The Work of the Farmer 
 and of the Railroad 
 in Minnesota 
 
 HOWARD ELLIOTT 
 PRESIDENT, NORTHERN PACIFIC RAILWAY 
 
 ADDRESS 
 
 BEFORE THE 
 
 MINNESOTA AGRICULTURAL SOCIETY 
 AT THE STATE CAPITOL 
 ST. PAUL, MINN. 
 
 January 9, 1912 
 

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 The Work of the Farmer 
 
 and of the Railroad 
 in Minnesota 
 
 BY 
 
 HOWARD ELLIOTT 
 PRESIDENT, NORTHERN PACIFIC RAILWAY 
 
 ADDRESS 
 
 BEFORE THE 
 
 MINNESOTA AGRICULTURAL SOCIETY 
 
 AT THE STATE CAPITOL 
 ST. PAUL, MINN. 
 January 9, 1912 
 
Digitized by the Internet Archive 
 in 2015 
 
 https://archive.org/details/workoffarmerofraOOelli 
 
The Work of the Farmer and 
 of the Railroad in 
 Minnesota 
 
 Farming is the greatest business in the United States! In 
 this great North Star State, rich in natural wealth and resources, 
 other forms of business have grown, but agriculture has always 
 been the most important occupation and will continue to be if 
 the State is to reach its destiny as a place where the highest 
 type of man and woman and the best type of citizen will be 
 developed. 
 
 Importance of The meetings of this Society, formed to improve 
 Agricultural the methods of farming and to carry on the 
 
 Society great annual State Fair, have a marked influ- 
 
 ence upon the business of farming, upon which 
 the prosperity of Minnesota so largely depends. These meetings 
 should be most helpful in pointing the way toward better 
 methods of agriculture, toward increasing and making more 
 profitable the production from the soil, and toward making life 
 on the farm more attractive to young men and young women. 
 
 Any man who is not himself a farmer, or 
 an expert on agriculture, must necessarily feel 
 great hesitation in addressing this Society, 
 and my justification for accepting your invi- 
 tation is that I represent a business which is very closely asso- 
 ciated with the best development of agriculture and is much in- 
 
 Interdependence 
 of Farming 
 and Railroads 
 
 3 
 
terested in doing all that it can in reason to promote that great 
 business, as well as all others in this State. 
 
 Farming is an older business than transportation, but the 
 business I represent is also old and began as soon as the tiller 
 of the soil produced more than he could use himself and there- 
 fore sought to improve his condition by exchanging some of the 
 things of which he had too much for other things that he needed. 
 
 Agriculture, however, has not always preceded the railroad in 
 the western states ; on many occasions the railroad struck out be- 
 fore there was much farming and opened up the country. Since 
 the early ’60s agriculture and transportation, both of equal impor- 
 tance to the country and state, have worked side by side in bring- 
 ing about the development and use of the land, of which much 
 that should yield today a comfortable income and afford a health- 
 ful life to settlers is still unused, and much of which, sad to say, 
 is unwisely and ineffectively used. 
 
 Railroad The first railroad locomotive was brought to Minne- 
 Growth in sota, by way of the Mississippi river, early in 1862, 
 Minnesota landed on the levee at Saint Paul and moved 
 over 1,400 feet of track to a storage shed. At 
 that time the state had about 200,000 people. A period of 
 hard times was slowly drawing to a close, so pronounced 
 that two years before the then Governor, Alexander Ramsey, 
 one of the strong men of Minnesota, had set an example for 
 economy not often remembered now, and more rarely prac- 
 ticed, by cutting his own yearly salary from $2,500 to $1,500 
 and recommending a like reduction to other state officers. 
 
 The demand of the people for railroads to develop the State 
 was strong. Late in 1862 the Saint Paul & Pacific built from 
 Saint Paul to Saint Anthony, and on October 14th was ready 
 for business. In 1863 two companies built 46^ miles, and in 
 1864 three companies built 43R2 miles. In 1870 the State had 
 1,092 miles of railroad and 439,706 people. 
 
