Adapted from the Illustrated Pamphlet, So Entitled.

Issued by the New York Central and Hudson River Railroad Company.

The A. B. C. of the Matter.

"There has been much wild talk as to the extent of the over-capitalization of our railroads. The census reports on the commercial value of the railroads of the country, together with the reports made to the Interstate Commerce Commission by the railroads on their cost of construction, tend to show that, as a whole, the railroad property of the country is worth as much as the securities representing it, and that, in the consensus of opinion of investors, the total value of stock and bonds is greater than their total face value, notwithstanding the 'water' that has been injected in particular places. The huge value of terminals, the immense expenditures in recent years in double-tracking and improving grades, roadbeds and structures, have brought the total investments to a point where the opinion that the real value is greater than the face value is probably true."

(From President Roosevelt's Decoration-Day address at Indianapolis, May 30, 1907.)

The X. Y. Z. of the Situation.

"An army of more than 1,500,000 men is employed directly in the operation and maintenance of the railroads in the United States, and millions of other men are furnished employment indirectly in the mines, the forests and the factories, supplying the railroads with approximately one and one-quarter billions of dollars' worth of material and equipment annually consumed.

"These are wonderfully interesting and impressive facts; but the fact of greater interest and worthy of the most careful thought of every citizen of this country is that this vast army of men engaged in producing the commodity of transportation at an average cost more than 40 per cent lower than is shown by any other country is paid an average wage more than 50 per cent higher than is paid in any other country where railroads exist."

(W. C. Brown, before the Michigan Manufacturers' Association, June 22, 1908.)

LESSON I.

Freight Rates and the Clothes We Wear.

Whom have we here?

Eleven different types of American citizens, standing in a row, clad in the varied uniforms or togs of their several occupations or leisure from hod-carrier to the dude in dress suit and opera hat.

These men all live in the Mississippi Valley.

Their clothes were made in New England.

They paid the railroads nine cents apiece for transporting their clothes, including shoes and hats, from the point of manufacture to the Mississippi Valley.

The combined freight charges on all the clothes worn by the eleven men in the group, including shoes and hats, was less than one dollar.

If freight rates were advanced 10 per cent the increased price to these men on their entire wearing apparel would be less than one cent each.

If they have to pay more than that per cent it will not be because freight rates are advanced.

LESSON II.

Freight Rates and Agricultural Implements.

Consider the McCormick harvester. It mows, gathers, binds and stacks the bearded grain, while its proud possessor cracks his whip above the backs of his three-horse team. It has banished the nightmare of farm mortgages from the great prairies of the West.

This particular harvester we are considering is cutting grain one hundred miles west of the Mississippi River. It was built in Chicago and sold for $130.

The farmer paid $1.76 to have it brought to him from Chicago, three hundred miles away.

If freight rates were advanced 10 per cent the cost of the harvester would be increased seventeen and one-half cents.

LESSON III.

Freight Rates and Cooking Utensils.

Next to the harvester the modern kitchen cooking range has added more joys and years to the farmer's life than anything in the cornucopia of modern civilization.

Here is a standard range. It is a thing of beauty as well as a means for cooking everything your mother used to cook and much more.

The freight on a steel range, weighing from 400 to 500 pounds, from Detroit to points in the Mississippi Valley, approximates from $2 to $2.50 per stove on stoves which retail at from $55 to $60 each.

An increase of 10 per cent would add from twenty to twenty-five cents to the cost of the stove, which, divided by the life of the stove, taking the low average of ten years, would add one and one-half to two cents per year to the cost.

On heating stoves the increase would be about one-third less.

LESSON IV.

Freight Rates and Refrigerators.

What are the cold facts about refrigerators?

What cold storage is to the whole people, the modern refrigerator is to the individual family.

It preserves all things sweet and clean and wholesome.

Now the freight on a refrigerator, such as is used by the ordinary family, from Belding, Mich., where they are manufactured in large quantities, to New York is approximately seventy-five cents.

An increase of 10 per cent would add seven and one-half cents to the cost of the refrigerator, delivered in New York City.

LESSON V.

Freight Rates and Household Furniture.

Ever since Grand Rapids became the furniture hub of the Union there has been no excuse for any American family being without its antique or modern dining room set.

Look at this suite consisting of a solid table, six chairs, sideboard and china closet, etc. It could be bought F. O. B. at Grand Rapids for from $55 to $75, according to the wood and finish.

It weighs approximately 750 pounds and the freight from the factory to Chicago would be $1.60.

An increase of 10 per cent would add sixteen cents to the cost of all this furniture.

LESSON VI.

Freight Rates and a Business Suit.

Behold this business suit which no one would be ashamed to wear.

It might cost anywhere from $10 up to $35, according to the reputation of the tailor or the rent and advertising rates he pays.

The freight rate on such a suit of clothes, including hat and shoes, for a distance of 300 miles from any of our large jobbing or distributing centers is approximately three and one-half cents.

A 10 per cent increase would add a little more than one-third of one cent to the cost of this suit, and it would add no more if it cost $50 or $100.

LESSON VII.

Freight Rates and "King Cotton."

"Befo' de wah" cotton was king. Of our exports it still leads all our domestic products, having no second in sight.

If the entire cotton crop of the United States was compressed into one bale its value would be about $750,000,000.

Of this bale in 1908 the railways got a little "jag" worth according to the Interstate Commerce Commission $12,394,000, or less than 2 per cent.

