The Sun.
London, England, 1870-05-16 00:00:00

INVESTMENT IN AMERICAN RAILROADS.

The Public Ledger of Philadelphia continues its
attack on the " wild-cat" railroad bonds offered by
American sellers in European markets. The sub-
ject of investment in American railroads is one of
general interest on this side, and deserves careful
consideration. The points advanced by the Ledger
are therefore worthy of close attention, and may
be thus briefly stated. The best newly located
railroad will not earn six per cent. on its cost in
less than five years—some of the projected works
thousands of miles beyond any traffic, and indeed
beyond civilisation, will not doso in fiftyyears if they
are carried to completion, and not abandoned in
despair from the utter hopelessness of any return
of profit whatever. Many of the enterprises have
no cash capital in them as a base for loans ; and
all the risk, therefore, falls on the mortgagee. Those
who have resuscitated some of the wild Western
railway enterprises are careful not to invest in them
any money of their own,but become, instead of rail-
way-makers, eager bondsellers, and that leviathan
borrower, the Northern Pacific Railroad, makes the
modest proposition to transatlantic capitalists for
a loan of $100,000,000 on long and " very pro-
mising" bonds without a dollar of paid-up capi-
tal, or having turned a shovel full of earth towards
the formation of the road. The Ledger stea-
dily opposes the large land grants, as tending
to alienate to monopolists the national domain
rightfully the inheritance of coming generations; and
the Northern Pacific is as great a " leviathan" in its
cry for American land as for European cash ; in
fact, it wants to have many countries to sell. The
supports for the superstructure of the Ledger are
these two—the improbability of railroads con-
structed in the Far West paying, at least within
many years, and the impolicy of large laud grants.
Putting aside the alleged dishonesty—the "rings"
within the companies, as asserted by Senator
THURMAN—these are what remain ; and they have
no more right to be accepted because the Ledger
says so, and the Philadelphia correspondent of the
Times backs the assertion, than have the state-
ments of the bondseller, except in so far as the ono
may be disinterested, and the other may not be so.
The run is against the Northern Pacific Railroad,
but it is openly maintained in the Senate that
against the projected line all the weighty influence
of the Union Pacific Railroad is thrown, though that
is denied by a Nebraska Senator ; to say the least,
it is probable ; and the Union Pacific Railroad
in itself embodied everything brought as a
charge by Senator THLRMAN against its Northern
rival. It was projected and constructed by a
"ring" without means, who made its members the
contractors, and built the property for themselves,
by themselves, extracting from the work a large
profit, and all at the cost of the nation in general
and of the bondholders in particular. The "ring "
made theirfortunes even to that scatter-brained in di-
vid.ual, GEORGE FRANCIS TRAIN. But who lost ?
Here was a railway ring selling bonds without any
"money basis or a shovelful! of earth " for a line
through the farthest and wildest part of the far
W est, thousandsof miles from civilisation, which has
proved one of the most remunerative properties ever
constructed. Nor that only ; for it has conferred
a. great, public benefit, on the nation more especial),
but on the world as well ; yet there is not a
charge advanced by the Ledger against the Northern
Pacific which could not with truth have been ad-
vanced against it. One of the accusations brought
against the Northern Pacific in particular, and the
far West lines in general, is the inducement for
immigration, the plots, and models of towns, the
Edens pictured in the howling wilderness of Da-
cotah and Northern Minnesota, and the through
tickets offered. It is on this point that the whole
argument breaks down. Railway construction in
the Far West and settlement, essentially go hand iu
hand ; and it is because the railway promoters will
promote immigration also that the Government
accord these land grants, and on that justify the
concessions. Divorce the two, and the Ledger is
right ; but let the two work together, and the
Ledger, we do not hesitate to say, is wrong. Take
the Kansas Pacific, and mark the effect of the line
towards Denver City as it progressed. Civilization
seemed to roll on with the revolving wheels of the
cars. We grant that a demon preceded its course,
a most extraordinary conglomeration of Western
devilment ; but on behind came the peaceful and
industrious settlers in daily increasing numbers till,
like a pent-up pond when the flood-gates are
opened, immigration poured up the valley, turning
the howling wilderness into a scene of life and
bustle, of rising towns, of ploughed fields, and
droves of cattle. What does the Philadelphia
Ledger say to this?—which, we assert, after the
Union Pacific, to be ere railway which most boldly
thrust itself into the wilds where the Indians roam,
and no civilization was near. Is the statement then
correct with which the Ledger set out as to the earn-
ings of the best newly-located railroads ? and are
th instances quoted as the experience of European
capitalists in the Atlantic and Great Western and
the New York and Erie applicable? The 'Erie, as
every one knows, is a fine line, running through the
most populous of the States, and having its terminus
in the metropolis. It would pay handsomely if its
earnings were not intercepted ; and it is no fault of
the enterprise, but of those who manage it, that it is
not profitable to the proprietors. Much the same
might be said of the Atlantic and Great Western ;
and we venture to predict that both will eventually
prove in a high degree paying concerns. But it is
not against such enterprises that the Ledger writes,
although it has to go to them as instances; and we
take this in itself to be a proof of weakness, for
surely a great and well-informed journal like the
Ledger, if it had any good and well-authenticated
cases in point, would have brought them forward.
While, therefore, the Ledger fails to support by
illustration its assertion, we give two remarkable
instances in refutation. Nor do we believe that
the Ledger, or Senator THURMAN, or the Philadel-
phia correspondent of the Times, appreciates the
movement now going on in Europe towards what
the last calls " the howling wildernesses." There
never before existed anything like the emigration
now becoming general over this continent, and by
what is it mainly induced ?--by constructing Western
Railroads through the waste places, whereby a
poor family is put on an available estate. The en-
terprise with which these undertakings are in the
United States carried through has been a main
cause for the worlds having given the Republic the
preference, and men in vain point to countries as
possessing greater advantages where the land is as
cheap and plentiful ; they are all passed unheeded,
the steady and increasing tide flowing freely to the
Far West ; and when the Ledger speaks of a railroad
not paying under 50 years, it drops that steady, un-
exaggerated tone so peculiar to it. What will be
the case in the United States fifty years hence is
beyond human ken, but some conception of what
is going on there may be formed from this simple
fact that up the narrow valley of the Kansas the
immigrants pass at the rate of 2,500 daily, and we
ask our readers to glance over HEPWORTH DIXON'S
account of his travels through that country four
years ago to get an insight into the astonishing
changes. Let those who have an old file of
the New York Herald turn back to the state-
ments of that paper, when men began to talk about
connecting New York with San Francisco by
rail. The Herald jeeringly suggested a tunnel to
Europe or a communication with the moon ; never-
theless the hue has been formed to the benefit of all,
except perhaps the Pacific Steamship Co., which it
has run out of existence, or rather diverted it from
a San Francisco and New York Company, via Pa-
nama, to a San Francisco, China, and Japan Com-
pany ; and a singular thing, too, and we wish our
readers to note this fact, to the benefit of the very
undertaking which forced the change, and we fully
believe the result v ill prove of the P.S.N. Co. as well.
We ask our readers to note this fact, because it affords
a proof that what kills in Europe, but spurs in Ame-
rica. The field is su open, the yield in reward of
well-directed enterprise so abundant, that projects
here termed w ild are there feasible; and we maintain
that a rich harvest will be reaped by judicious
European investment in West era enterprise, though
great care should be exercised in the selection, and
no statements accepted on the mere words of those
who have bonds to sell or on the statements of
the papers which have an object to serve in crying
them up.—Anglo-Ameriean Times.