munities. 1 he turning of an army o§
half a million or more idle men, wh<*
are now’ idle because of the partia*
suspension of railroad activity, into
an army of half a million workers,
working full time, would make half a
million better consumers of food, pro
duce and clothing, possibly five times'
half a million, including their famU
lies. Upon the instant that the Inter
state Commerce Commission issuee
its permission for this 5 per cent in.
crease in rates the business of the1
country will break from the bond*
which are now holding it in leash and
we will see such prosperity as the
most sanguine have never expected".
This is the opinion at least of 999 men
out of every thousand who have given’
serious, sober, unbiased and enlight
ened thought to this subject.
As farmers, we have perhaps more
to gain through railroad prosperity
than any other class. It is true wo
have felt their heavy hand when they
took their toll of grain as we shipped
our annual harvest or when they have,
taken their 50 pounds of flesh front
every carcass sent to the yards. BuW
those heavy rates of old which seemed
excessive were perhaps necessary in*
pioneer days when population was
scattered and traffic was light. Those
days have passed. If we still nurse
a grievance for ancient w rongs, let ue
reflect on the gain in the value of our*
farms which they would not possess it*
they were not within hauling distance
to the steel road. Do we stop to con
Mutr inai me. vaiu© oi rami laud in
Montana has Increased 50 per cent in
the last five years owing to the build
ing of new railroads in that state? I'
know personally at this moment of*
one beautiful little valley where they
are raising 80 to 40 bushels of winter'
wheat to the acre, the finest hard
wheat that man ever ate. It is worth
92c in Chicago, but they are feeding
it to the hogs because there isn’t »
railroad within 80 miles. There is one
surveyed, in fact half built; why is it
not finished? Because there is no
money available and the company can
not sell its bonds to advantage. When
that road is completed farm land in
that valley will be marked up 100
per cent. We farmers are “wised up’’
a bit, a; they say out west, and don’t
believe now that the railroad is the
worst ; est in existence.
And the business man, too, had a
second thought It occurs to him now
that it i; better to stand a 5 per cent
increase in freight than lose a 50 per
cent increase in business. That is why
the Chicago Association of Commerce,
as well as other similar bodies, is not
opposing the increase, but are rat,her
favoring it. Honorable Charles A.
1’routy, who, as long chairman of the
Interstate Commerce Commission, has
rendered more decisions on rates ad
verse to the railroads than any other
man, said before a large body of ship
pers, July 16,1912: "I think, gentlemen,
that what we may term the danger
point in the railroad situation has very
radically changed. Twenty-five years
ago the danger point was the discrim
ination between shippers. Twenty-five
years ago the danger point was the
unreasonable rate. Today the danger
point, in my opinion, is neither of
those. The danger, point today, I
think, is the inadequate service and
Inadequate facilities. I think that to
day it is just as much the duty of the
Commission to see that the railroads
are given reasonable rates which will
yield to them a fair return as It is to
see that no unreasonable rate is
charged the shipper, and I believe
this is in the highest interest of the
shipper himself. What 1 desire you to
remember is this, that if that time
comes it will be the duty of the Com
mission to permit that advance. T.hat
would not only be an act of Justice,
which you believers in the square
deal would approve, but which would
also conserve in the highest degree
your interest as shippers.’’
• • •
The case Is up to the jury, before
rendering your verdict you will lift
your eye to read that danger signal
which flames against the sky above
our world of business; it Is the same
signal that stands at every railroad
crossing in the land:
“STOP! LOOK!! LISTEN!!!”
AAAAA/W\
.... .-- --- -- ~ -- » 1 .1. . -J
All Steel Cars. Standard American Equipment.
1892
1912
1892
1912
A Story of Twenty Years
The Following Table Put* the Railroad Situation
MILES OF LINE.
162,397 miles.
248,888 miles.
Increase 83.3%
MILES OF TRACK.
211.051 miles.
370.317 miles.
In a Nutshell:
1892
1912
NOTE
only 17.6%.
Increase 75.8%
NET CAPITALIZATION PER MILE OF LINE
152.348.
961.508.
increase 17.6%
While the trackage increased 75.5%
the uapitaluaiion Increased
1892
Compensation
1912
EMPLOYES
Number 821,415.
«■■■■■ 1468,198.170.
Compensation
Number 1,728,60ft
• $1,268,977,888.
1892
1912
1892
1912
1892
1912
Increase iu number of Employes ....110.5%.
Increase In Compensation ....170.8%.,
TAXES
$34.1*53.495, or $290 per mile of line. ,. (
120.873,472, or $4$5 per mile of line.
Increase 234.9%
REVENUES FROM OPERATION
■■»■■■■ $1,171,407,000. _
- $2,870,736,0*0.
Increase 145.1%
EXPENSE OF OPERATION
$780,997,008.
■*1.990.198.000.
Increase 184.8%
The Increase In number ol locomotives In 20 years was 88%. but t
crease In weigh* and power was 235.7%. Tbe Increase ,n number „„ !,~r |n„
’72F, h-.it..tholr Increase. In capacity. was 278.2%. Th fi^?ni» lin/ and
crease In trackage (mostly double track), in excess of new .*? »t><e anenaw
In the rebuilding of road to eliminate grades and curves, all at tne exp taw
of dividends, explains tbe railroads Increased efficiency In spite or a erso
conditions.