, 1877-08-04
sgreeklp statesmaa,
About Railroads.

The public debt of the United States IS
g.. 200 .OOO. 900. The railroad debt IS
twice as much. ''Poor's Manual puts It
down at 81, ,468, ,59I ,935. In the business
of building railroads, the United States,
as well as other countries, has discounted
the future. We have anticipated the
wants of the coming generation and leit
the coming generation TO pay. The rap
id increase of railroads, including the
building of competing lines between large
centres of population, has tended to I'M
pair the value of railroad property. The
default in dividends and interest on bonds
has deprived thousands of families OF their
means Of living. The total amount OF
bonds, stocks and other forms OF debt on
which the railroads Of this country have
defaulted is estimated at 81 800, ,OOO,U 900
This is nearly two millions more than the
interest-paying national debt. The inter
est on this 81 800, 900, 900 at five per cent
would be 500, 100000. This latter sum
represents a yearly loss of income. There
is 10 be added to this heavy loss IN the
decreased dividends paid by dividend
paying roads,
OF course, a portion of the valuation OF
the country does not represent money act
ually paid in. The process OF watering
stock has been carried on largely; but a
good deal Of this watered stock has been
sold for cash. To purchasers 1t became
property precisely the same as original
shares. The struggle of the past two or
three years has been, on large portion
of the roads, TO meet current expenses
The falling off III business intensified COM
petition, until III some cases rates OF ton
mage and freights were placed SO low that
business was done at loss Under this
circumstance labOrers were made 10 share
in the work of retrenchment. Capital,
which had only given labor'a living share
of profits in flush times, asked labor 70
share losses in dull times. The bond
holder, who failed to receive interest on
his bonds, and the stakeholder, who Nc
longer received dividends on his watered
stock, united in demanding that the Ia
borer, who had never been paid for day
work he did not perform, should work al
reduced rates This is a common mistake
of capital, and viii probably be repeated
until the end of time. When profits art
large. capital takes all as its proper share.
When profits are reduced, the first i'm.
pulse is to reduce expenses, the principal
item of which is labor. In spite of the
depression in the railroad business last
year the number of miles OF new road
opened was 1856, against /, 9l9 miles IL
1875 and 1,911 in 1874. This large III
crease is not justified by the condition oi
business or the increase in population. In
the lasl ten years railroads have increased
four times as fast as the population There
is a mile of railroad in the Western State:
for every Az inhabitants. The manager!
of the great lines which compete witt
each other are now engaged III hfe-to
death struggle for existence. They sad
died themselves with debts in flush times
when earnings were large, interest OF
which must now be paid to preserve then
credit. The Baltimore and Ohio, whicl
has the reputation of being one OF th'
most prudently managed roads IN th'
country, has for two or three years pas
been constant borrower. 1t is stateC
that a recent effort made to borrow 50,
100000 in Europe to tide over the pres
ent depression, failed on account of tn
nature of the security. The company
were already so heavily in debt that cap
italists declined further advances, thougl
money was plenty at four or FIVE per cent
The present difficulties in the East grey
out of an attempt on the part OF the man
agcment to reduce the running expense
OF the road.