MASTER NEGATIVE NO. 94-82031 10 COPYRIGHT STATEMENT The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted materials including foreign worl>^^ CJI 3 3 ID cr (A ^^ lO tilt-" CJ! ^-< OOM U> ^^, tJl 3 Q) > O _ a o m Q."n OQ rv>=: 00 -vi o o N X M ^ ^ ^d^; ^ ^: ^> * >*>* S 3 3 o ff"Ei;|5E|;u bo i;:^!;^ ABCOEFGHIJKLMNOPORSTUVWXYZ abc(le(ghi|klmnopqrstuvwiiyzl234667890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghijklmnopqrstuvwxyz 1 234^67890 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghiiklmnopqrstuvwxyz 12345678^0 ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghiiklmnopqrstuvwxyz 2.5 mm 1234567890 •''* ^f^ 1:> 6^ ^Vf^ A.^ r«^ ^^ O O IP > C w I TJ ^ m 3D O m /*> .<> ■'S. w< ^o t.^^ l-» N> U1 = 3 - 3 01 AB abcde ABCDE bcdefghi CDEFG fghijkli FGH jkIm «-^ «*^ di 05E IJKLW nopqr jaz •<. JO |3 »< ::d f^c N CO 01^ ^— 1 CT»X CJ1< ■vl-C OOM O^X >>!-< OOM s ^-«'>/». JUNIUS. THE POCAHONTAS STRIKE AND ITS CAUSES, P753 Cobnnbia ^Bniteniftp int4r(Cttpof}tftii$ink * THE LIBRARIES School of Business Given bjr F.C.Fackenthal I • l/ School of Bwinew Libruy ^olumbia Univewijy The Pocahontas Strike and its Causes. AN INTERESTING AND TROE REVIEW OF THE ENTIRE SITUATION. BY JUIVIUS. ' •"* i^ "^^ •=' ^M^ ..* . ■ <■ 1 . t J if - Tj 1 J 1 » • • « J 3 • • • « • 3 > • • t 3 J? ^6 7 P75'3 '. « 1 < • * » - ■ 1 • * « I • . . . • . » • 1 » • • ■ ; ' , ' . t , » « • s » ' « * 1 ■ ' * . • , » • • • < • • * • « » I • « • « • , • • • • • • I » ' t* r t « I 1 « I I t t I i • * t h THE POCAHONTAS STRIKE AND ITS CAUSES. A great many articles have appeared in the newspapers of the country for several days past in regard to the strike of the miners in the Pocahontas field and Flat Top field of West Virginia, and the articles referred to have had the effect of misleading the pub- lic, and the animus of the correspondence has been plainly for that purpose. Articles have been written by the parties in interest assailing the coal operators for having made the reduction of wages, and in order that the articles would have wide-spread circulation, an order for three thousand copies was given and the paper dis- tributed where it was intended to do the most good. The writer has been acquainted with a number of the coal operators for some years, and he likewise has had an acquaintance with the officials of the Norfolk & Western Kailroad Company for a like period. In order that the public may understand the methods pursued in the disposal of the coal from the Pocahontas Flat-Top field in the past, a history of the same may be interesting to your readers : In August, 1886, the Norfolk & Western Railroad, in order that it might have complete control of the coal business, prepared a contract and had the then producing companies sign the same. The contract was to run until December 31st, 1896. The contract provided that new coal companies might become parties tJiereto by agreeing to its conditions and signing the contract, which all of the new companies did. Whilst it may be refuted at this late day, yet it was impossible for a new company to obtain cars for coal shipments until they had first signed the producer's contract (a misnomer, as it should have been the railroad contract). Under the provision of the contract the railroad company had the right to appoint an agent, which it did, in appointing the Po- cahontas Coal Company. As the charter of the Norfolk & West- ern Railroad did not provide that it had powers to perform any other business than that of a carrier, it then became the owner of 2 the stock of the Pocahontas Coal Company, and made itself re- sponsible for the debts of the Pocahontas Coal Company. The Pocahontas Coal Company acted as agents for the sale of line trade coal, and it also received a commission of five cents per ton on tide-water coal, although it had appointed Castner & Cur- ran as its tide- water agents, who received ten cents per ton. The contract provided that seventy-five cents should be the minimum price paid for run of mine coal, but when a strike of the miners occurred in 1887 the railroad people advanced the price to the operators to eighty-five cents per ton, in order that the operators would in turn advance the miner's wages in order to terminate the