LINCOLN, NEB., FEBRUARY 16,1905.
No. 39
Vol. XVI.
" in i " " "" ' '
1
POSTAL RAILROAD RATES
The Average' Amount for Which
Each Passenger is tarried
Is Sixty Cents. ;
SAME SYSTEM OH STREET CARS.
it Would Vastly Increase the Net
; Earnings of the Koads ana
Build Up the West.
The street car service of the city is
the same in its nature as is the ran
u-av nassp.Tieer service of the nation.
Had the railways of the United
stntos hfien onerated as one road (1902)
as is the street car service of a city,
ar.fi had the rate been CO qent3 for each
passenger, as is five cents for a street
car regardless of distance, the roads
would have received the same gross
thev did get. This is pro-
: -.Tirio thw carried no more nor less
passengers 'than they did. But, thg.
tacts are that tne pasu&ei B v
Ttmuifi under the postal theory, in
crease ten-fold or more, over the in
dividualized mileage theory. The ave
roa train carries but forty-five pas-
eengers (see page 67 interstate com
statistical report 1902). The ca
pacity of each coach is from fifty to
sixty passengers, Tne writer nas uiLe"
HHoTi nnnn trains where the passenger
traffic could easily iiave been carried
in nnft cnach. Why is that so? Be-
n-ao th ft ner mile rate system re
strains- travel and is in restraint of
business. Think for a moment wnat a
Mnrir Rvstem of street car charge
. would result" in, with a rate of half cent
per block (which rate would pe no
' no-hor fnr strp-et car service than is
three cents per mile for passenger
service). It would shrink the value of
-h nnt-iavifier blocks, beyond, say ten
blocks from the center of business, ex
actly a3 tori per mile rates of freight
,v r,-t tniifiasrft rates for Dassenger service
does land values on railways. And it
would also shrink the earning value
of street car property to the point of
confiscation. Such system or rate mah
fnr street cars would make it plain
how ureent it is that a law
ho onnptPd that all roads should make
enforcable contracts for division or
traffic making transportation na
tional, and the rate a fixed one, abso
lute and based on the average rate
shown during the life of the interstate
commerce commission to have been re
ceived by the railways.
; Put in the average passenger rate
and the average number -of passengers
on a train, would be, raised from 45
to 500; this, without materially in
creasing expense of conducting pas
senger traffic. The average gross in
come per train for its average distance
of travel, from passenger service, would
be raised from $27 to $300. " ;
The railways take spurts giving ex
cursion rates. The writer remembers
a round trip rate of $3 made between
Chicago, 111., and St. Paul, Minn. The
regular one way fare was $9.70 or
$19 40 for the trio to St. Paul and back
on the mileage basis. The rush of
travel called for three or four sections
w each train. They were loaded to
their capacity and suppose the average
to havA he.en five coaches they got $900
npr round triD train, which they count
aa costing -for service about $1 per
mile or $820 for that trip. They were
on iv about $80 Der train to the good
on their passenger service or a little
under 10 per cent profit. .
it was claimed that this $3 excursion
round trip service to St. Paul from
Chicago was not profitable. JNO tiouot.
t Pt us examine the ca3e from a postal
basis which we claim is the true rate
basis. The average distance per haul
fnr pach passenger on the business of
the United States va3 30 1-3 miles, the
average rate of fare (the true rate)
r.n cents. Prom Chicago to S't. Paul is
410 miles, back to Chicago makes 820
miles. This is just twenty-four times
thA nvpraxre haul. The S3 rate they
made was just five times the average
rate. Had they received for that indi
vidual rate the true rate based upon
- the average they would have charged
24 times GO cents or $13.40 for each
passenger. When you select someone
haul out of the whole traffic of the
country, vou individualize that haul
and destroy the relation and in the case
above cited the rate was but five times
the average received for each passen
srer while the distance of the haul wa3
24 times the average, and yet they lost
no money on that business, wmcn
shows the- wonderful margin of re
ductions that are possible to be made
in nasseneer service under an enngnt-
ened management or that pusiness.
