Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1874-01-15
AMATTER TO THINK OF.
The Building of so Many Costly Rail-
roads the Cause of Our Financial
Troubles.

Troubles
The following is an extract from aspeech
of Mai. ". ). Sykes at LawTencebuTg:
The building of so many and OF such ex-
Den5iye railways has done much towards
producing the present financial crisis. The
average cost Of these roads in the United
States has been $50, 200 per mile, and they
have been mostly built by borrowed capt
ital. NoprovisiOn has been made, in many
instances. for anything more than the pay
ment of the interest on their debts, ana not
ALWAYS for that much. The Indebtedness
Of these companies amounts 10 Sl-Jll,0io,-
ga, and the interest upon this amount IS
Sl2O.g2T,TIj. Their gross earnings, per an
nom. amount TO S4I3,z4l, go ms shows
how enormous is their drain upon the pro
ductive interest Of the country; and yet,
their net earnings only amount to SlG3,-
IJ4.373. so much having been consumed IN
paying operating expenses and
in keeping the roads in repair.
Narrow gauge railroads, which some
ignorant or interested men are disposed 10
ridicule, would have done exactly as much
business as these roads did, and yet they
would not have cost half as much IN their
construction, and could have been operated
nj much less expense. II the country de-
sires cbedp transportation, which IS the
great element of wealth and prosperity, 1t
can only get it by having roads that are
built at much cheaper rates and that can De
operated at much less cost than these We
now have; roads that have some prospect
of reducing their Indebtedness anu OF
eventually paying it entirely. The plan
of borrowing hundreds Of millions OF dol
lars to build railroads in so much more eN-
pensiye manner than Is needed Will always
sooner or later, produce financial disasters,
or will entail upon the country The burdens
| of hedrV tGres "a the Irdy Of high trans
| DOrtQtiOn. So l thought and said two
wears AGO, and this financial crisis has con-
| firmed the views then expressed. we
need reform in the manner Of building
| and of operating our railroads. We must
have railways cheaply built and cheaply
run if we ever wish TO have 4 prosperous
country.
The gambling in stocks and bombs
which is the curse Of our country, and the
cause of our financial troubles has been
| the result Of this system Of building rail-
roads at such unnecessary cost without
making any provision for the payment OF
the principal of the debt.
PROPER METHOD OF ISSUING AND OF
SELLING BONDS.
No bonds either county, city or State
| should be issued. unless provision is made
| for the gradual payment of these bonds. In
| this way they would receive a fixed and
permanent value, and would not be liable
to rude, sudden and violent fluctuations
| Whilst there is nothing wrong IN issuing
bonds to build railroads or many other in
proyements, thereby throwing upon those
| who are to enjoy the benefits some OF the
| expense of building them, yet in all cases
| ample provision should be made at the
time ofthe issuance of the bonds, for their
Gradual redemption. This would, TO a
great extent, prevent stock or bond gamb-
| ling which has for years been all the rage,
and which has now brought forth Its natural
and legitimate fruits.
Another view of this question is worthy
| of serious consideration, and that Is the
importance of selling all railroad bonds III
the counties through which the roads are to
be constructed. If this were done the
roads would not pass into the hands OF
strangers with interests in opposition to
those of the original stockholders.
The people can, If they will, buy these
bonds and there will be no better invest
ment for capital, since the interest on them
must be paid punctually; and there should
be a sinking fund created TO redeem pOr-
ton Of the principal every year.
These bonds bear six, seven and eight
per cent. Who can find a safer or better
| investment? An eight per cent. county
bound is a better investment than the lean
of money to private individual at ten per
cent, because so long rs the county exists
all the property in the county is bound Tor
the redemption of these bonds. By selling
these bonds at home the money IS retained
in the counties and willgo TO increase their
general wealth. For these, and many other
reasons, l am satisfied bonds for the con
struction of railroads should be sold in the
counties through which the roads are to be
| huilt