MICHIGAN ROADS AND FORESTS. 



Often! Ogn of The Mich.g.n Road Mkrr Au 

 SUITE 1406 MAJESTIC BUILDING 



jaDon *.id Michigan Fotwtry Association 

 DETROIT. MICHIGAN 



PUBLISHED EVERY MONTH 



THE STATE REVIEW PUBLISHING CO., 



SUBSCRIPTION: ONE DOLLAR A YEAR, 

 PAYABLE IN ADVANCE. 



THE RAILROADS AND THEIR EARN- 

 INGS. 



(From the Michigan Investor.) 



The present wave of railroad-baiting which 

 is sweeping over the country as an accompani- 

 ment of the attack upon the corporations, as a 

 whole has already been productive of its re- 

 sults. They are to be found in the annual 

 statements made by the officials of leading 

 railroads to their stockholders in explaining 

 the financial results of the operations of the 

 companies. In the annual report to the stock- 

 holders of the Atchison railroad the Santa Fe 

 System President Ripley was obliged to dwell 

 upon the large amount of additional capital 

 which will be required to provide for the fur- 

 ther development of the system. That this 

 capital will be difficult to obtain he was also 

 obliged to admit, his theory of the reasons 

 therefor being that "the loss of confidence of 

 investors in the security and stability of rail- 

 road investments, and this loss of confidence 

 has been caused in great measure by the un- 

 friendly attitude of a large part of the public 

 toward the railway companies and by the arbi- 

 trary action of legislatures and railway com- 

 missions in reducing rates and imposing bur- 

 densome restrictions, often without investiga- 

 tion or consideration of the consequences." 



President Stevens, of the Chesapeake & 

 Ohio railroad, a great railway system upon 

 which a large -portion of the country is depend- 

 ent for its supply of bituminous coal, was 

 obliged to call attention to similar popular un- 

 friendliness and legislative action unfavorable 

 to the continuance of satisfactory earning pow- 

 er, while President Delano, of the Wabash, 

 made a similar explanation to his stockholders 

 of the results of recent legislation in Iowa. 

 Indiana, Illinois and Missouri, and he might 

 have added Michigan but for the fact that only 

 an inconsiderable portion of the main line of 

 the Wal>ash lies within the limits of this state. 



These complaints, are of a piece with those 

 of practically every railroad manager who has 

 i forced to operate under oppressive condi- 

 111 ins. It is true that in some states in which 

 oppressive regulation has been applied, as in 

 Ohio, there has been a notable increase in the 

 s earnings of the railroads, and this fact 

 i- already being cited in confirmation of the 

 theory that the local rates will induce so much 

 additional traffic as to make up for the reduc- 

 tions. I'.ut the added traffic costs so much 

 more to handle, under the coincident condi- 

 tions of higher operating costs that the in- 

 crease of business is really handled at a loss. 



The outcry against railroads is based upon 

 over-capitalization and the presence of "wa- 

 ter" in the stock account. We leave it to any 

 unprejudiced person familiar with the exper- 

 iences of railroad eapital in this country wheth- 

 ir'HOt any "water" that was ever injected 

 into the eapital accounts of the Santa Fe ami 

 \Yal:: has not been wrung out Jinost 



ically in the various receiverships through 

 ;>i" . ( >'.' has but 



to recall the immense amount of Wabash share 

 I capital that was rendered valueless by the 

 j prurfing operations carried on during the re- 

 j ceiverships of Solon Humphreys and Thomas 

 | Tutt; and one does not have to go farther than 

 j Boston to find out how many investors were 

 ruined by the process of wringing the water 

 out of the Santa Fe System. As a matter of 

 fact, we believe that every dollar actually in- 

 vested in the business of railroad construction 

 and operation in this country should earn from 

 8 to 10 per cent upon itself without being made 

 the subject of reproach by the public. Six per 

 cent can be earned upon mortgages in Michi- 

 gan and upon investments in municipal bonds 

 in the west without the owners of the capital 

 worrying themselves about the fluctuations in 

 or the risks of transportation. A higher rate 

 of return should exist as an incentive to invest- 

 ment. If the owners of the capital invested in 

 railroads choose to divide their 8 or 10 per cent 

 return upon actual investment into one 4 per 

 cent payment upon a dollar in the form of a 

 bond, and into another 4 per cent payment into 

 another dollar in the form of a share of stock, 

 we do not see how the public is harmed. At 

 any rate very little "water" has gone into 

 steam railroads of late years. The panics of 

 1873, 1884 and 1893 operated to get rid of prac- 

 tical!}' all the early "water" which went into 

 stock issues. 



As a matter of fact our railroads are not. a<= 

 a system, earning exorbitant rates upon their 

 capital. Recent statistics covering 1906 shows 

 that the par value of all the railroad capital in 

 the country is $14,570,421,478, or at the rate of 

 $67,936 per mile. This includes all terminals 

 and other properties of greater than average 

 cost. Now of this capital $2,270,801,333, or 

 3.46 per cent of the whole, paid no return at 

 all, and the returns upon the balance were at 

 an average rate of 6.03 per cent. There were 

 many contributors to this average who did not 

 realize anything like 6 per cent. For instance, 

 upon over six billions and eight hundred mil- 

 lions of this 1 capital the return was from 1 to 4 

 per cent. Upon 11.34 per cent of the whole 

 capital, 5 per cent was earned. Upon 7.60 per 

 cent from 5 to 6 per cent was earned. Upon 

 9.54 per cent from 6 to 7 per cent was earned, 

 and upon 14.94 per cent of the total capital 

 from 7 to 8 per cent was earned. 