fiet this fact fixed in your mma, ai
e-pst. it as vou would a meal and make
" . ... .
it a nart of vourself and you win oe-
gin to understand this question. An
average embraces the longest haul ana
the shortest haul and every interme
diate haul. It is the true basis from
which to fieure service to the public,
hv ouasi-nublic corporations. The ave
rage rate embraces the largest amount
paid for any ticket and the smallest
amount, and every intermediate rate is
contained in that average rate. Thi3
is true of passenger service, this is
true of freight service. You are en
titled to a 60 cent passenger rate any
distance, long or short. You should
nprmit. roads to pool and make en-
forcible contracts among tnemsei ves
for divisions of revenue. 1 Ana n mey
get into a fight 'on that division, let
the. courts settle at the expense or the
roads proper adjustment of those divi
sions. You are entitled to a nve cent
freieht rate, for that is the average
rate on the postal basis for ireight
service. If you do-hot know enough to
demand what is due you, you ought not
to have it. If you have the capacity to
think for yourself and the determina
tion to force your public servants, tne
law makers, to nut the result or your
thinking into statute law, you will have
the relations between all citizens made
right." If we know no more than the
horse, we should be hitched up to pull
the load, as most of us are. you ana
I are treated as well as we deserve; be
cause vfe deserve no more than as units
of a community, we know how to
administer for the community.
The man who is bribed by a pass
epta sixty cents of value for his per
fMo ha tal'ps on the railroad.
UUJ, VWVi "V
To the railways the pass holders ride
looks like 60 cents, but he looks to the
writer like thirty cents. Study the
passenger service table under the
group map of the united states tpuo
lished on page 2 of the Feb.9 issue) you
sists of Nebraska, Colorado, north of
an east and west-line through Denver,
Wyoming, Montana and the Dakotas
west of the Missouri river. That is a
big country, with no large cities com
manding interurban traffic to lower the
average rate. For that reason our
group stands at the head of the ave
rage in long haul and large outlay per
individual. The iron hand of railway
discrimination has been laid on every
milft to an extent, which would have
depopulated it as a Sahara, had it not
been for a natural fertility, boundless
mineral resources and work of the
hardv Dioneers who make ud the pop
ulation. We often hear the question
asked, what would we do witnout tne
railroads? It could as well be asked
what could the reads do without the
people to prove that railways can not
be mismanaged. .
m. 1 I . 1 11. . 1 1 ! .1 i ,1
lne iact mai uie puuni; uuuaieu
money and lands sufficient to build all
the roads in Group VII, might be an
argument for more reasonable rates.
But we discuss this subject only on
its merits, without prejudice to legiti
mate railroading or to the public.
A. J. GUSTlN. Kearney, weo.
FUNDS FOR PROMOTING TRUSTS
How They Are Accumulated In New
York.
No Rich Popl In New York
In sDite of Thomas E. Watson, the
rich are certainly , growing poorer, and
the poor are growing richer, l nere are
row only 20 thrifty souls in all New
York who have managed to accumulate
$500,000 or more in personal property.
. Of these, only eight have $1,000,000
or upward. One of them is Mr. Carne
gie, who has managed to save $5,000,
000 out of the $200,000,000 for which he
sold his steel properties, and who also
owns a modest cottage on Fifth avenue,
p.o;he is not obliged to pay rent. Mr
Rockefeller is only half as rich as
Mr. Carnegie, anl is more frugal, too.
It is an inspiring showing of middle
class comfort that is revealed by the
personal property li3t made public by
the tax board. All the tinsel is stripped
fiom New York's pretentions to plu
tocracy. The real money is some
where else. New York World.