strike. The advance of ten cents per ton was a voluntary offer on their part, and the operators then advanced the price per mine car from seventy to seventy-five cents for room-coal and the day laborer a proportionate advance, so that most of the increase ob- tained from the railroad company was given to the employees. The operator, the following year, was forced to sell his coal to the Norfolk & Western Eailroad for fuel purposes and three hun- dred thousand tons for Kew York harbor at seventy-five cents, and, whilst all other run of mine coal was paid for at eighty-five cents, yet the average price received by the operator was about eighty-one and a half cents. In dealing with these figures the reader will understand that out of the sum received by him he paid ten cents per ton royalty, leaving the residue to pay all of his employees and incidental ex- penses and profits. From 1889 to April, 1894, inclusive, the same concessions were made .in Norfolk & Western Railroad fuel coal and New York harbor coal, but the increased tonnage of eighty-five cent coal had the effect of increasing the average price received to eighty-three and a fourth cents. In April, 1894, the Norfolk & Western Railroad would only offer seventy cents per ton for all run of mine coal, with the condition that no reduction of miners' wages should be made. The above would be a total reduction of fifteen cents per ton, which the majority of the operators rejected, but made a counter proposition of accepting seventy-five cents per ton and not reduce wages, which was a loss of ten cents per ton from the same price they received in 1886, before advancing labor. When the operators would not accept the proposition of the Norfolk & Western Railroad they (the railroad company) called for an ar])itration of the differences, as provided for by the so- called producers' contract ; but when it appeared from the evi- dence submitted that the finding of the arbitrators was likely to go against the Norfolk & Western Railroad Company, they with- drew from the arbitration and would not abide by any decision made. There are few cases on record where tlie party calling for the arbitration withdrew so ignominously as did the Norfolk & Western Railroad Company. One of the leading officials of the Norfolk & Western Railroad, in giving his testimony before the board of arbitrators, stated that the operators should give the railroad all their coal at cost, as they had their store to live upon. He failed, however, to state that in the latter part of 1892 his company had advanced freight rates on merchandise received by the operators one-half more than they previously had been. It is strange to the average individual how it is possible for such an official, after such expressions and actions, to appear in the public press and present his claims in order to gain the sympathy of the public. After the failure of the arbitration on account of the with- drawal of the Norfolk & Western Railroad, a compromise was effected, whereby the operator received seventy-two and a haK cents for run of mine coal. We now reach the point where Mr. Doran, in his letter to Colonel May, speaks of the price of coal prior to April 1st, 1895, being seventy-two and a half cents, and Governor O'Ferrall, in treating on a subject of which he is totally ignorant, makes use of the same statement. Whilst it is true that the price prior to April 1st was seventy-two and a half cents per gross ton, yet both Mr. Doran and Governor O'Ferrall fail to state that the operator had, at the above price, suffered a reduction of twelve and a half cents per ton and had made no reduction in his wages paid to his labor. Both of the above gentlemen are like Bob Ingersoll in his assaults on the Bible— they make use of as much of the truth as is necessary to prove their case. If all of Governor O'Ferrall's official utterances are as unreliable as his statement regarding the coal situation he will, in time, bring down odium on his head. I It goes to show how unsafe it is for a man to attempt to treat on a subject he is wholly ignorant of. The first coal and coke was shipped from the Pocahontas field in 1883, and at that time the Norfolk & Western Kailroad paid one dollar and thirty-five