The foregoing shows an increase, in the average interest rate demanded upon new loans to railway corporations, from 3.90 per cent. in 1897 to 4.62 in 1907 and 5.04 in 1908. The increase in the rate from 1897 to 1907 was equal to 18.46 per cent. and from 1897 to 1908 it was 29.23 per cent. In other words, one dollar would pay interest on as much of the new capital secured by loans in 1897 as $1.29 would of the loans of 1908. The gross revenue of $105.00 obtained in both years from the typical shipment of fourth class freight between Chicago and New York, at the unchanged rate applicable to such a shipment in both years, would pay interest on $2,692.31 secured in the earlier year and on only $2,083.33 secured in the later year. The loss in power to purchase loaned capital therefore amounts to 22.62 per cent. In order fully to appreciate the importance of this rise in the cost of capital it is necessary to realize that very great sums of new capital are annually required for the necessary augmentation and improvement of railway facilities. This is made evident by the total yearly borrowings as shown in the foregoing tables, but it should be borne in mind that further sums, certainly not less extensive in the aggregate, have been raised through issues of stock, which promise no certain rate of interest, although these sums could not have been obtained unless the subscribers had considered it probable that they would, in the long run, receive returns in dividends at least equal to the "going rate" of interest. It is interesting to note that the aggregate of new capital secured by loans in each year has very largely exceeded the total interest payments to all capital obtained by borrowing. This is shown by the following table, the data in which, except those as to the sums obtained by loans, are from the reports of the Interstate Commerce Commission: Per ct. int. New capital Interest on paym'ts new Year.(a) borrowed. funded debt. borrow'gs. 1898 $ 390,803,025 $ 237,578,706 60.79 1899 215,039,851 241,657,535 47.76 1900 215,039,851 242,998,285 113.00 1901 512,559,403 252,594,808 49.28 1902 471,578,658 260,295,847 55.20 1903 427,358,965 268,830,564 62.90 1904 325,078,790 282,118,438 86.78 1905 635,304,659 294,803,884 46.40 1906 514,638,170 305,337,754 59.33 1907 708,351,929 323,733,751 45.70 -------------- -------------- ----- Total $4,706,650,122 $2,709,949,572 57.58 (a) Accurate data for payments to capital in 1897 are not available. FROM THE VIEWPOINT OF THE PURCHASER OF THE SERVICES.