These are not unreasonable figures of return 

 upon the capital invested in railroads, and until 

 they are exceeded the public has little reason 

 to complain. The interesting thing about mos; 

 of the complaints is that they proceed from 

 persons who would not be satisfied with the 

 maximum returns just cited from the opera- 

 tions of their own business. But that is human 

 nature, after all, which makes one law for itself 

 and one for that which is outside itself. 



A MODEL TOWN. 



The new town of Gwinn, which is under con- 

 struction for the Cleveland Cliffs Iron Com- 

 pany, in Marquettc county, was formally 

 launched recently, when the company's ;\~> 

 signed the plat of record. Gwinn was named 

 after the company's president, William Gwinn 

 Mather. It is located near the iron ore mines 

 of the Swanzy range. 



It is an ideal site for a town. There is a 

 never failing supply of pure water from the 

 Kscanaba river, and the surface, gradually 

 sloping toward the river, assures good drain- 

 age. There are about 400 acres to the town- 

 site proper, which area may be enlarged as 

 needed. 



The streets running in one direction will be 

 named after different kinds of rocks, while 

 traveling the opposite direction will be 

 named after different kinds of wood. 



The company will insist on certain restric- 

 tions, it being its aim to avoid the stereotyped 

 sameness of most mining towns. There ha\e 

 been about ID residences contracted for, a num- 

 ber of \\hich are up and occupied. 



A channel I .HOD feet long, .'ill feel wide anil 



10 Feel dee]i is being cut to divert the cast 



!i of the F.scanaba river so as to take the 



water from the mines where damage might re- 

 sult. About five years ago the Cleveland Cliffs 

 Company secured options on a large tract of 

 land in this field, and made a quiet search for 

 minerals. Lands were accepted or rejected ac- 

 cording to the judgment of the company's offi- 

 cials. That iron ore in quantity was found is 

 certain by the preparations being made for its 

 extraction. 



The company will have fifty or more of its 

 own dwellings completed and occupied before 

 building operations by outside parties will be 

 coi.imcnced either in the business or residence 

 districts of Gwinn. From present indications 

 all will be ready for occupancy by the first of 

 the year. All of these houses will be provided 

 with water and sewerage connections. 



The town will have many attractive features. 

 T'u- streets are wide. The principal streets 

 will have a sixteen-foot drive way on either 

 side of a center grass plot, which, if the time 

 ever conies when a street car line is extended 

 f) the range, will probably be used for the 

 street railway. The trees will be left standing 

 wherever possible, so that there will be sev- 

 eral natural parks in and near the town. The 

 underbrush has been cut away from the streets 

 and building lots, but most of the better trees 

 are left standing. Along the river front there 

 are many line elms, and in other parts of the 

 town site there are birch, norway and jack 

 pines, cedars and other varieties of timber. 



The plans for the town site were carefully 

 considered by the officials and engineers, and 

 the two most attractive and convenient areas 

 have been designated for the principal resi- 

 dence district and the main business blocks 

 and public buildings. The residences will face 

 the east branch of the Kscanaba river. There 

 are many natural parks in the town site but 

 none will perhaps be more attractive than one 

 near where the Marquette & Southeastern 

 Railway Company is to erect its new passen- 

 ger station. 



GARDEN SPOT OF MICHIGAN. 



The upper peninsula is the garden spot of 

 Michigan. 



But the harvest is plenteous, and the la- 

 borers are few: 



The editor of an aggressive agricultural pa- 

 per has been making a trip through northern 

 Michigan. He has seen the riches with which 

 nature has so liberally endowed the soil, and 

 he has also seen the vast acreage as yet un- 

 touched by the plowman. 



His observations call for serious thought 

 on the part of every loyal citizen of the penin- 

 sula. He says our greatest need is progressive 

 settlers.' Very well; how shall we get them? 



It is known that thousands of settlers, men 

 of the right stuff, pass by annually, giving to 

 northern Michigan little if any thought. 



West and north they go, eyes lifted too 

 high to see the agricultural wealth at their 

 very feet. 



Surely this condition should appeal to those 

 of us who sat. idly by last spring and allowed 

 the proposed immigration bill to come to an 

 early legislative death. 



Why, we ask, do not more high grade set- 

 r>me to northern Michigan. 



Simply because no effort is made to get 



them. 



Michigan, amid its surrounding states, sits 

 like the store-keeper who does not believe in 

 advertising, and who is convinced that electric 

 in his store window are a useless ex- 

 travagance. 



So Michigan sits idly by watching with com- 

 plaining air the procession of desirable new- 

 comers into the states which bid them wel- 

 come. 



Minnesota spent five thousand dollars in the 

 first year of its successful campaign for set- 

 tlers, and the auditor of the state says that 

 the sale of state lands was increased during 

 those first twelve months to the enormous 

 amount of a half million dollars. 



Here is material for deep thought on the 

 part of every Michigan legislator, for herein 

 iics the opportunity to turn into profitabli 