 In those years the hopes of the people of Minnesota centered 
 about the construction of railroads that would bring the country 
 closer to the small towns along the Mississippi River and its 
 
 4 
 
larger tributaries; and also open up a route to the Pacific Coast. 
 In a long forgotten report made by the Ronorable Joseph A. 
 Wheelock as Commissioner of Statistics, to Governor Ramsey, in 
 i860, is found the following: 
 
 Destroying “ Assuming the development of the im- 
 
 Minnesota’s mense extent of fertile country tributary 
 Isolation Minnesota in British America, with its 
 
 commercial radius extended by steam nav- 
 igation through the rivers which flow over her borders, 
 to the Rocky Mountains, we have seen this young state 
 advancing by the resistless pressure of physical and 
 social laws, to the first position among the inland states 
 of the continent, commanding without a rival a com- 
 merce equal to all the commerce of the present states 
 of the Northwest. Given one step more in this 
 development — a railroad to the Pacific, 
 Necessity of based on the termini of inland naviga- 
 
 Transportation tion on Lake Superior and the Missis- 
 
 sippi, an event close at hand among 
 the reasonable probabilities of the future — and Minne- 
 sota, the entrepot of all the transmundane commerce 
 which will flow through that narrow channel to 
 break bulk upon her water lines, must occupy a 
 position without a parallel in any State in the World. 
 
 * * * To make Minnesota the toll-gate of this vast 
 
 trade, the focus of distribution through all her radiat- 
 ing lines of railroad and navigation, to the east and 
 west and south and north , for the incalculable com- 
 merce which a Pacific Railway would pour into her 
 lap ; to enthrone her at the great ‘ parting of the waters’ 
 as the central market of exchange for the confluent 
 treasures of Europe and Asia and America — such is 
 the sublime destiny which develops itself for the future 
 of this young state, as the crowning consequence and 
 logical consummation of existing facts and tendencies 
 in the physical and commercial world.” 
 
This enthusiastic language of one who lived to see much 
 that he prophesied come to pass, indicates that the early pioneers 
 realized full well the necessity of adequate transportation. Mr. 
 Wheelock pointed out in his report that the estimated imports 
 of England and America from countries bordering on the Pacific 
 was then $200,000,000 a year. This seemed a gigantic figure, 
 indicating the great commerce that he thought would pour into 
 and through Minnesota when a Pacific railroad enabled it to 
 move. Yet, Minnesota last year produced crops which, with the 
 value of the live stock and the poultry and butter output, were 
 more than twice this figure, or $431,344,725. 
 
 Population Expands The population of less than 200,000 in 
 With Minnesota when the construction of the 
 
 Railroads first ra q roac j s began, has increased, with 
 
 the expansion of railroad facilities, 
 to a total of 2,075,000. Minnesota had no railroads in i860, but 
 has 8,814.27 miles now and stands eighth in miles of railroad 
 among the states. 
 
 This large railroad mileage, so absolutely essential to the 
 highest development of agriculture and to the growth of the 
 State, gives employment to about 62,000 people, paying annually 
 more than $36,000,000 in wages. On the conservative basis of 
 four persons supported by each wage-earner, this means that 
 248,000 people are supported directly by the operation of the 
 Minnesota railroads. This is about one-eighth of the population 
 of the State, and is more than the population of the prosperous 
 city of St. Paul. 
 
 How Railroads For the year ending July 31, 1911, the State 
 Aid Support taxes received from the various counties, as their 
 Of State contribution to the support of the state govern- 
 
 ment and institutions, were $4,611,597, while the 
 railroads paid $3,896,091, almost as much from a business which 
 represented only one-eighth of the population, as was paid by the 
 other seven-eighths. Surely this was a very liberal contribution 
 from but one form of business. 
 
 6 
 
Creating New Now, not only the one Pacific railroad dreamed 
 Trade of by Mr. Wheelock, but three, connect Min- 
 
 Routes nesota with the Pacific, while other routes, made 
 
 up of two or more railroads, furnish additional 
 facilities. Mr. Wheelock took an optimistic view that in time 
 the products of the Orient would find their way across Minne- 
 sota to the eastern markets. Shipments of Chinese and Japanese 
 silks, tea, matting, hemp and other articles from the Orient ar- 
 rive at Pacific Coast ports and are carried east through this state, 
 helping the railroads in a small way to maintain themselves so 
 as to care for the domestic business of importance to the farmer 
 and merchant of this State. 
 
