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terests of the nation. It is a trite saying that when the business interests of the country are prosperous the railroads prosper ; but is not the converse of that proposition true? Who can say how much the prosperity of the country depends on the outcome of the more than seven thousand million of dollars invested in these iron highways ? Or how much depends on the honest handling, wise management and economical disbursement of the $800,000,000 of yearly earnings resulting therefrom? The trust reposed in the railroad magnates who control a system, the investments in which exceed by more than a thousand million dollars all the gold and silver money of the world, is a most potent element for good or evil in all the departments of trade and commerce, and bears directly or indirectly on the welfare of every citizen of the land.
The suspension of dividends on some important lines, such as the Lake Shore and Michigan, and the marked reduction in other lines of still greater importance, caused profound apprehension and distrust as to the value of all railroad property, resulting in a condition of the stock market bordering on a panic.
As an illustration of the terrific decline in prices, we give below the highest quotations of 1884 and the lowest in 1885 of a number of the most important and stable roads east and west, such as were not affected by serious financial embarrassments, and also the quotations of several others of magnitude which were financially embarrassed :
Baltimore and Ohio..
59 21 214 16% 52 47 13}
In such a cyclone colossal fortunes were swept away like chaff before the wind, and many of the old and reputable stock houses were obliged to succumb to the storm. Unquestionably the apprehension and distrust was too deep to be altogether warranted by the facts, and though long delayed the looked-for reaction came at last and a considerable portion of the decline has been recovered. It is believed in the best-informed circles that the conditions are improving; that we may expect a better showing in the next annual reports—certainly in those for 1886.
The business of the country is slowly but surely recovering its wonted tone. Iron, the barometer of the business atmosphere, shows more activity in all its departments, both as to demand and price. The fires are being rekindled at the furnaces and forges and rolling mills all over the land, which gives the sure promise of general recuperation. The railroad interest will not be an exception. It is a material factor in the process of the rehabilitation of trade and commerce, and must always, if wisely managed, reap its full share of the general prosperity. Dividends so large as those of the past decade are not to be expected. The rate of interest is now, and is likely to be for years to come, much lower than in the past, and holders of railroad shares must accept the common fate of other investors and be content with a fair relative return for their capital.
This assured, and the general prosperity of the country must follow. The railroads are the arteries through which the everthrobbing heart of labor sends the life-blood of trade and commerce to enrich the land; which builds up our seaports, crowds our wharves and ladens our ships, adds to the grandeur of our inland cities, increases the value of our farms and promotes the welfare and prosperity of all; and these arteries must neither be choked nor clogged by the selfishness and greed of these corporations, or ruptured by the insane rivalry and exterminating wars of competing lines. Their productiveness to the shareholder and their beneficence to the State and the people depends upon the integrity and wisdom of the management.
It is an old legal maxim “That all corporations are supposed to be created for the public good,” and if the railroad managers were wise enough to see that their highest prosperity depends upon just how far they fulfill this maxim and promote the public good, there would be no such antagonism between them and the people as we now see, and their own interests would at the same time be conserved. A recent writer thus speaks of the ideal railroad manager: "Wielding an unlimited and arbitrary power within the domain of his own line of transportation, and able to control, in a greater or less degree, the profits realized by those engaged in all other industries, he must, in addition to the knowledge, skill and executive ability required to manage so large a business under ordinary circumstances, also be possessed of all the varied stores of information, the reserve resources of mature thought, which mark the learned political economist and the wise statesman, and which will enable him to determine what will promote the growth of all other industrial pursuits, because it is only by promoting their prosperity that he can secure that of the interests which he represents.”
The railroad officials and managers are the custodians of a double trust, the magnitude of which can scarcely be exaggerated; first, to their creditors and shareholders requiring a prudent, honest, faithful management of the immense capital entrusted to their care; and, secondly, to the Government that created for the public good the corporations they control, and the people who support them, both of whom have a right to demand an enlightened, just—nay, liberalpolicy in all their dealings between them. The railroad official who is unfaithful to either of these high trusts incurs a fearful responsibility, and the professional “railroad wrecker” is a conspirator against the best interests of society, and the common foe of humanity.
