THE PLIGHT OF THE RAILROAD
Remember that the Railroad is the big man in the American business family,
the very head of the house, you may say. Sick or well, he dominates his
brothers--even that cool, calculating fellow whom we delight to call "the
Banking Interests." All America pays toll to transportation. And, inasmuch
as the steam railroads are its dominating form of transportation, the
entire country hangs upon them. In the long run this country can prosper
only when its railroads prosper.
Do you wish to dispute them? Before the facts your contention will not
hold very long. According to the last census more than 1,700,000 persons
were directly employed upon the steam railroads of the United States; some
2,400,000 in industries bearing directly upon the railroads--lumber, car
and locomotive building, iron and steel production, and the mining of
coal. It is a goodly number of folk whose livelihood, or a large portion
of it, comes from an indirect relation to the railroad. It has been said,
with a large degree of statistical accuracy, that one person in every ten
in the United States derives his or her living from the railroad.
Perhaps you are not one of this great family of 10,500,000 persons--more
folk than dwell in the great state of New York, including the second
largest city upon the face of the world. Granted this--then probably you
are one of the 10,000,000 savings-bank depositors in the United States. If
you are, you are an indirect holder of railroad securities. The
savings-banks of this country have many, many million dollars of their
savings invested in railroad bonds. If you have not even a savings-bank
account let me assume that you have a life-insurance policy; there are
three life-insurance policy-holders for every savings-bank depositor. The
value of every one of those 34,000,000 policies depends on the wealth that
is locked up within the strong boxes of the life-insurance companies. And
a very great proportion of that wealth is expressed in the stocks and
bonds of railroad companies.
Try as you may, you cannot escape the dominance of the railroad in
financial and industrial America. You might have neither savings-bank
account nor insurance policy of any sort, yet the railroad would touch you
constantly, through both your income and your outgo. If you were a city
man, it would touch you not only in the prices that you pay for milk and
meat and vegetables, but for the rent of your house or apartment. As I
write, the entire East is panic-stricken for fear of a coal famine, faces
steadily rising prices. The production at the mines, despite a scarcity of
labor, has not been far from normal. But the railroad has failed in its
part of the problem--the providing of sufficient cars to transport the
coal from the mines to the consumer. It has been hard put to find cars to
move the munitions of war from the interior to the seaboard towns. And the
coal mines, because of the lack of railroad cars, have been unable to
relieve the situation. So panic has resulted. Upon its heels have come
similar, if somewhat lesser panics over the congestion and lack of
delivery of foodstuffs--conditions which have been reflected in rises in
the prices, if not in the value of most foods. These prices already have
reached higher figures than at any time since the Civil War. Today they
are nearly even with those which prevailed during the dark days of the
sixties. And even if they are due directly to crop shortages and abnormal
exports they still are a reflex of the railroad's intimate touch with
every man, woman, and child all the way across the land.
Sitting on the porch of his home at dusk, the farmer looks out over his
broad acres, sees the great industrial aids that American invention has
given him for the growing and the harvesting of his crops and forgets,
perhaps, that on each of these mechanical devices he has paid a toll to
the railroad. But when he looks to his wheatlands he must recall that it
is the railroad that carries forth their crops--not only to the cities and
towns of the United States, but to the bread-hungry land, far overseas. In
those markets he competes with the wheat from lands so far distant that
they seem like mere names wrenched from the pages of the geography
book--Argentina, India, Australia. Because of this alone, it is nationally
important that the steel highways which lead from our seaport gateways
inland to the wheat and corn fields be kept healthy and efficient. They
have become integral parts of that broad national policy which says that
the United States is no longer isolated or insular but one of the mighty
company of world nations.
Will you permit me for a moment to enlarge upon this point--this
competition between our farmer of the West and the farmer of the Argentine
Republic, of India, of Australia, and of the nations of the Baltic Sea in
the market of the consuming nations of the world? As the wheat fields of
each of these nations are nearer tidewater than the wheat fields of the
United States, it long ago became necessary for our railroads to lower the
transportation rate for grain in order that the American farmer might not
become submerged in this great international competition. That this has
been done, a single illustration will show:
A bushel of wheat today is transported from the center of the great
granary country of our Northwest or Southwest to tidewater--an average
distance of 1,700 miles--for 27 cents. This is at the rate of .53 of a
cent--a minute fraction over half a cent--per ton-mile. The average
ton-mile rate in Great Britain, 2.30 cents, as applied to our average
grain haul in the United States of 1,700 miles, would make the
transportation cost of American wheat four and one-half times as much, or
$1.21. The American farmer owes a far greater debt to the railroad than he
sometimes may believe. He may have suffered under the oppressions and
injustices of badly managed roads--may yet be smarting from these
oppressions and injustices. But how much greater would be the oppression
and injustice of a high grain rate such as I have just shown? And if such
a rate were imposed upon him, would he be able in an average year to grow
wheat at a profit, to say nothing of being able to compete with it in the
broad markets of the entire world?