cents per ton for the engine fuel ; but in 1886 the price was reduced to seventy-five cents per ton, and in April, 1895, to sixty-five cents per ton. According to the so-called producers' contract, one per cent, was deducted from all weights at the mines ; and whilst the tide-water coal was re-weighed at Lambert's Point and the excess credited to the operator, yet of all the coal sold for engine use and line trade the operator received no credit for the one per cent, deduction at the mines. Many of the railroads in West Virginia bought and sold coal the same as the Norfolk & Western Kailroad ; and as their sole desire was to increase their traffic at the expense of the producers, it became necessary to have legislation enacted that would prevent railroads in West Yirginia from purchasing and selling coal ; and, likewise, the Norfolk & Western Eaih-oad, having passed into the hands of receivers, appointed on the 6th of February, 1895, the receivers, as representatives of the United States Court, could not carry on a business which was not provided for in its charter. If the re- ceivers are the creation of the United States courts and owe a duty to the public in carrying on the business of a carrier, why is it that the attention of our Honorable Judge is not called to their actions of increasing ^freight rates, thereby compelling the opera- tors to reduce wages, which has brought on the strike, resulting in paralizing the business of the entire community along the line of road. The Norfolk & Western Kailroad to all public appearances, re- tired from the selling of coal on April Ist, excepting that in es- tablishing their freight rates they figured on the selling price of coal at the different points of delivery, and, after allowing fifteen cents per ton to the agent for selling and sixty-five cents per ton to the operator, they take the balance in freights. If, by the above, the Norfolk & Western Kailroad Company are not still in the sell- ing of coal, as well as a carrier, their position is hard to under- stand. The reader will bear in mind that the above sixty-five cents per gross ton to the operator includes one cent for inspec- tion and ten cents for royalty, leaving only fifty-four cents for the operator to pay his employees and incidental expenses. The reader will also remember that when the present rate of wages to the miner was established in 1887 that the operator received eighty- five cents per ton for his coal, or twenty cents more than the pres- ent price of sixty-five cents. In 1887 the Pocahontas Coal Company paid for the inspection of coal, whereas to-day the operator must pay one cent per ton, which together with the loss in price per ton makes him 21 cents per ton worse off in 1895 than he was in 1887, or 19^ cents less than he received in April, 1894. Notwithstanding the above large decrease in price per ton, the N. & W. R. R. have become incensed at the operators for having reduced wages which caused the strike, when they were the princi- pal cause. If the operators had received an average of 70 cents per ton wages would not be disturbed, but the reduction of 65 cents per ton was out of the question. The difference of 5 cents per ton has been lost many times to the railroad since the strike began. The total loss of price at tide- water between 1893 and 1895 is 36 cents per ton and the Railroad Company expect the operator to lose 19i cents of the above whilst they lose 16f cents, yet in dividing the net proceeds at tide-water they want 65 per cent., leaving the operator 35 per cent. If the division of profits holds good the same division of losses should hold good, which would give the operator about 70^ cents, which, after deducting inspec- tion charges and royalty, would leave him 59| cents. The writer has visited the coal fields frequently during the past year, and knows from th^ purchases of material made by the operators that they are economizing all they can and cannot be keeping up their needed repairs, which is only putting off the evil day. One of the operators, who has agreed not to reduce labor, in- formed me that he was instrumental in having the strike clause removed from the proposition. This would indicate that he wishes the other operators to have the burden of winning the strike, and it is to be surmised he would take advantage of it afterwards. 