RAILROADS OF NEW JERSEY.
We took occasion, in our report of last year, to speak of the high value, both as to cost and producing power, of the railroads of New Jersey as compared with the average value of all the roads in the country, and showed that the value per mile was greater than that of the roads of any other State. We then stated that with only 1,871 miles of railroads, the number of passengers carried and tons of freight moved was greater than that of any other State, save four-New York, Pennsylvania, Ohio and Illinois—and with slight modifications the same facts remain as a marked distinction of the New Jersey roads for the past year.
STATISTICS-LENGTH OF LINE, &C.
The total mileage of main line of railroads in New Jersey at the close of 1884, was 1,908 2015, miles, an increase of 36-4078
978 miles over that reported in 1883. The full statement shows 1,90810105 miles of main line; 510,%miles of double track ; 1,003-48% miles of sidings, making 3,422-1310036 miles total length of track, considering double track and sidings as so much additional single track. Of this there are 1,939 1023 miles of steel rail, and 1,482808% miles of iron rail. We venture to repeat the statement made last year in this connection as an interesting fact.
The area of the State of New Jersey being 7,815 square miles, and the total mileage of railroads, main line, being 1,908,201,77 miles, gives one mile of railroad to 4166 square miles of territory, which is a greater ratio than that of any other State. The only State that approaches the same percentage of miles to territory is Massachusetts, with 1,953 miles of main line, and an area of 8,315 square miles, being one mile of road to 42 square miles of territory—the difference between these two States being so slight as to be striking.
Since January 1st, 1885, articles of association have been filed in the office of the Secretary of State, providing for sundry extensions and connecting lines of railways, which, if carried out, will add, perhaps, fifty miles to the railroad mileage of the State. The details of these projected roads will be found in the Appendix, marked Exhibit C.
FINANCIAL STATEMENT-INVESTMENTS REPRESENTED IN NEW
The cost of the 1,908 2016 miles of main line in New Jersey, including all double track, sidings, structures, equipment and all other corporal property, and also including the roads outside of the State operated under New Jersey charters, estimating the same by the money invested therein, viz., capital stock and debt, is $247,362,185; being an average of $128,306 per mile.
ACTUAL COST AS REPORTED BY THE SEVERAL COMPANIES.
The latest official statement of the actual cost of the roads accessible, is given, in Poor's Manual for 1885, as $215,251,975, being an average of actual cost of $114,435 per mile.
PASSENGER AND FREIGHT TRAFFIC.
The number of passengers transported over the roads of the State, for the year 1884, was 22,558,047, and the tonnage of freight moved 15,063,445 tons, exceeding, in both number of passengers transported and tons of freight moved, the railroad systems of other States having three times the number of miles.
The gross earnings from these sources, freight and passengers, of all the roads in the State for 1881, were $30,919,622, averaging $16,203 per mile. Allowing 60 per cent. for operating expenses, which is considered a liberal estimate, and is above the average of all the roads in the United States, would leave as net earnings, $12,367,849; add to this the revenue from miscellaneous sources, estimated at $3,500,000, and we have as total $15,867,849, applicable to interest, and dividends and betterments. A sum that would more than pay six per cent. per annum on the total investments—capital stock and bondssay $247,362,185.
The average net receipts from all sources, from the above showing, is $8,315 per mile, and, therefore, whether we estimate value on cost, traffic, gross receipts, or net receipts, the railroads of New Jersey exceed in value, per mile, those of any other State, and have more than double the average producing power, per mile, of all the roads of the United States.
It has already been shown that the average dividends for the past year on all the roads in the United States, is a fraction less than 2.5 per cent. Assuming the above calculation in regard to the earnings of the New Jersey roads to be correct, the dividends earned thereon is more than double the average of the United States; and we believe, although we have not all the figures at our command to definitely prove our conclusions, that the dividends actually paid in 1884 will reach six per cent. of the total share capital of all the roads in the State. Of course, some roads have paid more and some less. These figures are given not only to show the gratifying condition of the railroad interests of the State, but also to draw therefrom the just inference that their taxation must bear a just relation to the great value
of their property.