* * * * *
A minute ago and we were speaking of the abnormal prosperity of the
railroads. The flood first descended in October, 1915. It rapidly mounted
in volume. The railroads declared embargoes, first against this class of
freight and then against that. Solicitation ceased. The bright young men
of their traffic forces were set to work helping the overworked operating
departments, tracing lost cars and the like. The backs of their operating
departments were all but broken. I myself saw last winter on the railroads
for a hundred miles out of Pittsburgh long lines of freight cars laden
with war munitions and other freight making their slow and tedious ways
toward tidewater. I saw Bridgeport a nightmare, the railroad yards of
every other Connecticut town, congested almost overnight, it seemed. The
New York terminals were even worse. For a long time it seemed as if relief
might never reach them.
It seemed wonderful, but it was not. It seemed like millions in railroad
earnings, but it was not. Translated into the unfeeling barometage of
percentages it all represented but five and one-half per cent on the
actual value of the railroads of the United States. And that, compared
with the long season of lean years that had gone before, was as nothing.
Take the season of years from 1907 to 1914--a season for which the
statistical records are now complete. Despite the great financial panic of
1907, these were, in some lines of business, mighty prosperous years. The
output of automobiles was to be measured not in hours but in the very
fractions of minutes. You might figure the earnings of the "movies" well
into the millions each twelvemonth; they were building new theaters in all
the cities and the bigger towns, almost overnight it seemed. Manufacturing
and selling, nationally speaking, were up to the average. Yet in those
very years, it was necessary for some of our very best railroads--the best
operated and the best financed, if you please--to dip into their
previously accumulated assets to pay the dividends which they had promised
to their stockholders, in several cases to either lower or omit dividends.
And some of the best of these were also compelled to pinch their
maintenance expenses to a point that brought them close to the safety line
in operation, or even beyond it.
And what of the weaker roads--the roads upon which whole communities,
whole states, if you please, are frequently absolutely dependent? What did
these roads do in such an emergency? The record speaks for itself. The
best of these second-class railroads made no secret of the fact that they
were cutting down on maintenance in order to pay their dividends or the
interest upon their mortgage bonds. The worst of them simply marched down
the highway to bankruptcy. At no time in the history of this country has
as much of its railroad mileage been in the hands of receivers as today.
If you are in that glorious company of self-appointed patriots who
violently proclaim themselves at every possible opportunity
"anti-railroad," you may be asking me now why so many of our roads have
entered bankruptcy. You may be asking me if it is not due in some cases to
bad location, and in others to inefficient or dishonest management. I
shall reply to you by saying that perhaps fifty per cent of the railroads
which are in bankruptcy today are there because they never should have
been constructed in the first place and because of the financial
management. The lack of judgment, ofttimes the sinister motives that
brought them into being are now being paid for and paid for dearly. And in
the second place, I will take no issue with you as to either carelessness
or dishonesty in management of some of our railroads.
"Why is it that every investigation of a railroad nowadays shows such a
rotten condition throughout its affairs?" asked a distinguished economist
at a dinner in Chicago last winter.
E. P. Ripley, the veteran president of the Santa Fé, answered that
question.
"It is because a road is never investigated until it is morally certain
that its affairs are rotten," said he, and then told how but one or two
rotten apples would send their foul odors through an entire barrel and so
seemingly contaminate its entire contents. Would you blacken a whole
company because a few of its members have erred? Take another instance. A
club for a while shelters a genuine blackleg. Are we to say that, because
of this mere fact, its other members are not as good as any of us? So it
is with the railroads. You cannot point even the finger of suspicion to
such properties as the Santa Fé, the Burlington, the Pennsylvania, the
North Western, or the Baltimore and Ohio railroads--to mention a few out
of many, many instances. These are good roads; in some instances because
they have been extraordinarily well located, but in most instances because
of their continuous enlightened management. Yet some of them have been
hard put to it of late to maintain their dividend obligations to their
stockholders. And many roads have been compelled to lower or else suspend
entirely the dividends paid in the years gone before.
