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 The American Railway Industry

767

which affect its demand or supply, and which, through these factors, in ﬁuence the proﬁts of its producers. The production of anthracite coal is reduced by a strike. As a result, the demand for bituminous coal is increased. A failure of the corn crop reduces the proﬁts of the farmer and rancher. A cut in duties decreases the proﬁts of the manufacturer, and a change in internal revenue duties affects the proﬁts of the grower and distiller. Prices and proﬁts are in a state of constant change. No manufacturing industry can be certain of its earnings a year hence. From these disturbing inﬂuences, however, the railway company is, to

a large extent, protected. The great variety of its traffic prevents rapid changes in the gross amount. What is lost on one commodity is often regained on another, and the total tonnage is not reduced. This is well illustrated by a comparison of the gross earnings of the Pennsylvania Railroad with those of the United States Steel Corporation. The one is the largest railroad system in the United States and one of the best managed, and the other is the largest and one of the best managed and best organized industrials.

The steel corporation, moreover, manufac

tures a great variety of products, so that its demand would naturally be more stable than those of steel manufacturing companies whose proﬁts are more narrowly specialized. It has also been able to maintain for long periods stable prices for most of its products, and its supremacy in the steel trade since its organization has only recently been challenged. Com petition, until the winter of 1909, has very slightly disturbed it, and yet the ﬂuctuation of its gross earnings, compared with the Pennsylvania

Railroad, which appears in the following table, where the ﬁgures are stated in millions of dollars, is extreme. The ﬁgures for the Pennsyl vania Railroad are as follows, stated in millions of dollars: 1902 1903 I904 1005 1906 1907 I908

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ll2 122 118 133 148 164 136

and for the United States Steel Corporation as follows: 1902 I903 1904 1905 I906 1907

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500 536 444 585 696 757

1908 . . . . . . . . . . . . . . . . . . . . . . . .. 482