 How Law Neither Mr. Wheelock, nor others who believed 
 Hampers j n th e growth of this great country, foresaw that 
 Commerce the politician (not the Statesman) would attempt 
 to so frame the laws in this country that the rail- 
 roads could not participate freely in any business coming from 
 the Orient to the United States, or sent back to the Orient 
 from Minnesota, without so disturbing all other rates that 
 they could not afford to engage in the business ; nor did 
 anyone imagine that a public policy would be seriously con- 
 sidered which would tend to prevent Minnesota and the Missis- 
 sippi Valley from reaching the Pacific Coast with their products 
 in competition with the same articles produced east of the Al- 
 leghany Mountains. And yet that is what is confronting the 
 great Mississippi Valley, with its varied industries, today. Unless 
 the people rise up and demand of their Congressmen and of 
 the Commerce Commission that their railroads have the right 
 to place the products of the Mississippi Valley on the Pacific 
 Coast and in the Orient in competition with the same articles 
 produced elsewhere, without forcing the railroads to reduce all 
 of their intermediate rates, that section of the country will be 
 closed to our merchants and manufacturers and the policy sug- 
 gested will tend to draw a circle around Minnesota, beyond which 
 she cannot trade. 
 
 7 
 
Pacific Coast Those who say that to make a lower rate to the 
 anc * Pacific Coast than to intermediate points creates 
 
 Panama ana an un j ust discrimination against interior points 
 ignore the fact that the Pacific Coast, with ocean 
 transportation, is independent of transcontinental railroads for 
 the movement of freight from the Atlantic seaboard; and also — 
 which is more important — is independent of the Mississippi Val- 
 ley as a source of supply for many manufactured articles. Near- 
 ly all that the Pacific Coast needs may be shipped from the 
 Atlantic States by the Panama Canal or may be imported from 
 foreign countries, and whenever the railroads make the rate to 
 the Pacific Coast which is necessary to equalize the cost of these 
 commodities handled by ocean, they only change the source of 
 supply and substitute one means of transportation for another; 
 the difference between the cost of any commodity delivered at 
 the Pacific Coast or at some interior point would be the same 
 whether the railroad entered into competition with the ocean 
 carrier or withdrew entirely from the business. 
 
 Increase in 
 
 Railroad 
 
 Mileage 
 
 The great advance in agriculture in Minnesota has 
 been the natural result of the building of rail- 
 roads. In i860 the whole United States had only 
 30,626 miles of railroad. In fifty years the miles 
 of railroad have increased, according to the Commerce Com- 
 mission, to 236,869 miles, and the miles of all tracks — second, 
 third and fourth tracks, sidings and yards — to 342,351 miles. 
 In the 23 years ending in 1910, the number of tons of freight 
 handled increased 257 per cent, and the number of tons handled 
 one mile 324 per cent. The mileage of freight trains increased 
 80 per cent, and of passenger trains 112 per cent. 
 
 Without this great growth in trackage and in work done on 
 the tracks the produce of the farms in Minnesota and in other 
 states could not have been marketed and farm development 
 would have been much less rapid and confined quite largely to 
 regions where wagon or water haul would reach a consumer. 
 
 8 
 
Falling Rates In spite of the great increase in wages, taxes 
 Save much and the price of many classes of material, 
 
 to Shippers freight rates have not increased, or even re- 
 
 mained stationary, but have dropped approx- 
 imately 25 per cent. The farmer and shipper obtains as much 
 freight transportation today for $3.00 as he received in 1888 for 
 $4.00. On the Northern Pacific, only one of many roads, the 
 fall of rates has been such that if freight shippers and passengers 
 had paid, in every year since 1885, the same rates as in that 
 year, the additional revenue to this one railroad would have 
 been $583,879,996.25. This very large (sum represents what 
 has been saved to the users of the Northern Pacific, by means 
 of reductions in rates, which have been very largely voluntary. 
 It is equal to $63,986.84 for every day during that twenty-five 
 year period. A most experienced railroad officer estimates 
 that the saving to the purchasers of rail transportation in the 
 United States in the fifteen years from 1894 to 1909, inclusive, 
 amounted to $1,300,000 a day, or $7,144,343,000 in all, which 
 saving has been possible because of the effective work done by 
 the railroad owner, officer and employe in creating and operating 
 the American railroad machine. 
 
 Wagon Haul Thirty years ago in Minnesota grain was hauled 
 vs> . 60 miles by wagon to some of the river towns 
 
 Rail Haul and c j t j es having a railroad. Today, nearly 
 
 all the farm produce comes direct from the field 
 to a nearby railway station. Where the farming area was form- 
 erly limited by the length of wagon haul, the railroad has now 
 made it possible to use nearly all of the agricultural land and 
 in some of the Minnesota counties many townships are served 
 by two or more railroads. 
 