* * * * *
"How about efficiency?" you may interject.
You are not the first to ask that question. It was asked several years ago
by a distinguished citizen of Boston--Louis D. Brandeis, now a justice of
the Supreme Court at Washington. In the course of a rate hearing in which
he appeared as counsel, Brandeis asked the question, then answered it
himself.
"I could save the railroads of the United States a million dollars a day,
by applying the principles of modern efficiency to their operations," was
his quiet answer to his own interrogation.
The remark was a distinct shock to the railroad executives, to put it
mildly. Some of them were angered by it. The wiser ones, however, went
home and sent their secretaries scurrying out after all the books on the
then new science of efficiency that could be found.
The more they studied efficiency the less these wise men were inclined to
anger against Brandeis. Some of them found that they had been practicing
efficiency on their properties for a long time past--only they had not
known it by that name. They had been rebuilding whole divisions of their
lines, relocating and reconstructing them so as to lower grades and iron
out curves--all to the ultimate of a more economical operation of their
roads. A bettered railroad means invariably a cheaper one to operate. The
saving in grades and curves--no matter what may be the initial cost--means
a more than proportionate saving in fuel cost, as well as in wear and tear
upon the track and cars.
Remember, if you will, that one of the biggest things that efficiency
spells is economy. And economy is always a popular virtue in railroading,
particularly among those gentlemen whose only interest in the railroads
arises from the fact that they own them. If greater efficiency meant
greater economy--well, perhaps it was just as well that that smart
attorney from Boston made his remark at the rate hearing, only perhaps he
might have phrased it in a little less violent fashion.
That is why a man like Daniel Willard, the remarkably efficient president
of the Baltimore and Ohio Railroad--the man who has done so much toward
rehabilitating that one-time minstrel-show joke into one of the best
railroad properties in the United States--spent days and nights reading
every scrap about efficiency that could be brought to his attention, why
he brought Harrington Emerson, one of the best-known of the efficiency
experts into his own offices and staff, why, beginning with his great car
and engine repair and construction shops, he is gradually extending the
principles of modern scientific efficiency to every corner of the railroad
which he heads. Willard's example has been followed by other railroad
executives. And it is because of these and other efficiency principles
that the best of our railroads have been enabled to crawl through the hard
years of the past decade, without going into bankruptcy.
* * * * *
It is a gloomy record--these lean years in Egypt. They came succeeding a
decade of apparent prosperity for most of the railroads. I say "apparent"
advisedly. For, when you get well under the surface of things, you will
find that even the first six or seven years of the present century were
not genuinely prosperous for the overland carriers. Dip into statistics
for a moment. They are dry and generally uninteresting things but
nevertheless they are the straws which will show the way the wind is
blowing. Look at these:
In 1901 the net capitalization of our railroads was, in round figures,
$11,700,000,000. Six years later, or at the end of the greatest period of
material prosperity that the United States has ever known, this
capitalization had increased to $16,100,000,000--approximately
thirty-seven per cent.
A great deal has been written about railroad capitalization--a great deal
without knowledge of the real facts in the case, and a great deal more
with knowledge but also with malicious intent. These figures speak for
themselves. Translated, they represent the expenditures of the railroads
for permanent improvements and expansions during that busy seven-year
period. At first glance an expenditure of more than $4,000,000,000 is
staggering. Yet what are the facts? The facts are that hardly one of these
roads expended enough that memorable season to keep pace with the vast
demands of the freight and passenger traffic--particularly the
freight--upon them. We experienced great railroad congestions during the
winters of 1903, 1905, 1906, and 1907. And the loss to the large users of
railroad facilities because of these earlier congestions is no vague
thing; it can be figured high in the millions of dollars. And furthermore
it can be said that there is no period of expansion in recent American
commercial history that has not been both limited and hampered by the lack
of transportation facilities. What a commentary this, on our so-called
national efficiency!
* * * * *
Today we are just crossing the threshold of what seems to be an even
greater period in the industrial expansion of the nation.[1] Yet how are
our railroads prepared to meet their great problem? In 1901, as we have
already seen, they met it by an expansion of their physical facilities.
But in 1901 the railroads had credit. In 1916 the credit of many of them
had become a rather doubtful matter. And this, of course, has been a
serious detriment to their expansion--to put it mildly.