6 • Tlie freight rates that are now established show a vast discrim- ination against the line trade. Coal is laid down in New York for 40 cents per ton less than Eoanoke or Lynchburg. The oper- ator has no opportunity of increasing his tide-water prices unless all the other coal fields do the same. Prior to October 1st, 1894, the Pocahontas Coal Company re- ceived all its profits direct from the sale of coal, and afterwards they returned the same, it is said, to the N. & W. K. K. Company ; but on October iBt, when the Toms Creek Coal Company, an in- dependent orf^anization (free from the influence or protection of the Pocahontas Coal Company), began shipping from the Clinch Valley Division, the K. & W.R. K., in order that the Toms Creek Coal Company could not ask for the same rate of toll os originally in effect from Pocahontas, raised the tolls from 30 to 35 cents per ton. The advance of 35 cents per ton was made to absoi-b the profits in line trade coal which Jhe Pocahontas Coal Company origi- nally received. There was, however, enough profit left over to the Pocahontas Coal Company to cover their expenses. On the 20th of March, when it was evident that the Pocahontas Coal Company would retire from the coal business, a new rate was is- sued, again increasing the line trade freights about 10 cents per ton. It is claimed that the price of coal has not been advanced to the consumer since the retirement of the Pocahontas Coal Com- pany but that all the profits and commissions it heretofore enjoyed now go direct to the K. & W. E. K. Company. The effect, therefore, of the Toms Creek Coal Company, of Clinch Yalley, coming into existance and the later retirement of the Pocahontas Coal Company, have had the effect of increasing the line trade freights, as stated above, from 30 to 40 cents per ton. The officials of the N. & W. K. E., in their published inter- views, ckim that the operators of the Pocahontas field have grown immensely wealthy whilst the Norfolk & Western Eailroad has been steadily losing money. Those who are intimately acquainted with the officials of the road know that they are not the men who will stand idly by and see another take all the profits and they none. If their expression be true that the operators of the Poca- hontas field, who are accredited as being men with not more than the average business capacity, have the acumen to make money and the Eailroad officials not, then the stockholders of the N. & W. E. E. should exercise more care in their selection of their officials. The opinion shared by all those best acquainted with them, is that the operators of the Pocahontas field are a thorough-going, practical set of business men, who have acquired what they have through hard labor of a lifetime and have no failures credited to their histories. An examination of the plants erected by these people will demonstrate that wisdom and experience were made use of and nothing has been done by them that can be pointed out as a blunder. The officials of the N. & W. E. E., in their several newspaper interviews, claim that they have made no money; but a careful perusal of their funded debt at present of over fifty-eight millions will be found interesting and conclusive that the ability to borrow money nmst have been great or otherwise that the pros- pects of the territory of the Pocahontas field must have been promising. It may be the latter, as the writer has a clear under- standing that the money was raised to build the Ohio extension by the operators guaranteeing to build additional coke ovens. The Atlantic, Mississippi «fe Ohio E. E. was foreclosed on the 10th February, 1881, and reorganized under the name of the Nor- folk & Western E. E. The first years business published for the K ife W. E. E. is 1882, and shows a gross earning that year of $2,429,740 and an interest charge of $729,359, with a mileage (5 foot gauge) from Norfolk to Bristol of 408 miles. During the same year the New Eiver Division, from New Eiver to Pocahontas, a distance of 73 miles, was under construction. In March, 1883, the first coal shipments were made from Pocahontas, and