 Over the entire United States the same development fol- 
 lowed the building of new railroads, and farm output has in- 
 creased so rapidly that in 1910 it had a value of nearly $9,000,- 
 000,000, and had nearly doubled in 1 1 years. The natural re- 
 sult of this great railroad expansion has been a change in farm- 
 ing conditions, an increase in land values and a decrease in 
 the amount of free land that can be obtained from the Govern- 
 ment. 
 
 9 
 
Responsibility Coincident with the great development of agri- 
 
 t ^ ie culture and transportation the population of the 
 
 Farmer . , , . 1 ^ , . 
 
 country has been growing at the rate of 2 i-io 
 
 per cent each year and growing faster in the 
 
 cities than in the country. There has been thrown upon the 
 
 farmer a greater responsibility than before, of increasing his 
 
 production in order to feed the increasing population. 
 
 Soil experts pointed out long ago the possibility of exhaust- 
 ing new and rich land by poor farming, and during the past 
 few years the states, business men, the State and Federal Govern- 
 ment and the railroads have all been working closely with the 
 farmer, trying to improve the methods and increase the pro- 
 duction. 
 
 National Welfare The farmer is under the obligation to the 
 
 depends on whole population of the United States of 
 
 gricu ure making the best use of his land, because the 
 
 welfare of the country depends very largely 
 upon his efforts and its people must be fed from the products 
 of his acres. There is much talk about efficiency and inefficiency 
 in the railroad business and in other forms of business. The 
 railroads are trying hard to improve and are working steadily in 
 order to give safer and better service to the public. There is the 
 same necessity of improvement in farm methods and production. 
 
 Costs, Profits One of the most important facts shown in the 
 anc * # investigations of the Minnesota state agricultural 
 
 Production school into farm costs and profits is that there 
 is great variation in cost of operation and profit 
 balance in the same districts and on adjoining farms. Only the 
 best managed farms are making the profits that are believed 
 to be possible for all the well improved farms of the state. North 
 Dakota led the United States in wheat acreage in 1910, with 
 Minnesota second and South Dakota fourth. The combined 
 acreage of this crop for these three states was more than three 
 times that of Germany, more than nine times that of the United 
 Kingdom, and greater than Argentina or France. In 1909 the 
 
 10 
 
wheat acreage of the three states was 1,151,000 less than in 
 1910, and the production was 232,394,000 bushels. The farm value 
 of this crop was $216,647,000. 
 
 System and Suppose the yield per acre had been that of 
 Organization Germany for the same year, or 30.5 bushels, in- 
 
 in Farming stead of less than half of this, there would then 
 
 have been 475,800,000 bushels to sell and the 
 tri-state farmers would have received $443,731,000, or an in- 
 creased amount on the crop of a single year of $227,084,000. 
 
 It may not be possible to at once raise the production of 
 these states to the German average, but no reasonable man can 
 say that it is not possible to raise the standard of farm efficiency 
 and thereby materially increase the average yield. An increase 
 in yield of one bushel per acre on the basis of the acreage of 
 1909 would have added $14,456,000. to the farmers’ returns. 
 This very large sum is the premium for every bushel of increase 
 in the average yield. From $10,000,000 to $15,000,000, de- 
 pending on the price of wheat, is annually lost to the farmers 
 of these three states, for each bushel by which the average yield 
 falls short of the possible yield. 
 
 Investment Upon the railroad owner, officer and employe falls 
 Needs of the duty of keeping the railroads of the country 
 in condition to move the commerce of the country, 
 and of adding to them yearly at a rate which will 
 take care of the demands of the people. This task means an ad- 
 dition of between $500,000,000 and $600,000,000 a year of new 
 capital. 
 
 This great sum will not be forthcoming unless people who 
 put money into railroads feel that their investment is safe, and 
 that they will get a return somewhat in line with what is 
 received from other forms of business in the same territory. 
 It is clearly to the interest of the farmer to help to so frame 
 the laws of the land that capital will freely invest in railroads, 
 because the farmer needs the best transportation and the widest 
 possible market for his products. 
 