An analysis of the service, both freight and passenger, of the railroads
in the year 1907, the last of the "big years" in railroad traffic,
compared with that of 1914--the most recent year whose figures are
available--is illuminating in estimating railroad credit today, or the
lack of it. The passenger-mile--representing the progress of one train
over one mile of track--is the unit of that form of traffic. In 1914 the
total passenger-miles had increased to 35,100,000,000 from the total of
27,700,000,000 in 1907--or 25.7 per cent. Similarly the ton-mile is the
unit of freight transportation. As the name indicates, it represents the
carrying of one ton of goods of any description for a mile. In 1914 the
ton-miles had grown to 288,700,000,000 from 236,600,000,000--or twenty-two
per cent.
But, as the traffic grew, it was necessary that the railroad should grow.
Despite supreme difficulties in finding credit it did manage to invest
some $4,042,000,000 in property expansions and reconstructions during the
seven years from 1907 to 1914. Yet this very money must be paid for, and,
in view of the gradually impaired credit, paid for rather generously. At
five per cent, this expenditure represents an added annual interest charge
of $202,101,000 to the railroads of the United States, a figure whose
great size may be the better appreciated when one realizes that it is
considerably more than half a million dollars a day.
Against this increased outgo one must measure increased revenues for 1914
over 1907, of $452,188,000--one deals in large figures when one speaks of
the earnings and expenses of more than a quarter of a million miles of
railroad. Yet even increased earnings of more than $400,000,000 are not so
impressive when one finds that operating expenses and taxes in 1914 were
$506,888,000 higher than in 1907. And both operating expenses and taxes
are far higher in 1916 than they were in 1914.
Hold this picture up to the light. I have begun to develop the huge plate
for you. Now study its details for yourself. An investment of
$4,000,000,000--more than ten times the cost of the Panama
Canal--produced, at the end of a seven-year cycle, increased
transportation earnings of more than $450,000,000; yet it required
$500,000,000, or an excess in a single year of more than $50,000,000, to
meet the pay-roll, material tax, and other costs of operating the
railroads. And in this figure we have not taken account of that annual
interest charge of more than half a million dollars a day for the huge
$4,000,000,000 investment fund.
That interest charge cannot be ignored. Bankers demand their pay. Add the
deficit in a single year--a normal year, if you please. Here it
is--$54,698,000 plus $202,100,000--and you have a total deficit of
$256,798,000. And this is but a single year. The years that preceded it
were no better.
The money that went to meet these deficits was provided from some source.
Where did it come from? Most of the big railroaders know. They will tell
you, without much mincing of words, that it came from previous
accumulations of surplus, or else from money withheld from the upkeep of
the physical property of the railroads. Of this last, much more in due
course. For the present moment, consider that great $4,000,000,000
expenditure between 1908 and 1914 for additions and betterments. It was
none too much--not even enough when one comes to consider it beside the
great expansions in service as represented by the showings of
passenger-miles and ton-miles. And yet today, as we shall see in due
course, the railroads stand in need of far greater development and
expansion than ever before in their history. Five or six years ago that
supreme railroader, James J. Hill, estimated that the railroads of America
would need a further expenditure of $1,100,000,000 a year upon their
properties before they would be in shape even to decently handle the
traffic that would be coming to them before the end of the present decade.
Hill was a master railroader who stood not only close to his properties
but close to the great territory which they serve. He knew that the states
of the Union which are west of the Mississippi River had been developed to
only twenty-seven per cent of their ultimate possibilities. It would be
hard to state the lack of development of the railroads of that territory
in exact percentage. It certainly would be a figure far less than
twenty-seven.
If you are a traveler at all familiar with the Middle West and the South;
if you are traveling steadily and consistently these years over all of
their rail routes, you must have been convinced of their appalling
condition. Many of their main lines are deplorable; their branch lines are
unspeakable. Branch-line service in every part of the land has been a
neglected feature of railroad opportunity--as we shall see in due course.
But in the Middle West and in the South they are at their worst. If they
do not actually cry aloud from a physical standpoint for reconstruction,
their service, or the lack of it, certainly does. Yet the people, the
communities, and the industries which are situated upon them are entitled
to a railroad service which shall enable them to compete upon an even
basis with the communities and industries which are situated upon rich and
efficiently managed railroads. I feel that this is an economic principle
to which there can be no dissent. And I think also that there can be no
dissent to the wretched plight of many of the roads of the Middle West and
the South--more particularly the Southwest. In rough figures, the
prosperous railroads of the land, representing some forty per cent of its
mileage, are able to give service to their patrons; sixty per cent are
unable to render a proper service.
