Chairman of the Trunk Line Association, New York, 1909; Formerly Auditor Interstate Commerce Commission.
INTRODUCTION.
The ten years or more which have elapsed since the resumption of industrial activity that began some time in 1897 have been characterized by changes in rates of wages for substantially all kinds of labor, and in the prices of most commodities which amount to a profound and material alteration in the value of money. Wages of railway labor, prices of railway materials and supplies and prices of commodities carried by railways and of those produced by the purchasers of railway transportation have rapidly increased. This is equivalent to a decrease in the value of the money in which railway charges are paid for the appreciation of commodities is the depreciation of money. Commodities cannot have generally augmented value without money having diminished value. Railway rates have not been adjusted to this diminished value of money. The involuntary and unsolicited reduction in railway rates has gone so far as seriously to threaten the stability of railway wages and that of the whole railway industry. Some adjustment through compensatory advances in money rates (i. e., nominal rates) is, therefore, absolutely necessary. The extent of the changes which have taken place, their relation to the problem of railway rates and the adjustments which they have made necessary are set forth in the following pages.
TYPICAL UNCHANGED RATES.
A fifteen-ton car-load of fourth class freight carried all-rail between Chicago and New York at any time during the year 1897 would have brought the railways transporting it $105.00 in gross receipts.
There has been no change in the class-rates between Chicago and New York since 1897 and the same quantity of freight, classified in the same way, produces the same gross receipts now that it did in 1897.[E]
The rates between Chicago and New York, as is very well known, are the basis of all rates in the region north of the James, Potomac and Ohio Rivers, and east of the Mississippi River and of a large proportion of the rates applicable to traffic originating or destined to any point in that region. Without a change in rates between Chicago and New York there could have been, during the continuance of the system of rate adjustment that has been in force since long prior to the year 1897, no general change in the rates based upon those in force between those cities.
WAGES OF RAILWAY EMPLOYEES.
More than forty per cent. of the gross receipts of the railways of the United States are expended in the payment of employees, the sums annually paid out for that purpose since 1897 being as follows:
| Amount paid to | |
| Year. | employees. |
| 1897 | $465,601,581 |
| 1898 | 495,055,618 |
| 1899 | 522,967,896 |
| 1900 | 577,264,841 |
| 1901 | 610,713,701 |
| 1902 | 676,028,592 |
| 1903 | (a)776,321,415 |
| 1904 | 817,598,810 |
| 1905 | 839,944,680 |
| 1906 | (a)927,801,653 |
| 1907 | 1,072,386,427 |
| ——————— | |
| Total | $7,781,685,214 |
| (a) Includes $19,000,000 estimated for Chicago, Milwaukee & St. Paul in 1903 and $27,000,000 for the Southern Pacific in 1906. | |