The New Orleans daily Democrat. [volume] (New Orleans, La.) 1877-1880, 1878-03-09
THE NEW ORLEANS PACIFIC Rail-
Road SUBSIDY.
No ..

cred as paying enterprises. or not, according
10 the amounts expended In their constiue
lion. IN other words, cash was a. essential
element in considering whether they were
profitable enterprise tp those who embarked
their means in them
The question then occurs, what is The limit
s,f ,nst Mt which an enterprise caaans 10 he
urs,iitable2 The answer iH obvious; when the
antareet IA the Investment IL less than II the
same amount were embarked ~ othef uhhei
tahipss ur when ii is less than the current IN
tnfnst Ut money which FURNISHES the means
Invested in the enterprise
III ~ Il logical inference that the New Or,
leans Pacific road will pot yield an interest
on the money invested In i e1ulyaent y"
what ii would If used in other enterprises.
or. In other words. equal to the ordinary ihle
of interest obiai,iahle for capital ~ L9nisi-
ana bera,isr If II would, there would be no
occasion tn make forced loans OF beg leglsia-
tive assistance 10 build 1t, as capital would,
In obedience to a natural law, bow INTO y
spontaneously aa ptoiitahie Investment
Therefore ii may be assumed that IT will not
he profitable Investment tn the stock
holders but ! believe that It is not claimed
for this road hv its advocates That II will
yield renunerative Interest to The stock
holders. but that. notwithstanding. IT. Will be
nj, immense nirnntdpe ~ ne community ~ ~
collateral aud indirect influence ~ pfon.otmG
jHsinPaa.
Nov this ia d fallacv and n most dangerous
Fallaey. ~ no enterprise can re beneficial "
thp community which establishes it, unless 1t
Yields an interest to those who embarked IN
a. equivalent to what the same amount would
bring II otherwise invested. II the Interest
Is less than the same amount would bring "
otherwise invested. then the enterprise. tn
the cum Of the difference. is n direct loss to
The community. and M indirect advantages
ran compensate for this loss, This is a law,
sejurihle from the primary and fundamental
principles Of political economy that
noble seieiine-ot more practical value
~ mankind than All others which
eonside,s all questions having any relation
,lf,tt. iisf
button of wealth., IN short, that science
which considers all causes which renders
communities prosperous OF the reverse. me
wealth Of a community a the gum Of the
wealth of the individuals who compose 1t, and
every industrial entetprisn which increases
The wealth If the individuals who conduct 1t
is to that extent benefit to the whole com
mnnity. while. On the contrary. every indus
trial undertaking unptutitahn 10 those who
embark IN II is to the same extent a loss to
The whole community.
These views have been maintained Ivy me
for years as obvious truths but am aware
they do not meet with general approval. |
shall, therefore, IN confederation quote the
.licta OF men whom the world regards az
authorities on this and kindred subjects.
The Hon David A. Wells, the most eminent
economist In America, u man OF profound in |
tellect and great eruditinn. who enjoys a |
European reputation, says Of railroads; IF |
IA community using n railroad which will l,ot |
afford sufficient business t. pay a mir intS |
est On the capital invested and provide a fund |
against depreciation. it seems clear that the |
community does not need the railroad and
that from a pecunialy point Of view it ought
mot to have been built
Prof. w. q. Sumner the distinguished pro-
fesspr Of political economy nj Yale College |
does not consider the question as worthy OF
argument hut remarks In regard to the levyins
of a tax TO build this road ut brings before
,a another instance Of the grand deuaiun Of |
the community. that the community can
create capital hpvoting or can do anything by
law except to transfer property from all 10
one.
Mr. Chae Rpemein. one Of tho most pro
found thinkers and learned economists in the
Ncet, author Of that excellent work Politics
N, o Science, says, comparing or railroad
Hsthunn with etniiIaf ones OF Cincinnati |
"Ihe whole thing il only one specimen of
public stupidity. that Ia, ever looking round
tur. something that will benefit them largely
mud cost nothing. Thenawspapers served the
hemagugues In manufacturing public opinion
10 order, and they did 1t by holding up to
their sight imaginary benefits to accrue from
this road, II was represented as tho only
thing that would save Cincinnati from ruin
Although writing OF the Cincinnati folly he
almost Seems 10 refer to our experience. he
continues TO show nj considerable length The
evils inflicted on his city by expensive rail
road enterprisna Ivy which heavy taxes have
been imposed. to the consequent ruin of bust
ness and Of all reasonable hopes Of prosperity
But the authority tile most drrpt aud con
elusive is that pre-enlinently profound think
or and logical reasoner, Herbert Spencer. who
says IN hia essay on Railway Morals and
Railway Policy" page 400, when describing
this subject "stl more doubtful becomes
the alleged benefit accrung from railroads
that cause y loss to shareholders when. from
considering the question IA ono of traffic we
turn to consider It IA n general commercial
question n question of political economy
Were there no facts showing that the tray
niing facilities gained were couutrrhalanccd
by the travelling facilities lost. we should
still contend that tho making OF railways
which dc not return fair dividends is ma
Annal evil and not national good |
The prevalent error committed In studying
matters OF thte nature consists in looking at
them separately, rather than in connection
with other social wants and social benefits
Not only does one Of these undertakings
when executed affect society In various wnva
but the effort put forth in the exovu
ton OF it affects society in various WAYS
and To form a true estimate tho two sets Of
results must he compared Tho axiom that
action and reaction arc equal and in nnpositn
directions ia true, not only in mechanics il ia
true ever ywhere. o
No power can he put forth by a nation tai
achtevn given end without producing for tho
time being, u corresponding inability tn
achieve some other end. No amount Of rati
fal can bn distracted for one purpose without
involving al equivalent lack OF capital for
another purpose. Every advantage wrought
out bN labor Il purchased by tho relinuush-
ment OF some alternative advantage which
that labor might else have wrought out. In
Judging. therefore, of the benefits flowing from
any public undertaking il Is requisite t. con
aider them not Ivy themselves. but rs CON
1rasted with the benefits which the invested
capital would otherwise have secured.
hut how can the relative benefits be meas
nred2 II may he asked Very simply. Tho
rate OF interest which the capital will bring
g thus respectively, applied is the measure,
Money which, If used for specific end. gives
smaller return than II would give II other
wise uscd. IL used disadvantAgcously not
81. only e II possossnr hut 10 the community.
This is a corollary from Tho commonrst HIN.
ciplN OF political economy"
Although the subject is by no means cx-
haustod, yet have dono. If ! have cXhih-
ited zeal in this matter il Is from a conscion-
tous conviction that the advocates of ina
construction of this i,Aaa hN H., ,,,,n.,- -. |