 11 
 
Railroad American railroads — capitalized at less than 
 
 Capitalization $60,000 a mile, while those of England repre- 
 sent $275,000 a mile; those of France $139,000 
 a mile; and those of Belgium (owned by the government) $181,- 
 000 a mile — produce a larger output of transportation, carry 
 more passengers and freight, for less money, than any in the 
 world. Freight rates are lowest in the United States, and the 
 character of passenger and freight service rendered the public 
 is not excelled in any country in the world. 
 
 Opportunity The American farmer can do as well. With 
 
 for Higher the r i c h so jj G f ^-pis coun try, he can lead the 
 
 Farm Efficiency , , • , . ~~ . , , 
 
 J world in crop production, ini efficient farm 
 
 work, and in practical results from the stand- 
 point of money returns. When such a condition comes, ex- 
 perts from abroad will visit the United States to study Amer- 
 ican farm methods, just as they have been coming for many 
 years to study American railroad methods. 
 
 It is for the purpose of increasing farm yields, improving 
 rural prosperity and encouraging the better and more general 
 use of the land of this State, that railroads, banks, the State 
 and its educational department, organizations of commercial 
 clubs and individuals are co-operating with the farmer. In this 
 work there is no direct personal profit to be made for anyone 
 except the farmer himself, but its objective point is a bigger 
 and better Minnesota and a greater general prosperity in which 
 all may join. 
 
 Co-operation — Co-operation has been the keystone of the arch 
 Keystone in the development of business in America, 
 
 of Business j s becoming the keystone of improvement of 
 
 farm efficiency, and in Minnesota there are al- 
 ready several noteworthy examples of farm communities working 
 together for the common good. 
 
 The development of the co-operative creamery, in which Min- 
 nesota led, has helped to increase the output of dairy products 
 to an estimated value of $55,000,000 a year, and is easily the most 
 important. 
 
 12 
 
A co-operative merchandising experiment at Hanska m 
 Brown County has been successful and profitable. 
 
 Co-operative marketing is having a very interesting develop- 
 ment in St. Louis county under the direction of the Duluth 
 Commercal Club. Co-operative marketing of eggs through an 
 association has been a success at Dassel, in Meeker County, 
 where 22,000 dozen were marketed in eight months. 
 
 The eggs were graded as to size and color and were clean 
 and attractive, each bearing a number. The work of packing 
 was done by the farmers, who stood behind their association 
 and its guarantee to replace any egg found defective. In eight 
 months the association received only two complaints. 
 
 At Barnum a similar egg-selling association on the co- 
 operative plan has been successful, largely increasing the ship- 
 ment of eggs, guaranteeing an improved quality, and bringing 
 an increased price to its members. 
 
 The American railroads pay the highest wages in 
 the world ; the average pay in this country being 
 $668 a year, as compared with $382 in Germany, 
 $251 in England, and $260 in France and Austria. 
 Although American railroads pay more to labor than other 
 countries do, their service to business is second to none and their 
 freight rates are such that they haul 2,000 pounds, nearly a wagon 
 load of freight, 100 miles for only 75 cents. The charge for the 
 same service in England in $2.80, in France $2.20, in Germany 
 $1.64, and in Austria $2.30. 
 
 Only by the highest quality of management, the greatest 
 energy and most effective methods and the closest supervision 
 of all costs, could such a result be obtained. 
 
 To bring farm production and profits to the highest level and 
 to overcome the various difficulties he faces, the farmer must 
 utilize every new method, encourage the close co-operation of 
 all who can aid him, and strive for greater efficiency and for the 
 highest quality of output. 
 
 Railroad 
 Wages and 
 Rates 
 
 13 
 
Better Farming In successful farming, as in any business, there 
 in Minnesota must be system and organization. There is 
 no longer any question but what corn can 
 be successfully grown anywhere in the State 
 of Minnesota, including the Northern counties. The fact that 
 corn can be and is grown does not in itself mean successful 
 farming. That corn means beef is a common statement. It 
 ought to mean hogs as well, and farmers should systematize 
 their methods to make the best use of their corn and get out of 
 it the highest possible profits. 
 
 On the general dairy or stock farm there is some unavoidable 
 waste in handling and feeding grain, and a herd of hogs may be 
 maintained on a farm where other live stock is kept, with little 
 additional expense for shelter, care and food, over what would be 
 required in connection with the other farm animals. 
 