But even in the prosperous sections of the West--of the larger proportion
of the country--one who rides and sees and thinks cannot fail to be
impressed with another great cost, yet to come. I am speaking of the
removal of tens of thousands of highway grade crossings, in our towns and
cities and in the open country. Already a good beginning has been made;
but it is as nothing compared with the work which remains to be done. The
coming of the automobile has hastened the necessity of the completion of
this work. The railroads have contrived many ingenious and perfected
methods of safeguarding their highway grade crossings. The best of them
are most inadequate, however.
The fact remains--a fact that must be particularly patent to you when you
ride across Michigan, or Indiana, or Illinois, or Iowa, or any of their
sister states--that here is a great and vastly expensive work awaiting the
railroads of this country. In the larger cities--New York, Boston,
Buffalo, Chicago, St. Louis, Kansas City, to name a few striking
examples--many millions have been expended in this work within the past
few decades. While the several communities--in some instances the state
treasuries--have borne a portion of these expenditures, the burden has
fallen invariably upon the backs of the railroads. Fortunately the
railroads which have succeeded in absolutely eliminating many of their
highway crossings--and, in so doing, reducing a large part of their
accident claims--have been the wealthier roads. But that is little
satisfaction to a community unfortunate enough to be situated on the lines
of a bankrupt road. The chances are that its grade crossings, being more
poorly protected, are more dangerous.
One thing more, while we are upon this subject and are speaking
particularly of this lack of development of the railroads of the West and
of the Southwest. It is an interesting fact that there are but three
railroads--the Santa Fé, the Union Pacific, and the Southern
Pacific--which have done any considerable amount of double-tracking west
of the Missouri River. Yet, as we shall see when we come to the military
necessity of our railroads, it is only a double-track railroad which is
competent to handle any really considerable volume of traffic. And it is
equally true that it is more than foolish to attempt to build or to
develop any considerable mileage of branch lines until there are
double-track main stems to serve it adequately. James J. Hill had all
these things in mind when he made his definite statement as to the
financial needs of the railroads of the United States during the present
decade. And he did not need to give consideration to the abnormal traffic
which the great war has given to our railroads. The normal development of
the West, its gigantic possibilities, were sufficient to convince that man
of great vision, to set his ready pencil at statistics.
As a matter of fact and in view of the record of these past half-dozen
years, the average well-posted railroader of today will tell you that Hill
was only conservative in his estimate. But, being even more conservative
ourselves, let us allow that, if the railroads had been unhampered during
the past decade, they would have expended as high as $1,000,000,000 a year
in permanent improvements.[2] Ten billions instead of four! Ten billions
of dollars makes dramatic comparison even with our great trade balance
that has accumulated during the European war--the excess of exports over
imports already amounting to only a little over $3,000,000,000. And as to
what it would have meant to industrial America, poured out through many
channels, raw materials, manufactured goods, labor--it takes no stimulated
mind to imagine. The flush period into which the war has suddenly plunged
us can give a fair indication.
* * * * *
Now consider for a moment not the possible expansion that the railroad
might have made in the last decade and did not, and see how it has failed
in the ordinary upkeep of its property. This last phase of its plight
bears directly upon the great railroad financial problem as it exists in
this year of grace, 1916--the epochal year in which the roads need to
replenish their equipment; the year in which they find the doors of the
money markets, open to almost all other forms of industrial investment,
all but closed in their faces. By equipment, I now speak in the broad
sense of the word not merely of cars and locomotives but tracks and
bridges and terminals as well--the entire physical aspect of the
properties. Yet take, if you will, the word "equipment" in its narrow and
technical sense. The sense of railroad necessity is not lessened.
The other day the Massachusetts Public Service Commission complained that
the largest of the railroads operating out of Boston was using in its
suburban service some 700 wooden passenger coaches, varying in age from
twenty-five to forty years. The railroad did not deny that allegation. It
merely said that it had no money with which to buy modern coaches.
Its condition is typical. Week after week in the glorious autumn of the
year of grace 1916, the news columns of the commercial pages of our
morning newspapers were telling with unvarying monotony of the shortage of
freight cars as bulletined by the American Railway Association--100,000
this week, 75,000 last, 150,000 next--who knows? The merchant and the
manufacturer know. They know in shipments of every sort delayed; in the
delays running into sizable money losses week upon week and month upon
month.