during 1884 and 1885 coal shipments were made from Mill Creek and Simmons Creek. At this time the operators sold their own coal direct to the con- sumers and realized $1.15 per ton for run of mine, whilst the Eailroad Company, according to a previous contract, paid $1.35 per ton for engine fuel. In 1885 the first coal was shipped to tide-water. In this year we find a gross earning of $2,771,121 with an interest charge of $1,212,212 and a mileage of 510 miles, 8 which, when compared with 1882, shows an increase of 102 miles, $341,381 in gross earnings, $482,853 interest. In 1885, which was the beginning of prosperity for the road, we find the freight traffic composed of the following : • Iron ore. ^^'^^ *°'* Pig iron 23,209 '' (W - «9138 " Coke. 48.6" " Stone 15,623 « Encore and spelter. ^j^^I ^ Other mmerals... ^^'^^^ Miscellaneous freights, bU,519 Total 1,199,790 " From the above a gross earning of $2,191,352.14: was received. Three hundred and eighty-eight thousand and eighty-seven pas- sengers were carried during the year, together with the mails and express, $579,768.73 were realized— making a total as above $2,771,120.87. From 1885 to 1889 a moderate amount of railroad was built, only amounting to 81 miles, which included the extension from Simmons Creek to Flipping Creek and from the east end of the Flat Top Tunnel to Kyle and the Cripple Creek branches. The gross earnings for 1889 were $5,597,124 and interest charges, $1,492,873, and a surplus of $765,047, out of which a three per cent, dividend was declared on the preferred stock. The earnings in 1889, as compared with 1885, showed an increase in the gross of $2,826,003 and an increase of interest $280,661. During the following year, 1890, the Shenandoah Yalley E. K. was acquired by purchase— increasing the total mileage to 826 miles, and at the same time increasing the interest charges $409,741. This was the boom year, and as all the furnaces were running strong and the coal and coke increased, the mineral traffic amounted to 3,558,869 tons and the miscellaneous freight 1,500,726 tons. On account of the increase of mileage in 1890 the operating ex- penses were 64 per cent, of the gross as against 62 2-10 per cent, in 1889. The gross earnings increased in 1890, leaving a surplus of $1,054,611, from which a three per cent, dividend was de- clared. Whilst the gross earnings increased, yet the profits per ton per mile during this year, on account of the increase of mile- 9 age, was only one mill and 92-hundreds against two mills and 5-hundred8 the preceding year. In 1891 the road had in opera- lion 1,091 miles, an increase of 265 miles more than the preceding year. During this year the Clinch Yalley Division was in operation, the Scioto Yalley Division and the line from Kenova to Dinges. The gross earnings in 1891 increased, as compared with 1890, $1,626,124 and the interest charges $363,516, leaving a surplus (the largest in the history of the road) of $1,203,789, from which a three per cent, dividend was declared. The principal increase in gross earnings came from the mineral traffic as well as from the local passenger business, as shown below : 1890 1891 Increase. Iron ore, tons 480,984 539,339 58,355 Pig iron, tons 235,844 283,590 47,746 Coal, tons 1,892,969 2,341,226 448,257 Coke, tons 499,148 466,016 *33,761 Stone, tons 187,683 247,863 60,180 Zinc ore and spelter, tons 14,420 18,672 4,252 Other minerals, tons. 247,821 258,178 10,357 Miscellaneous, tons. 1,500,726 1,643,057 142,331 Revenue from freighL $5,727,784 $7,090,316 $1,362,532 Local passengers 1,477,248 1,855,891 378,643 Through passengers 41,983 31,631 *10,352 Revenue from local passengers $1,436,010 $1,645,089 $209,079 Revenue from through passengers $176,250 $174,503 *$1,747 In March, 1892, the Lynchburg & Durham R. R., 115 miles long, and the Roanoke & Southern R. R., 121 miles long, were leased and operated ten months that year at a loss of $35,659.42. In November, 1892, the Ohio Extension was open to traffic, and the road operated during that year an average of 1,308 miles. In 1892 the largest number of tons of blast furnace raw ma- terial was consumed and the greatest quantity of pig iron made in the history of the road. The coal and coke tonnage has been on the increase each year, but the mineral traffic has been de- creasing, as shown below : * stands for decrease. 