While the rates of freight per ton have decreased more than three-quarters in less than one-quarter of a century in the case of these 13 railroads on the whole average, the entire cost of the operation of these roads in this interval of time has not been diminished to any appreciable extent, as also stated by the same Manual. The main item in all the operation-expenses of railroads is the wages paid to the laborers of all grades; and the laborers are quite as well paid now on these 13 roads as they were in 1865, proper allowances being made for the changed and changing standards in the national Money. If, on a broad view, railroad employees of all grades have lost nothing as such in their wages in this interval; and the general public, including these laborers and also the capitalists concerned, have greatly gained, how can we account for the immensely lessened freight-charges while the whole operation-expenses continue substantially as before?
There is only one rational account to be given of this. And it is trustworthy. All known facts jump with it, and nothing substantial can be urged against it. The gains to the masses including the capitalists and the laborers _have come out of the capitalists as such_. This is apparent as well as real. Cost of Labor and Cost of Capital is the whole cost. If the whole cost of moving one ton of freight from Boston to Chicago is 3/4 less than it was 1/4 of a century ago, the cost of the labor being the same at the two points of time, then the conclusion is inevitable, that the _cost of the capital_ at the second point is less than it was at the first point. With this conclusion all facts agree. All the laborers connected with a railroad from highest to lowest must be paid at any rate, or else the trains will certainly cease to move, whether the stockholders receive any dividend or not on their capital invested. The original _stock_--the capital that built the roads--of many if not of most the railroads in the country, has been annihilated, a new indebtedness in another form called _bonds_ having taken the place of it. Even the nominal dividends of dividend-paying roads have declined in the interval from 10 or 8 to 5 or 4 _per centum_ in the general, that is, 50 _per centum_. It is perfectly evident on every hand, that there is something in the nature and progress of things, that makes for wages as contrasted with profits: wages hold on and relatively enlarge, profits decline or go out altogether.