It may not be able to convince them that at the close of the fiscal year
1914--the period upon which we are working--there were upon the roads of
the United States 2,325,647 freight cars, a number which, although greatly
added to since that date, has not yet been made adequate for the normal
traffic demands of the country.[3] And a large proportion of these cars
are both obsolete and inadequate. In 1914, out of the 2,325,647 freight
cars some 347,000 were of a capacity of but 60,000 pounds or under--a type
today considered obsolete by the most efficient operating man. A great
majority of this latter number of cars was of all-wood construction. If
the financial condition of the railroads had permitted, they doubtless
would have been replaced long since with all-steel cars of far greater
carrying capacity. This situation in the freight-car equipment is
reflected in larger measure in the passenger-car and locomotive situation.
There are railroads in the United States that today are compelled by the
exigencies of a really serious situation to operate locomotives whose very
condition is a menace not only to the men who must ride and operate them
but also to the passengers in the trains they haul. The annual number of
serious delays that may be charged to "engine failure" is appalling.[4]
Now consider "equipment" in its broader sense. Expert railroaders will
tell you that save in the case of the larger and more prosperous roads,
there has been, in the course of the past seven or eight years, a serious
depreciation in the maintenance of the way and structure of the railroad.
In the prosperous years from 1901 to 1907 a very great improvement was
made in this physical feature of the railroad. In the last of these years
the American railroad reached the highest standard of physical perfection
that it has ever known.
In 1907 came the great panic. It made drastic economies immediately
necessary. The railroads in their anxiety to meet, first, their dividends,
and second, their interest obligations, pinched maintenance to the extreme
limit. This was effective in two ways: In the first place the great
preponderance of roads did not have earnings to make ordinary
improvements, nor credit to provide the capital charge that would apply
for improved rights of way, bridges, stations, freight houses, shops, and
the like. Expert track engineers say that the loss in the maintenance of
line during these lean years in Egypt that have just passed will average
at least $2,000 a mile. Multiplied by a total of 245,000 miles of railroad
line in the United States this means that the railroads are "back" in the
upkeep of their lines alone some $491,788,000.[5]
An expert railroader of my acquaintance takes this great
figure--considerably exceeding the cost of the Panama Canal--adds to it as
representing a carefully ascertained deficiency in the replacement of
rolling stock an almost equal sum--$445,940,586. To these he further adds
the dividends paid by the solvent roads out of their surpluses during the
seven hard years--$784,563,406--and the depreciation of the value of the
securities of the roads in bankruptcy during the same period--$719,528,328.
The total of these four great items is $2,441,820,320--a sum instantly
comparable with that of the national debt.
There is, however, from a bookkeeping standpoint, at least, an offset
against these losses in the equipment account of $394,736,506 which has,
under a wise ruling of the Interstate Commerce Commission, been charged
to expenses during the seven years and set up as a reserve to meet the
accruing deficiency of equipment. However, there have been no restrictions
as to the maintenance of this fund, or how it should be handled. The very
prosperous lines--representing some 100,000 miles, or less than half the
total mileage of the country--probably have their contribution to this
depreciation fund as an asset. In the case of the poorer roads--speaking
financially--it doubtless has been applied to other purposes, in order to
help them maintain their bare existence. It has come home to these, and
with great force, that the governing conditions which make their income
fixed take little cognizance of the vast annual increases in material, in
tax, and in labor costs. In rough figures--decidedly rough, it seems to
me--it has been estimated that the losses of our railroads during the
past ten years alone have amounted to approximately one-half the entire
cost of the Civil War. That figure is impressive--it is little less than
appalling.
Even with the depreciation accounts of the American railroads deducted as
an asset, we still have this awe-inspiring total of $2,000,000,000
confronting us. Some of this--the unpaid dividends of more than seven
attenuated years--is water that will never come to the mill again. But the
neglected rights of way, the ancient buildings, and the bridges needing
rehabilitation on some of our railroads, the locomotives and the cars
travel-racked and fairly shrieking for repairs, are all of them physical
matters that must be set right before the sick man of American business
can stand firmly on his feet once again. And when these things are done,
the railroad will stand physically just where it stood from eight to nine
years ago. And who can deny that it should stand nine years ahead of 1917
instead of nine years behind it?