The editor of The Independent got a
personal letter from a banker last week
in which he said f "You take jt for
granted that the people kpow more or
political economy and thg details of
banking than they reany ao. in con
sequence of that, your many allusions
to reserves, reserve cities, ana a great
many other thing3 are totally lost when
presented to the ordinary man. xou
have many times alluded to the accu
mulation of vast amounts ' of money
in Wall street banks and their use m
floating immense promotion schemes.
You have denounced in a general way,
the law concerning thetransrerence or
rpservea from one bank to another to
the reserve cities, and have said that
the banks really have no reserves, put
von have never explained to .your
readers ,ust how that thing was done.
I suggest that you write sucn an aruae
a it would be or permanent vame.
The work of preparing such an article
as that would be very great, ana as
tha pmnr. since De France went to
New York, had no assistant, he dreaded
the undertaking. However ne wem w
thp lihraries. eot the comptroller s re
ports and the facts necessary for its
nrpnaration.. when he strucit a run un
innk ouch as seldom happens. He
found in Pearson's Magazine of No
vember, an article of that very Kina,
his attention having been called to it by
tho nhmrian: a ladv who knew her dus-
iUV mm- " J V
iness and what she was drawing ner
salary for. ,
This article was written by Mr. O. H
S'chreiner, a banker of many years'- ex
npripnep. He was president of the New
York Seventh National bank in the
days of its prosperity. -Some or tne
flfwrps he srives were verified, and with-
out doubt they are all absolutely ac
curate. It is a kind or reading uwi
can-not be run oyer as one reads a
novel. 1 It will require some thlnklpg.
There was never a more aamnaDie con
aniracv nrnontr hankers, and there have
been many of them than that by which
they secured the amendments to tn
vio-fnnl hanking: act. That act did
provide for reservesand it prevented
thp conerestion or money in fNew ium,
wh i i p. the west and the south were
skinned clean of all currency. The edi
tor of The Independent fully agrees
with Mr. S'chreiner when he says that
our financial laws are "the nourishing
mother of trusts." . '
A national election is approaching,
and one of the principal bones of con
tpntion is aeain - to be the tariff, which
ripmnirats denounce as father of the
trusts. If the tariff law is father of
the trusts, national law v.hich effects
unnatural, and lopsided distribution of
money is their nourisning moiuer.
Mnnpv in circulation was below $11
per head of 35,000,000 population at th
close of the civil war in isoa, dui is
now over $30 per head of 80,000,000
population. . The natural flow of so
great an increase snouia, nave tm
nished the only source or surplus sup
nlv to the money market.
In whatever form, money can be
created only by or under national law.
Monev is the only life blood of all
undertakings, and the measure of all
vainps. Labor, industry, and property
arc all eaueed thereby. It should
therefore circulate without favor or
impediment of law, guided only oy
natural demand and supply.
A proposal to favor by law a -few
hanks in large cities with use of money
denied to thousands ; of other bank
throughout the country would quickly
mppt with public ridicule and condem
nation. Yet by deposits from bank re-
KPrvps. such legal favoritism is actu-
oiiv accomnlished. continues, and
grows with the growth ot the national
hanking system.
ThP law fixing, and regulating re
serves by national banks is found in
section 5191 U. S. Revised Statutes,
modified by portions of sections 5192
and-5195; and since modified by act
of June 20, 1874; March 3, 1887, and
March 3, 1903.
'Section 5191 provides as follows
"Every national banking association in
cither of the following cities: Albany,
Baltimore, Boston, Cincinnati, Chicago,
Cleveland, Detroit, Louisville Milwau
kee, New Orleans, New York, Phila
delphia, Pittsburg, St. Louis, San Fran
cisco and Washington, shall at an
times have on hand, in lawful money
of the United States, an amount equal
to at least twenty-five per centum or
the aggregate amount of its notes in
circulation and its deposits; and every
other association shall at all times
have on hand,-in lawful money of the
United States, an amount equal to at
least fifteen per centum of the aggre
gate amount of It3 notes in circulation,
and of its deposits." And it forbids
banks to make loans or -discounts
whenever their "lawful money", falls
fcelow such required reserves. .t
This is mandatory, requiring 26 per
cent in lawful money to be - kept on
hand by bank3 in designated largo
cities, and 15 per cent in lawful money
by all others.
