Grant County herald. [volume] (Lancaster, Wis.) 1850-1968, 1874-10-15
The Railroads OF the West.

The New York Nation, in review
ing 'tPoor's Manuel of the Railroads
of the United States for 1884" and
"The American Railroad Manuel for
the United States and Dominion"
just published, says:
Gust now they are very melancholy
reading. 1t was but one short year
ago that every one was rich; coupons
were continually maturing, and were
promptly paid; stock which had cost
nothing, was sold at 90, at so, at 100
per cent. of its face value; new forms
OF securities, each more profitable
than the other, were put upoa the mar
ket as fast as they could be printed
and signed, and faster than the Joyous
brood of brokers could place them.
To-day, one quarter part of the whole
railroad bonded indebtedness of the
country is discredited; the coupons of
every fourth bond, when presented at
maturity, are returned unpaid AS
for the stock of the roads, the figures
are simply incredible. After you leave
the Atlantic seaboard, and get fairly
into the area of recent "wild cat' con.
struction, as compared with dividends
angels visits seem matter of daily and
almost hourly occurrence. Not div
idend is paid by any road in Michigan,
and but one in Indiana. Illinois boasts
five dividend-paying companies; Wis
consin one, and Iowa three; but Kan
sas, Nebraska, Minnesota, and almost
all the Southern states, are q dreary,
hopeless blank.
"Indeed, 1t requires some study of
the figures to enable US to realize how
all absorbing the mania for raili DAD
investment of the last six years really
was. 1t was simple craze. Under
the stimulus of the land grant system,
it swept through the country like a
first>class epidemic, and is probably
in its effects to-day occasioning not
less quiet suffering. Kansas was the
very hot bed of the disease, and a
very few figures, drawn from these
mannels. will illustrate the madness
which prevailed as regards that re-
gion, which differed only in degree
from others Ten years ago Kansas
had no railroad at all; it now has little
less than $500 miles, about % per
cent more than Massachusetts, with
one-third of her population; in other
words Massachusetts has seven times
the population of Kansas in compari
son with its railroad mileage. But the
Kansas railroads were built on the sale
of their bonds, not on their stock cap
ital; accordingly, we find them loaded
down with over $40 600, 900 Of indebt-
edness The interest on none of this
is now paid, but as long as money
could be borrowed with which to pay
it, it did not average less than s per
cent, of $5,600,000 per annum. All
that the Kansas roads in their best
condition ever pretended to earn was
about S3,400,O00, or less than 5 per
cent. on their bonded Indebtedness
Nor indeed did they ever earn that
amount, or anything which approached
it. The claim was that in business
which averaged but $4,000 per mile
in gross receipts the net receipts were
no less than 40 per cent. OF that
amount To one accustomed to deal
ing with railroad accounts such a
claim is simply preposterous 10 pro
duce such result, the operating and
construction account would be mud
died beyond all comprehension. This
is the time for liquidation; the day for
doctored balance sheets is, for the time
being, gone Kansas, like many other
of the Western states, is poor and
sparsely settled. To its railroad sys-
tenn it can contribute but very spar
ingly even for its population. 1t !:
probably safe to say that the cost O
operating and maintaining the Kansas
railroad system will consume for years
to come rs per cent. OF its gross re-
ceipts. The problem will then be how
to make at most SO, 0O0,0O0 per annum
nav s per cent. interest on 10000 200
of principal, besides large amount
of accrued md unpaid coupons which
are covered by the mortgages.
The simple truth is that madness
has ruled the hour-that the whole
system of recent railroad construction
in the West was dishonest aud rotter
to the very core. The only people
who made anything by it are the peo'
pie of the West-they secured then
railroad system, and, curiously enough
II is thew who are loudest in their com
ulaints over the results. Three hun
dred millions of external capital, npor
which not one cent of interest IS now
paid, have within the last few years
been applied TO Western railroad con
struction. 1t is all there, and canno
be removed. Yet the race OF unthritt
who have thus stripped themselves o
. their substance in feverlsh pursuit o
gam are now fercely denounced a
"grasping capitalits" by those wh'
| alone enjoy an assured use OF tn
wealth. without the unpleasant neces
sity of paying interest therefor. In
, bubble, however, is burst, and it WI
, probably be some years before IN
} hardy pioneer OF the West IS agar
r burdened by a too great eagerness 0
, the part of the East to develop nl
r means of transp 5rtation. 1t has Coz
8 a great deal to learn the lesson, an
!, after all it was somewhat elementar
Q one. We call ourselves ashrewd PEI
t ple. and yet We have just paid som
$ 5000. o0o, 900 to satisfy ourselves thi
t railroads in a wilderness arc po'
:. property"