10 Tods. 1891 1892 1893 1894 Tods iron ore., 639,339 618,757 485,851 460,319 Pig iron 283,590 417,611 298,257 280,915 CkMd 2,341,226 2,636,073 2,869,215 3,403,874 Coke 466,016 499,777 639,548 865,684 Stone 247,863 364,963 208,513 151,180 Zinc ore and spelter 18,672 22,805 19,924 13,313 Other minerak 258,178 245,675 178,606 166,382 Mificellaneons. 1,643,057 1,819,066 1,725,821 1,696,460 Total freight, in tons. 5,797,941 6,624,727 6,325,735 7,038,127 Eevenue on freight $7,090,316 |7,763»345 17,987,766 $8,479,827 In the early part of 1892 the price of pig iron declined and it hecame necessary for the furnace owners to obtain reductions in the price of iron ore, coke, and concessions in railroad freights. The furnaces being located at such a long distance from place of delivery that, even under the beet conditions, prevailing freights would have to be low. In order that an idea of the passenger business of the road might be ascertained for the last four years, it is appended below. The cost of operating per mile in recent years has been as much as many roads receive for carrying pas- sengers per mile : 1891 1892 1893 1894 Local passengere 1,855,891 2,198,669 2,025,287 1,837,322 Through passengere -. 31,631 34,240 27,100 22,309 Total 1,887,522 2 232,909 2,052,387 1,859,631 Kevenue, local passengers, $1,654,089 $1,707,896 $1,561,851 $1,395,090 " through « 174,504 172,923 159,343 127,043 «« maU and express, 278,133 308,717 323,657 338,492 Ttotil $2,097,726 $2,189,536 $2,044,851 $1,860,625 Per Fimenffer per mUe, Cents, Oents. Otnts. Gents. Earnings. 2.938 2.861 2.897 2.925 Expense « 1.867 2.031 2.235 2.307 Profits 1.071 0.830 0.662 0.618 The falling off in profits in the passenger department is very noticeable. The earnings per passenger per mile in 1894 was practically the same as in 1891, yet the profit per passenger per mile in 1894 is 0.453 cents per mile, which has been caused by running passenger trains over branch lines where very little busi- 11 ness is done. This is an evidence of the large increase in mileage reacting against the earnings. The passenger department of the business is one whose charges for transportation are better fixed than in the freight department and fewer modifications are made in rates. Notwithstanding this, the reader will observe the rapid increase in the operating cost of same, although the rate charged remains the same. In order tliat it may be seen whether the ofiicials who recently stated in the public press that the Norfolk & Western Eailroad had not made any money was giving correct information to the public or not, the reader will see below comparative statements of tonnages be- tween 1885 and 1894, also the earnings which disprove such state- ments : Fbeioht. 1885 1894 Increase. Tons iron ore 60,825 460,319 399,494 Tons pig iron 23,209 280,915 257,706 Tons coal 499,138 3,403,874 2,904,736 Tonscoke 48,571 865,684 817,113 Tons stone 15,623 151,180 135,557 Zinc ore and spelter 1,021 13,313 12,292 Tons other minerals 36,884 166,382 129,498 Tons miscellaneous 514,519 1,696,460 1,181941 Total 1,199,790 7,038,127 5,838^ Local earnings. $1,453,124 $7,107,147 $5,654,023 Through earnings 684,996 1,245,603 560,607 Miscellaneous earnings. 53,232 127,077 73,845 Total $2,191,352 $8,479,827 $6,288,475 Earnings per ton per mile — cents 0.741 0.451 Dec, 0.290 Expenses « " " 0.443 0.331 «* 0.112 Profits « « « 0.298 0.125 " 0J78 Average distance per ton hauled 246.6 267.3 20.7 Average tons frt. in each car loaded, 13.31 18.61 5.30 Passenger. Local passengers 365,896 1,837,322 1,471,426 Through passengers „ 22,191 22,309 118 Total 388,087 1,859,631 1,471,544 / l^evenne from local passengers Bevenue from through passengers. Berenue from mail and express... $387,687 70,758 121,324 $1,395,090 127,043 338,492 11,007,403 56.285 217,168 Total $579,769 $1,860,625 $1,280,856 Earnings per pass, per mile — cents... Expenses " " " ... Profits II 3.027 1.777 1.250 2.925 2.307 0.618 Dea, 0.102 0.530 Dec., 0.632 Equipment. Locomotives. « 127 417 290 Passenger cars 56 255 199 Freight and other cars 8,697 17,245 13,548 As the foregoing sliows the large increase in freight and pas- senger traffic, as well as increase in equipment, the following state- ment will show the rapid increase in mileage, gross earnings, in- terest charges, &c., &c. : Average Tear, miles operated. Per cent, of Operating Expenses to Mile. 1882 408 1883 481 1884 503 1885 503 1886 m 1887 527 1888 64i 1889 mi 1890 826 1891 1,091 1892 1,308 1893 1,556 1894 1,567 Year. Interest Charges. 