Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1877-03-17
Railroads.

The Railway Age OF Chicago, in an elab-
crate review of changes in railway condi-
ton during 1876, presents some gloomy
facts. 1t gives list of ten roads which
defaulted during that year, and these OPP
Grated 2,757 miles Of road, and their stock
and bonds were of the nominal value OF
Sl56, Gel 900. 1t also gives a list of forty
six roads which either passed into
the hands of receivers during the year, or
against which proceedings for foreclosure
were commenced. These operated 1876
miles of road, and their stock and bonds
were of the nominal value of $53S, 0OO,-
900. Finally, thirty roads were sold un-
der foreclosure during the year, and these
operated 3,s46 miles, and their stock and
bonds represented s217 $4,000. One
stage or another in the dark and down.
ward road toward bankruptcy was reached
during single year, by eighty-six corpor-
ations, operating 14,l79 miles of road,
about one-fifth of the whole railway mile
age in the country, and having nomin al
capital invested of 1912. 500, 900, nearly
one-ffth of all the capital nominally in
vested In railways in the United States.
1t is not claimed by the Age that these
figures are entirely accurate. Indeed, it is
so difficult to obtain correct information as
to all changes of this nature that the state
ment. though prepared with care, may
reasonably be supposed TO fall below the
of the railways appears in default or have
been sold under foreclosure in single
year, what shall we suppose has been
the proportion of roads which have de-
faulted since September, 1S74P As ear
ly as January, 1875, the bonds alone
then in default amounted to 1886, 000, 900.
During 1874, the number of companies in
default at one time was said to be 1872, and
their bonds amounted to 1857 10000
The magnitude of the losses sustained, by
bondholders and by stockholders, during
these trying years, it is utterly impossible
TO estimate indeed, In very many cases the
bondholders who have been compelled 10
buy in roads for satisfaction of their claims,
can as yet form no idea what part of those
claims they have thus secured. A very
large proportion of the stock of default
ing roads has proved total loss, but
considerable part of it never had any value.
Under the Credit Mobilier system of rail-
way building. the bonds have often rep
resented more than the whole actual cost
of the road-namely, the cost and the
profits of contractors, money-borrowers,
and money-lenders-while the stock was
left to represent the possible profits to be
realized. OF the roads built on this I'M
safe basis, wholly on borrowed capital, a
very large proportion have failed, or have
been absorbed or leased by other roads
on terms which differ from absolute fail
ure only in name.
Among the roads default ting during the
year the largest in capital was the st.
Louis, Iron Mountain and Southern, but
the Ohio and Mississippi and Kansas Pa
cific closely approached it in mileage. OF
the roads ordered for foreclosure, or
placed in hands of receivers, the most
important were the Atlantic and Great
Western. Chesapeake and Ohio, and Col
umbus. Chicago and Indiana Central. OF
the roads sold under foreclosure, the At
lantic and Pacific, Toledo and Wabash,
Burlington, Cedar Rapids and Northern,
and Pacific OF Missouri, each represented
of nominal capital s20,00o,0O0 or more.
and the four named represented Sl24,-
100000.
Since Jan. /, other companies of i'm
portance have been added to the SWELL
ing list. The Central OF New Jersey, It
Is not improbable, will soon be joined by
other coal companies. Nor do tue ex-
traordnary movements ia the stock mar
ket indicate great faith in the future Of
several other railways of the first import
ance. In fact, it seems not unlikely that
the year 1877 will see quite as many inn
portant railway failures as any other year
since the panic. The fact is that the
whole railway system, SO far as it has
been created or extended since the issue
of paper money, needs reorganization.
Roads built when iron cost fancy prices,
when labor and materials were worth
more than twice what they are now. when
capital could not be borrowed at less that
per cent, and when 30 cents per 100 Id