These reductions were made without justification and for the purpose of reducing railroad revenues--and, incidentally, the expenses of the Postoffice Department, at a time when the net earnings of the carriers seemed large to the public mind, although under these favorable conditions the returns to the shareholders approximated but 4 per cent., whilst farmers were receiving 10 per cent., manufacturers 15 per cent. and National banks 18 to 20 per cent. It is true that there has been a large increase in the gross revenue of the railroads in the last ten years, but this has accrued from traffic other than carriage of the mails and has been accompanied by great increase in operating expenses. In fact, were it not for the economies of the carriers, effected by the use of more powerful locomotives and larger freight cars, the increase in operating expenses would, without doubt, have fully neutralized the growth in revenue. In the months preceding the panic of October, 1907, the railroads were quite generally showing decreases in net earnings in face of the largest gross earnings in their history. It was costing them much more than a dollar to handle every dollar increase in gross earnings. Since the hasty enactment of ill-considered legislation reducing mail pay, the revenues of the roads have been seriously affected by a change in business conditions which has reduced traffic without reducing prices of materials and labor. At the same time, legislation has increased labor costs by reducing hours of service. In 1898 rates for transporting the mails were too low to cover the cost of service, they are much too low now, and the losses on the mail service as a whole--there are some routes that pay--are borne by freight traffic entirely. RECEIPTS FROM MAIL AND OTHER RAILROAD TRAFFIC. The latest statistics of operations of all railroads of the United States are for the year ending June 30, 1907, issued by the Interstate Commerce Commission, July 9, 1908. From them we compile the following exhibit comparing results of 1907 with 1898--when a Commission of Congress, after complete investigation of the subject, recommended that mail rates be not reduced. Pct. Pct. Year ending June 30th-- 1907. 1898. Inc. Dec. Earnings from passengers $ 564,606,343 $266,970,490 111 -- Earnings from express $ 57,332,931 $ 25,908,075 121 -- Earnings from mails $ 50,378,964 $ 34,608,352 46 -- Earnings from freight $1,823,651,998 $876,727,719 108 -- Operating expenses $1,748,515,814 $817,973,276 114 -- Passenger train mileage 541,439,176(a) 341,526,769 58 -- Freight train mileage 662,106,857(a) 503,766,258 31 -- (a) Including mixed trains.