The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1877-04-06
Railroad Property I'm tho United
ststes-A Great Opportunity for Sec

ststes-A Great Opport nifty for Sec
rotary sherman.
At last there has been q readiustment OF
through freight rates by the great trunk
lines, and it seems to be of such q nature
that it cannot be annulled in less than three
months time. A premature report of such
an agreement had the effect of improving
the prices Of railway stocks, thus showing
the public fact which it has not closely
enough considered-th that the reduced. or
lighting" rates, were Improbable and con-
trary to every sound business rule and prec-
edent We sincerely trust that this new
for the general interest of the country
that our railroads should be prosperous. In
the depressed condition Of general busi-
ness the railroads necessarily suffer.
1t is impossible for them to regain
any real prosperity until business revives.
But it is a great folly TOR them to sacrifice
J the profit on tho diminished amount OF
freights which remains to them by ruin
Gus competition with one another. We hope
that all parties to the compact will act in
good faith, and we regret that the Decem-
Der arrangement was broken by one of the
roads, prccipitating tho fresh quarrel which
has led to this new attempt at adjustment
We approach the subject now in very
different view from the interest Of the rail-
roads. We desire to gain tho attention OF
the Secretary of the Treasury and point out
to him great opportunity which he cannot
afford to let slip. A finance minister
| ought to be a very active-minded man, es-
| pecialIy when gigantic task is laid upon
him. Nothing is so fuctuating and unsta-
| Bile as the condition Of the financial world
not even the varying states OF weather
which affect the navigation of ship on the
ocean. Successful management of the fiscal
affairs of great governments requires as much
alertness OF observation MS the management
of vast private business. If merchant
has no forecast Of the market, if he is not
keenly alive to the immediate situation, if
he does not seize the nick of time to buy or
to sell, he was not born to make q fortune
A finance minister needs the same ready
perception Of emerging conditions 1t will
not do for him to hesitate when he ought to
act. 1t is an old lesson that time and tide
wait for no man. If Secretary Sherman is
not keen, quick and courageous enough to
recognize the great opportunities which fall
in his way and make the most of them be-
fore they pass he will fail to acquire the
reputation which is within his reach.
We respectfully call his attention to the
splendid opportunity which is presented to
him in the present unfortunate condition of
railroad property in the United States.
What, it may be asked, has the Secretary of
the Treasury to do with railroad prop
erty? Directly, to be sure, nothing; but
incidentally great deal. He is intellec-
tually narrow and financially blind if he
does not perceive the connection. One Of
his chief tasks is to refund something like
o thousand millions Of six per cent bonds,
replacing them by bonds bearing only four
and half or four per cent interest. This
is truly gigantic operation, but Secre-
tary Sherman may conduct 1t with
speedy and brilliant success if he
has clear perception OF financial relations
and confidence enough in his own judgment
to act on it with boldness and vigor. But
he must see that the cardinal feature of the
situation, q feature as transient as it is i'm
portant, is the present loss of confidence in
railroad securities.
We can make this very plain with little
explanation. 1t is necessity for capitalists
to invest their money. They prefer large
return if they can feel secure in get
ting it, but moderate interest with
safety and disposability appeals more
strongly to this conservative instinct.
At present no investments are considered
as more absolutely safe than the bonds Of
the United States, and few are thought more
hazardous than the railroad securities Of
this country, which have heretofore been a
favorite investment Of European capital.
Now, the point for Secretary Sherman to
perceive and act upon is that the flow Of
foreign capital into American railway stocks
is arrested and blocked, and that while the
stream is effsctually damned up in that di-
rection it can be easily diverted into the safe
channel of our government bonds. If
he does not realize this he is conspicu-
ously unequal to his position. If he is
sagacious enough, courageous enough and
prompt enough he can refund the whole
amount of the remaining six per cent bonds
into bonds bearing low rate Of interest by
taking advantage of the distrust which has
lately fallen on other classes of securities.
Not only has confidence in American rail-
way bonds, but in all kinds of South
American bonds in Turkish bonds, in
Egyptian bonds, and in various securities
which have of late years absorbed vast
amounts of English capital, been shaken
and Frustrated. With the prospect of
a great European war imminent tho securi-
ties of the most solid governments of the
| Continent cannot be deemed very attractive