Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1873-11-07


The first step toward railroad reform, in
this country, is to insist that railroad pro
perry shall pay dividends on its actual cost
for track and equipment only. Until man
ayers can be restricted to this, we shall
have the through shipper favored at the cost
of the local shipper; worthless lines will be
built, and the dividends paid on the stock
out of the profits of through lines that lease
them; the whole producing, laboring, COM
mercial, trading and travelling public will
be swindied whenever opportunity offers;
the big fish will eat the little ones in Wall
street until they burst of very fullness and
set the financial world into utter confusion,
causing widespread suffering, bankruptcy,
ruin and starvation among the classes that
they have Systematically robbed of the
means to carry on their gambling opera
tions. 'But,' says a well-fed director
whose pockets are bursting with Green
Line profits, show are you going to strip us
Of our vested rights" Your vested rights
confer on you no ownership of the Ameri-
can people and give you ~ lien on their
labor. Your charter gives you no carte
blanche TO steal, and if they do we would
very suddenly divest them. We would in
finitely prefer "C@sarism' or any respecta-
bic form of despotism to your vulgar tyran-
ny and more vulgar robbery. - Chattanooga
Times.
Very true, so far as it goes. But
there are several elements which our
protective-tariff contemporary leaves
out of the problem. He argues that
railroad property should pay dividends
only on its actual cost, wholly ignoring
the fact that the actual cost has been
more than doubled by the tariff ON iron
of which tracks and equipments are
mainly composed. Radical class legis-
lation has thus doubled the cost of rail-
roads and doubled the dividends which
capitalists demand. Here is a grievance
far more serious than the watering"
of stocks, which our contemporary de-
nounces, for we believe the stock of no
railroad has yet been watered to over
double its original amount.
Another notable and widely opera
ting cause in increasing the actual cost
of railroads has been the almost uni
versal custom of building them on
credit. No individual can build any
thing so cheaply for credit as for cash.
Still less can any corporation, public
or private; and the larger the enter
prise, or the greater the venture, the
greater will be the difference between
actual cost Of building ON credit and
that of building for cash. Thus, again,
the actual cost Of our railroads has
been greatly enhanced above their in
trinsic value, and the dividends de-
manded of the people in the way of
freights proportionately increased.
Nor are we disposed to hold the peo-
pie themselves entirely guiltless in this
matter of building on credit. The
people have frequently voted away the
credit Of towns and counties and States
to push premature railroads, when they
knew perfectly wen, or ought to know,
that their bonds were being sold or
hypothetical often at half their value
at half the amount that the bonds
call for on maturity. The evil day of
payment has been thrown far into the
doubtful future, but in the meantime
capitalists are drawing double interest
on their investments in these bonds,
and the actual cost of the railroads, as
compared with a cash standard, has
been doubled.
These various causes, supplemented
with the watering andpoolng and bull
ing of Wall street gamblers, have made
the actual cost Of our railroads several
times as much as their intrinsic cash
value. The initiation could not last for
ever. There has been a tumble in the
fictitious figures Of Wall street, and
those who have bought at fancy prices
must suffer The crash Of September,
still undated. is but a natural effort 10
reduce the price of the railroads of the
country, not to their actual cost merely,
under extravagant management, but to
their actual value. We doubt that all
Of them, if any, have yet reached that
inexorable standard Of intrinsic worth.
Nothing short of another speculative
furore, now most unlikely, can ever re-
store the prices Of carly September,
until the natural growth of this youth
full country gives them the increased
business requisite to earn dividends
that viii raise their market value as in