1882 $729,359 1883 810,792 1884 1,020,099 1885 1,212,212 1886 1,193,786 1887 1,244,983 1888 1,308,528 1889 1,492,873 1890 1,902,614 1891 2,266,130 1892 2,475,761 1893 3,074,089 1894 3,107,507 59.5 60.3 58.4 61.3 62.2 64. UK. A 00.4 70.6 72. 74. Gross Operating Net Earnings. Expenses. Earnings. $2,429,740 $1,107,163 2,812,776 2,711,153 2,771,121 3,252,057 4,254,794 4,899,599 5,597,125 7,561,916 9,188,042 9,952,882 10,032,617 10,340,452 Defic. Surplus. $377,804 492,410 174,196 90,383 131,663 635,528 418,559 765,047 1,054,611 1,203,789 726,313 Defic 99,742 325,375 1,649,292 1,960,909 2,483,780 3,001,927 3,483,352 4,838,610 6,009,767 7,031,673 7,199,460 7,693,905 Dividends on Preferred Stock. 4 per cent 1,303,202 1,194,295 1,121,829 1,291,147 1,771,013 1,897,672 2,113,772 2.723.305 3,178,275 2,921,209 2,833,157 2,646,547 3| per cent, scrip. \\ per cent. 3 per cent. 3 per cent 3 per cent 1^ per ct cash, 1 per ct scrip. It IS A comparison of the gross earnings and operating expenses of this road from 1890, when there was an average of 826 miles in operation, and the year 1894, when there were 1,567 miles in opera- tion, will show a rather interesting state of affairs. Whilst the gross earnings during that period increased $2,778,536, jet it added an additional charge to the operating expenses of $2,855,295, which absorbed more than was earned in the gross, hv other words, there were 741 miles added to the system which has not increased the net earnings one dollar, but it has increased the in- terest charges $1,204,893. It is easy to refute the statement that the carrying of coal at low rates was the direct cause of the bankruptcy of the road. Coal freights of the character that is shipped from the Pocahontas field are handled more cheaply than any other class of freight, and even at the low rate per mile there is money in it for the railroad company. There was a falling off in the rate per mile of .00063 cents in 1894 as compared in 1893, and if applied to all the freight shipped over the line it would show that if the same rates per mile had been attained in 1894 as in 1893 that the N. & W. K. K. would have reahzed $1,185,393 more on their freight in 1894 than in 1893. Granting that on the coal shipped to tide- water there was about $400,000 reduction in tolls made in 1894, then the re- mainder, $785,393, must have been lost in carrying furnace pro- ducts and through freights. The through freight has been ex- pensive to the company, but the management have made every effort to capture it, for what purpose it is not known, unless to have the reputation of running a trunk line. The failure of the N. & W. E. E. was predicted in the press of London nearly two years ago. It was seen at that time that they had expanded too rapidly. Not that the necessities of the road required it, but because money was easy to obtain and a great system was to be acquired. A study of the geographical conditions of the road will convince a person that it is only the terminal points of the extensions that furnish any freight. The points along the road are almost barren. This is time of the Ohio Extension, the Clinch Valley Division and the other branches, which are suckers, instead of feeders. The passenger business of the road indicates this, because the records show a very small amount of travel outside 14 of a few points. It is a remarkable showing that only the same number of through passengers were carried over the road in 1894 as in 1885, whilst the local passengers increased 1,471,426. In order to ascertain that the direct cause of the bankruptcy of the road was the rapid extension of the system and the acquiring of unprofitable lines, a review of the situation from 1889 to the present will be necessary and convincing. The mileage in 1890, as compared with 1889, increased 235 miles, the