ELEVENTH ANNUAL YEAR BOOK — PART IV. 173 



during the past twenty years, and after subtracting all operating ex- 

 penses and all taxes, I find that for the year ending June 30, 1910, the 

 American railways had a net income amounting to over $70,000,000 greater 

 than ever before in their entire history. It is interesting and instructive 

 to learn new methods of economy in operation. Mr. Brandeis has per- 

 formed a great service to the American people in challenging attention 

 to modern scientific methods of management which have recently been 

 adopted by a few large industrial companies in the United States, but it 

 is not necessary to prove what Mr. Brandeis has undertaken to establish. 

 It is not necessary for the railways to revolutionize their methods of 

 operation. Even under present conditions, we find this remarkable in- 

 crease in net earnings which I have just stated. I find that the net earn- 

 ings of American railways have not only increased in gross, but they 

 have increased for every train hauled one mile, and for every mile of 

 railroad. The net revenue per train mile in 1909 was 25 per cent greater 

 than in 1900, and over 50 per cent greater than in 1890. The net revenue 

 per mile of line in 1910 was 45 per cent greater than in 1900, and over 

 73 per cent greater than in 1890. Notwithstanding large issues of capital 

 stock during the past decade, we find that the dividends of American rail- 

 ways have increased much more rapidly than has their capital stock. In 

 1909 the total stock in the country was 31 per cent greater than in 1900, 

 while in 1909 the dividends paid were 129 per cent greater than in 1900, 

 and the balance in the profit and loss account was 195 per cent greater 

 than in 1900. These figures tell in more tangible, concrete, and conclusive 

 form than any broad generalizations or expressions of opinion can pos- 

 sibly do, that railroading in the United States has been growing more pro- 

 fitable during recent years than ever before in the history of our country. 



I will state briefly the circumstances that gave rise to my in- 

 quiry upon this case. Mr. Wallace was up at the state convention 

 and tried to find me to talk for a few minutes about a matter 

 which he said was of some importance; but that day so many of 

 you Corn Belt fellows and graindealers over the state crowded in 

 on me that he couldn't talk about business at all. Later I got a 

 letter from him referring to the rate cases that were coming on at 

 Washington, that the state was doing nothing, and that he thought 

 the shippers of commodities from this section of the country ought 

 to be represented. I had a brief conference with him. The upshot 

 of the whole matter was that, due to the activity of that ceaseless 

 worker and brainy man who is one of the most vital forces in all 

 this western country, backed up by you fellows all over this Hawk- 

 eye state, I took up this task. I jumped into it hard. I dropped 

 everything in my office, gave my law cases out to other fellows (I 

 don't have so very many), and from the middle of August up to 

 the present time I have been devoting my entire attention to this 

 matter, with the exception of a very few days. I have spent seven 