An advance of 10 per cent in rates on cotton could not add more than one-fiftieth of a cent per pound to the price of cotton.

LESSON VIII.

Freight Rates and a Sack of Flour.

Minneapolis, as all good little school children know, is the seat of the flour industry of the United States.

If they do not learn this at school it is impressed upon their receptive minds by every illuminated billboard and painted rock that meets their gaze from Eastport to California.

There are half a dozen brands of flour ground at Minneapolis and every one is better than all others.

The rate on this incomparable product in carloads from Minneapolis to New York is 25 cents per hundred pounds.

That is 12½ cents per fifty-pound sack.

This flour is sold to the consumer in New York at approximately $1.85 per fifty-pound sack (or it was when this was written).

An increase of 10 per cent in freight rates would add but one and one-quarter cents to the price of a fifty-pound sack, or a little less than two one-hundredths of one cent per pound.

The freight rate on a fifty-pound sack of flour from Minneapolis to Chicago is five cents per sack. An increase of 10 per cent in rates would add only five mills per sack between these points, or one one-hundredth of one cent per pound.

LESSON IX.

Freight Rates and Dressed Beef.

The reason cattle are butchered and carried to the consumer as dressed beef rather than driven to market on foot or hauled as live stock, is that the freight charge is less and the beef arrives in better condition.

Little children in New York and Boston appreciate this, if the wise grown-ups of the West sometimes seem to doubt it.

The rate on dressed beef from Chicago to New York is forty-five cents per hundred pounds. The average price of this beef to the consumer in New York is (or was) approximately twenty-five cents per pound. A 10 per cent increase in freight rates would add less than five one-hundredths of one cent per pound.

If freight rates were advanced 10 per cent, the increased cost in New York City of a two-rib roast of the best quality, weighing eight pounds, retailing for $1.92, would be less than one-half cent.

Surely this is not an excessive price to pay for National prosperity and industrial peace.

LESSON X.

Freight on Eggs, Butter and Poultry.

Eggs were cheaper when Columbus experimented with them than they are now, but it cost more to carry a dozen eggs or a firkin of butter ten miles in 1492 than it would to carry them 100 miles now.

The rate on butter and eggs from points in Eastern Iowa to New York—a distance of approximately 1,200 miles—is eighty-four cents per hundred pounds. On dressed poultry from the same points to New York the rate is ninety-six and one-half cents.

The eggs are sold to the consumer by the dozen and the other commodities by the pound; and the consumer pays every farthing of freight that has accrued from the time the egg is laid, which he buys in the "original package," or as dressed poultry, or from the time the cow is milked, from which the butter is made.

An increase of 10 per cent would add eight one-hundredths of one cent per pound to the price the consumer pays for butter and eggs, and it would add nine and one-half one-hundredths of one per cent per pound to the cost of dressed poultry, for which he pays from twenty to thirty cents per pound.

LESSON XI.

Freight Rates and Leather Belting.

Some little children and many of their mothers do not know that a great deal of the power that makes the wheels go round in this industrial beehive is transmitted by belting.

The shops of the Lake Shore & Michigan Southern Railway at Elkhart, Indiana, are equipped with 13,288 running feet, or practically two and one-half miles, of leather belting. This belting cost the railroad company $6,235, or an average of 46.9 cents per running foot. The belting was shipped from Boston to Elkhart, a distance of 937 miles. The total freight charges amounted to $18.37, or fourteen one-hundredths of one cent per running foot. An increase of 10 per cent would add $1.83 to this cost, or fourteen one-thousandths of one cent per running foot.

This belting, moreover, cost the railroad company $1,082 more than it would have cost at the prices prevailing in 1899, representing an increase of 21 per cent. During this same period there was no change whatever in the freight rate.

LESSON XII.

The Railways and National Development.

Now listen to the sober words of the one man who has perhaps given more official attention to the subject than any other citizen of the republic:

"Without regard to the personnel of railroad officials, without regard primarily to the interest of stockholders, but in the interest of public welfare and national prosperity, we must permit railway earnings to be adequate for railroad improvement at advantage and profit.

"To my mind it is a most impressive fact, so great as to elude the grasp of imagination, that the railway traffic of the country fully doubled in the first seven years of this twentieth century. This enormous addition to the volume of transportable goods overtaxed, as you know, the existing facilities, and the resulting condition perhaps accounts for much of the hostility which has been manifested in various quarters. For the man who has raised something by hard labor or made something with painstaking skill, which he could sell at a handsome profit in an eager market, and finds that he cannot get it carried to destination, and so sees his anticipated gains turned into a positive loss, is naturally exasperated and unthinkingly 'blames it' on the railroads, and is ready to hit them with anything he can lay his hands to; and as the state legislature seemed to be the most convenient weapon he wielded it for all it was worth.

"I dwell upon this a moment further, because it seems plain to me that the prosperity of the country is measured and will be measured by the ability of its railroads and waterways to transport its increasing commerce. With a country of such vast extent and limitless resources, with all the means of production developed to a wonderful state of efficiency, the continued advancement of this great people depends primarily upon such an increase of transportation facilities as will provide prompt and safe movement everywhere from producer to consumer; and that we shall not secure unless the men who are relied upon to manage these great highways of commerce have fitting opportunity, and the capital which is required for their needful expansion is permitted to realize fairly liberal returns."

(Hon. Martin A. Knapp, Chairman Interstate Commerce Commission, in "Annals of the American Academy of Political and Social Science.")