gross earnings $1,964,791, the operating expenses $1,355,258, net earnings $509,533 and an increase of interest charges $409,741, or only a surplus of $99,792 above 1889. The mOeage of 1891 as compared with 1890 increased 265 miles, the gross earnings increased $1,626,126, the operating expenses $1,171,157, net earnings $454,970 and an increase of interest charges of $364,516, and only a surplus of $90,454 above 1890. The mileage in 1892, as compared with 1891, increased 217 miles. The gross earnings increased $764,840, whilst the oper- ating expenses increased $1,021,906, causing a decrease of net earnings of $257,066 and an increase of interest charges of $109,631, when added to the decrease of net earnings, makes a total deficit of $366,697 in 1892 as compared with 1891. The mileage in 1893, as compared with 1892, increased 248 miles. The gross earnings increased $79,735, whibt the operating ex- penses increased $167,787, causing a decrease in net earnings of $88,052 and an increase of interest charges of $598,328, when added to the decrease of net earnings, makes a total deficit of $686,380 in 1893 as compared with 1892. The mileage in 1894, as compared with 1893, increased 11 mOes. The gross earn- ings increased $307,835, whilst the operating expenses increased $494,445, causing a decrease in net earnings of $186,610 and an increase of interest charges of $33,418, when added to the de- crease of net earnings makes a total deficit of $220,028 in 1894 as compared with 1893. The above would indicate that no road could live under such circumstances. A compilation of figures will show, that from 1889 to 1894 inclusive, the sum of the gross earnings to be $52,673,034, the operating expenses $36,256,767, the net earn- ings $16,416,265 and the interest charges $14,318,974, which ab- 15 sorbed all of the earnings of the company excepting $2,000,000. The great disadvantage the JSf. & W. R. E. is at to-day is that it has secured money by selling bonds to make its improvements, when, if the management had been conservative in their railroad building, they would have been able to continue the payment of dividends on its preferred stock, and if the dividends continued there would have been little trouble in selling stock when ex- tensions^ were contemplated. As it was impossible to keep up the confidence in the preferred stock it became necessarv to sell bonds, and in many cases throw in the preferred stock as a bonus. The interest on the bonds has now reached such a figure that, even if the reduction in rate of interest on bonds is accomplished,\here will not be anything left to pay the stockholders. The manage- ment, therefore, after seeing the predicament they are placed in through their own financiering, have decided to wrest the neces- sary help they need from the coal operators, by advancing freight rates to such a figure that it has been impossible for the operators to come out whole without reducing labor. From the foregoing statement it will appear that during the year 1893, when coal sold at a good figure, that the increased in- terest charges and the increased operating expenses, on account of additional new mileage, had the effect of dragging the road down. The line of the N. & W. R. R. will never see many manufacturing enterprises located thereon, for the reason that the public, from the knowledge they have obtained from the treatment of its other shippers, the coal operators, will refrain from investing their money where, in a short time, they would have very little control over it. It is to be hoped, therefore, if there can be no change made in the management of its treatment of the public generally, that there wiU be in a short time a competing line of road into the region, that they may obtain the relief they are in need of. JUl^IUS. COLUMBIA UNIVERSITY UBRARIES This book is due on the date indicated below, or at the expiration of a definite period after the date of borrowing, as provided by the rules, of the Library or by special arrange- ment with the J Ubrartaa in cna irge. DATE SORROWED DATE DUE DATE BORROWED DATE DUE i • cas(ii4i)Mioo i ) D267 P763 Junius • The Pocahontas strike and its causes • ( 1j p. ?7sS3 f^fA ooiH ^ MAR 011994 NOV 3 19>4I END OF TITLE