 Avoiding Waste The elimination of waste ought to be as much 
 and Improving the constant aim of the farmer as of a manu- 
 Methods facturer or railroad manager. A herd of hogs 
 
 following the cattle can be maintained on 
 what would otherwise be partially wasted. This is an item of so 
 great importance as to demand thoughtful consideration. 
 
 Six cent pork can be produced at a profit if proper use is 
 made of forage crops and dairy by-products. Experiment sta- 
 tion results show that a bushel of corn when properly fed will 
 produce twelve to fourteen pounds of pork. Hence when hogs 
 are six cents per pound there is realized about 80 cents a bushel 
 for corn. 
 
 Following is a quotation from Superintendent A. D. Wilson, 
 University Farm of Minnesota, in the “Minnesota Stockman”: 
 
 Minnesota as 
 a Live Stock 
 State 
 
 “Minnesota has not made the progress in 
 the live stock industry that those interested 
 in the welfare of the State might wish. In 
 fact , the State is considerably behind some 
 of the adjoining states in the amount and quality of 
 live stock kept. Wisconsin has about the same amount 
 of live stock that we have ; but Iowa has more than 
 twice as many cattle, and six times as many hogs. 
 
 14 
 
“With the relative amounts of stock given in the 
 above paragraph, the average income per farm in Iowa, 
 in 1900, was about $1,600; while for the same year the 
 average income per farm in Minnesota was but $1,000. 
 
 This shows that Iowa farms, with twice as many cattle 
 as were kept on Minnesota farms, and six times as 
 many hogs, brought in 60 per cent more income than 
 did the Minnesota farms ” 
 
 In this connection it is interesting to note that Minnesota 
 plants about 1,500,000 acres of corn each year, and over 10, ♦ 
 000,000 acres of small grain. Iowa produces over 9,000,000 
 acres of corn each year and about 5,000,000 acres of grain. In 
 Iowa the farmers fully realize the importance of dairying and 
 that the two classes of stock that make an especially profitable 
 combination are dairy cattle and swine. 
 
 Helping The farmer has done a great work for the United 
 States and for Minnesota, but he has a still greater 
 work and responsibility before him. He has, how- 
 ever, the great advantage of having nearly all other 
 forms of business anxious to help him in any reasonable manner. 
 The railroad owner, manager and employe are all trying to under- 
 stand better the difficulties and importance of the various farm- 
 ing problems. 
 
 Should not some of the same spirit be shown towards the 
 large investment represented by the American railroads and by 
 the 8,814.27 miles of railroad in this State, the safety and ade- 
 quacy of which means so much to the successful development of 
 the whole State? 
 
 Ample Everyone would like very cheap transporta- 
 
 i^Vita^ 1 * 1 ^ 011 ti° n > or even to have it free; but everyone 
 
 must have enough transportation or business 
 cannot expand. Enough transportation will 
 not be provided if the price is made so cheap by law that people 
 
 15 
 
will not invest their money, and they will not put money into 
 railroads any more than they will into any other form of business 
 unless they have a reasonable chance of profit. 
 
 In this State there has been a discussion for several years 
 about rates, both freight and passenger, and the questions are 
 not yet settled ; but how many people have posted themselves 
 in detail so as to form an accurate judgment about the justice 
 of the question? How many people know about such simple 
 figures as these taken from the sworn report of the Northern 
 Pacific to the Railroad Commission of this State for the year 
 ending June 30, 1911 : 
 
 Passenger Earnings per passenger train mile $1.49 
 
 Earnings Operating expenses for all trains per train mile 1.77 
 
 Difference $ .28 
 
 It may be argued that it is not fair to charge to passenger 
 trains the average cost of all trains, both freight and passenger, 
 although passenger trains mean great expense for higher grade 
 tracks, better stations, expensive cars, etc., but dividing the ex- 
 penses as nearly as can be done under the practice commonly 
 
 adopted the results are as follows : 
 
 Earnings per passenger train mile in Minnesota $1.49 
 
 Expenses 1.04 
 
 Difference 45 
 
 Taxes per train mile in Minnesota 06 
 
 Interest on bonds 31 
 
 Leaving only $ .08 
 
 per train mile to pay any profit. 
 
