The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1864-08-10
fMANclAL AND COMMERCIAL.
TunpAy, August DC P. N.

In the year 1850 the length OF railway operation
IN the United States exceeded tbs length open in Great
Britain the proportion Of about four TO three while the
capital invested railways in that country exceeded thai
Invested the United stsee in the ratio OF abous iost 70
OF the aggregate amount OF capital then insesteu ~
all the railways Of the world Great Britain haa coni
bu,ed fifty TOUR per cent aud yet the length Of road con
sruced With capital less than twenty seven per
cert OF the entire ergth IL thus appears by comparison
that the most costly by inference the most
~ valuable efficient, railways were those OF England
The United states had then six thousand FIVE hundred
and sixty I'VE miles Of railway open In which was H.
vested two hundred and sixty millions OF dollars, while
Great Britain mad only five thousand miles open, In which
had been invested two hundred millions OF pounds
sterling Since then the extent Of railway communication
10 the United States ucluding those in rebelion) has
Increased TO thrtytwo thousand eight hundred and
seventy miles constructed AT cost OF ST. 262 6lo
S3T $40 per mile In Great Britain and Ireland
the time the lines have Increased 10 eleven thousand
three hundred and eghtysx miles in length constructed
at a cost OF sl775 ,5s6, 400, or $l56,o2s per MILE
This enormous in cost OF construction OF the
English the American roads is be accounted for
by the fact that most OF railways were OF single
lines. constructed in light and cheap manner, WHICH In
England would have been regarded merely intended
TO temporary purposes whereas the Eng ish system
Involved the laying OF double tracks in the most solid
and expensive manner, with view to permanent
strength aud a heavy traffic. Nevertheless in the two
countries ours have the most profitable in
their returns.
The respective States from which roads hold their
charters exercise far greater control them than the
British government does those under jurisdic
ton, and The passage OF railway bill through any State
Legislature in this country is generally accom-
than it wculd be through the House OF Commons
The Introduction Of railways In England resulted as
many local monopoes OF transport there distinct
companies, and this evil speedily aggravated by
amagamaton AT the present day. therefore, we find
every OF the principal lines or railway Great Bri
tain gigantic monopoly, protected by act Of Parliament
and sustained by the public.
Hence railway shares regarded safe Investments
and their stock held chiefly by large class who live
upon their dividends and take little heed Of fuotua
lions in the market value OF securities. The vara.
tioEs In the quotations for British railway shares on
the London Stock Exchange very slight, owing
this reason and the absence OF that speculation which
the price OF railway la this country sub.
lect OF daily interest 10 thousands.
The plan Of constructing railroads by the undue and
premature issue Of bonds which has prevailed great
extent in this country, has operated very niurousy
the stock and the OF shareholders
The method generally pursued to pay the
twenty five per cen. in cash. fifty per cent in bonds
ibe remaining twenty five per cent 10 common stock.
The consequence was that as the proportion in cash
quite inadequate to carry the work. contractors
exacted much higher rates than they would have done
had there been large paid up capital 10 rely upon as
TO cover their loss by the conversion OF the bonds
Into money Moreover il was not uncommon clrcum-
Stance for from TOUR 10 six thousand dollars extra compen
patton per mile to be allowed by railway companies to
contractors when the bonds proved difficult OF nego.a
ton and in order TO hasten the completion OF their
This exhaustng process usually compelled resort In
payment for labor and material to fresh issues Of bonds
based the expected Income OF the roads When finally
the rails any particular road all laid and light
equipment provided the directors found the line poorly
stocked, badly baasted and encountered with large
floating debt This Of prevented it from doing
more for long time than pay running expenses out OF
Its traffic receipts. Had the work Of construction
not been commenced ill enough capital had been sub.
scrbed pay for the necessary labor and material
month to month as it progressed, the aggregate
would probably in the majority OF instances have been
least thirty per cent less andIn others gain would
have leen far greater No wonder therefore, that we
have had, aud still have, although in lesser degree
considerable number Of railways with bonded debts much
largor than their capital and which defaued the
matter OF their interest coupons. 10 this credit system
pursued at the start the many Of our
railway companies for the most part attributable
In the south the railways constructed chiefly on
cash basis and 10 consequence at cost OF about sixty.
three per cent Of that q the Eastern and Western roads,
and ay six per cont of those Of the Middle States
thus will be seen that although the roads
has been high comparison with that OF those Great
Britain might have been much less or, rather,
much better roads and rolling stock might bare been
constructed for the same money.
10 Gfes. Britain u late years attempts have been made
10 introduce this vicious credit system into railway
building but they have With little Encouragement
wy.o dan1t ~ obN for hn tai
vested in their railways They have secured good
albeit expensive, system, and yislds handsome
return We have TO pay for cheapness in iuferorisy
and lack OF oOrsbily ard our ssds viii cost far
10 tue long Gun than the British railways.
ahe money market Is easy but sluggish at seven per
cent call TO stock houses In foreign exchange
there little moro activity than yesterday observable;
but the rates low. Bankers sterling bills are
quoted at losh 100 for gold and 277 for currency.
Commercial bills offered al x73 ga Francs range
from 5.l3k 70 516.
The inclined TO rmness 10 day but there
noticeable change in the transactions. Compared
with the highest sales yesterday, New York Gen.
trail advanced at the first board TO day y per
cent Erie Railroad x, Hudson River TX, Mch
gan Central * Illinois Central y, Cleveland and Pitts
burg " Chicago and Rock Island u, Pitsburg and Fort
Wayne x, Cumberland Coal ~, Canton Company 4,
Quicksilver Mining ~ and Ohio and Mississippi certi6
Gates ". Michigan Southern and Delaware and Hudson
Canal sold the same. Cleveland and Toledo declined Il
per cent, Chicago and Northwestern IA and Mariposa r.
Stocks were . fraction OF at the second board, and
very United business was done.
There was active demand for governments at i'm.
proved quotations. Tho following were the prices OBJ
tancd at the first meeting OF the Board OF Brokers Cou
pou OF 1881 1904 1o7, registered five twenties
I0eZ l07 coupon 1--WE twenties 1905 a lo9x, octo-
tober e,euths Treasury notes lot, one year
certificates 95k e5k, skies Of 1867 1lsS, endorsed
coupon ives OF lsra o. Government stocks not
rm In the Afternoon. The registered Of 1881 closed
al 1907 and the coupons at 1865 the registered ave-
twenties al 1907 and the coupons II loej< loeh.