Had reserves "been regulated solely
thereby, the existing monetary dis
crimination could never have "grown.
Section 5192 provides that "Three
fifths of the reserve of fifteen per
centum reauired by the preceding sec
tion to be kept, may consist of bal
ances due to an association, avanaoie
for the redemption of its circulating
notes, from 'associations approved by
the comptroller of the currency or
ganized under the act of June 3 1864,
or under this' title, and doing business
In the cities of Albany, Baltimore, Bos
ton, Charleston, . Chicago, Cincinnati,
Cleveland, Detroit, Louisville Milwau
kee, New Orleans, New York, Phila
delphia, Pittsburg, Kicnjnona, ou
Louis, San Francisco, and Washing
ton."
This nprmits three-fifths of ' all" 15
per cent reserves to be kepi as deposits
or "balances in nauonai oansB, iu
designated or approved reserve cities,
which now number thirty-eight, a
follows: New York. Chicago, St. Louis;
Rnaton Alhanv. Brooklyn. 'Philadel
phia, Pittsburg, Baltimore, Washing-
ton, D. C, savannan, xsew uraauu,
Louisville, "Houston, Cincinnati,
Cleveland, Columbus, Indianapolls, ,
Detroit, Milwaukee, ues Mpmes, ou
ii . MnTiPQ noils v,- Kansas City.
Kan. Kansas City, Mo., St. Joseph,
Lincoln, Omaha "Denver, an ru
cisco, Los Angeles, "Portland, Ore.,
Dallas, Ft. Worth, "Cedar Rapids,
Dubuque, "Wichita, and -salt Law
City;
Thnoo mnrkPd with an asterisk were
designated under act of March 3, 1887,
or March 3, 1903. - - "
fe'ectfon 5195 provides a3 rouows:
Pnoh association organized in any of
tha rtip named in section fifty-one
hundred and ninety-one may keep one- ,
half of its lawful money reserve in
cash deposits in the city of New York."
This now permits one-nan oi tm
per cent reserves of banks in the last
thirty-five mentioned cities to be kept
as deposits in national I anks in the
first three mentioned, nameiy;
York. Chicago or St. Louis, insteacroi
New York only. ' '
By act of June 20, 1874, oanns are
t rtr ronnirpd to keen 15 per cent
and 25 per cent reserves against their
respective circulations, put, v niveau,
must at all times keep 5 per cent of
amount of same on deposit in the
United States treasury, as a reaemp
Hnn fund, "which sum shall be counted
as part of their lawful reserves'
against deposits.
The total of such redemption funds
was on March 28, 1904, $19,073,100. "
riv act. March 3. 1887, amenaea oy
0t March s. 1903 whenever three-
fourths of the DanKs .iocaiu uicm
shall make application, any city ol
25,000 population may be designated a
reserve city; and any city of 200,000
population may be designated a cemii
reserve , city, "liKe tne cuy -ui
iOrk;" and thereafter oanKs in an
such cities must "have on hand in
lawful money" 25 per cent or tneir oe
posits. Only1 Chicago and St. Louis
banks have availed to Decume wuu
reserve cities. .'
From the above summary tne ronow- y
ing, considerations are apparent:
First: The mandatory requirement
of section 5191, renewed n acts, March
3, 1887, and, March 3, 1903, that re
serves of 25 percent and 15 percent
shall consist of lawful money on hand,
Is in practice nullified by the permis
sions of sections 5192 and 5195, re
ducing the required amount of lawful
money ou iianwuy vuna iu ..,
designated cities from" 25 per cent to
12 V2 per cent, and by d(her banks from
15 per cent to C per cent; and permit- v
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