 On the basis of a similar small return of only 8 cents per 
 train mile the earnings of the Company in 19 11 on all business 
 would have produced only $3,485,819, or less than per cent 
 return to the stockholders of the Company. These few figures 
 show that passenger service is not contributing its fair share 
 towards the sum necessary to pay expenses, taxes, interest and 
 
 16 
 
a dividend to the stockholders and encourage investment in 
 those improved facilities in the way of trains and stations which 
 all of us would like to have. 
 
 It may be urged that this small return of 1^2 per cent 
 is enough because the property is over-capitalized. The 
 best answer to this is that in a recent searching in- 
 vestigation by Governmental authority it was found that the value 
 of the property of the Northern Pacific Railway Company em- 
 ployed in its transportation business was, on June 30, 1908, 
 $452,666,489, as compared with securities in the hands of the 
 public at that time amounting at par to $405,225,575.29. Since 
 that date new securities amounting to $17,986,924.71 have been 
 issued but only for bona fide additions to the property costing 
 much more than that, so that on June 30, 1911, the securities 
 in the hands of the public were $423,212,500, and the value of 
 the property, based on the Government figures and the additions 
 since, was $487,955,530. 
 
 Eliminating, therefore, the question of stocks and bonds, it 
 shows that the earnings on the basis of returns from passenger 
 train service would not be enough to pay a fair return on the 
 value of the property as given by the Government. 
 
 Railroads’ Railroads are great buyers, and when they are 
 
 Purchases prosperous buy very liberally. For example, 
 
 Help Business ^he coa ] p urnec j j n Northern Pacific engines last 
 year would afford a winter’s fuel supply for about 
 175,000 families, or keep warm approximately 800,000 people, 
 or more than one-third the entire population of the State. If 
 this coal had been loaded in cars of 50 tons capacity, it would 
 have made 1,231 trains of 40 cars each, or a combined train 373 
 miles long, or a train that would have a caboose in Minneapolis 
 and its engine 30 miles the other side of Jamestown. 
 
 One year’s purchases of lumber, including ties, would have 
 built a plank road 8 feet wide and 2 inches thick, in a straight 
 line from St. Paul to Boston, a distance of about 1,108 miles. 
 
 The two illustrations are given to show how large are the 
 transactions of one railroad in the conduct of its business. 
 
 17 
 
Railroad Owners’ How many people know, for example, that 
 Heavy the 
 
 owners of the Northern Pacific, ap- 
 Investment proximately 25,000 in all, have expended 
 
 $203,000,000 in the last 10 years in additions, 
 betterments and extensions to their railroad, all the way from 
 the Twin Cities and Lake Superior to the Pacific Coast, so as to 
 furnish the people along the line with adequate facilities? 
 
 This very large sum of money, equal to Mr. Wheelock’s 
 glowing prediction of the annual commerce adjacent to the 
 Pacific Coast, was expended by these people with the hope and 
 belief that there would be such a growth of business and such a 
 basis of rates and taxes that they would make a good return and 
 a return somewhat in keeping with the return received by others 
 in the same country who invest their money, time and energy in 
 other forms of business. 
 
 Railroad a 
 Factor in State 
 Development 
 
 of it. 
 
 These 25,000 owners of the Northern Pacific 
 and the 30,000 employes of that Company are 
 an important factor and force in working out 
 the future of Minnesota and the states west 
 They and the farmers are mutually interested in being 
 
 fair to each other. 
 
 What is true about the amount of money spent, the number 
 of owners and employes of the Northern Pacific, is true to a 
 greater or less degree about other railroads in this State and in 
 the country generally. The railroad owner and employe are 
 trying to do their full share in doing the work needed to carry 
 on the business of this State and of the country. 
 
 It is not easy for the farmer to get the best results even with 
 many trying to help. The railroad owner and employe have 
 their difficulties to meet in trying to solve the problems of 
 furnishing safe, regular and sufficient transportation to meet the 
 demands of a growing State like Minnesota. 
 
 18 
 
Practical It would seem as if better results could be ob- 
 Co-operation tained for all forms of business — farming, railroad- 
 Needed ing, merchandising, manufacturing and banking — 
 
 if all pulled together and did not attempt to come 
 to conclusions about business methods and results based on 
 half knowledge and misleading and distorted statements. 
 
 “Truth is mighty and will prevail” is a true saying about the 
 moral life of the Nation, and in due time it will prove to be true 
 about the business life of the Nation in spite of the demagogue 
 and trouble-maker. 
 
 Form 3886 
 
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