The New York herald., 1878-08-26
Tn. M.t.ep ali..n Railway Bonds.

men Of whom a rough Californian said that
they "bite off more than they can chew.
No government was ever SO generous
toward any class of citizens as the Congress
and Legislatures of the United States have
been toward those to whom grants OF land or
special privileges have been given to In
duce them to build railroads, and We have
created in the last twenty years consider
able number of vested interests which have
been not used, but abused to the injury OF
the people.
| Nor is this all. In the old times in Eng
! land it was the fashion to make large and
important grants to individuals and COM
panies, but they were given only for service
performed for the State or the King; but in
this country those who have received such
tavors had not given any service to the
State, and yet they act very often as though
they had earned the gratitude of the pub
lie and were entitled, as rewards for
meritorious service, TO the special privi-
leges they hold and misuse.
The latest instance of this gross abuse Of
the public confidence and generosity we
find in quarter where we least expected
tin the management of the Metropolitan
Elevated Railroad. Rapid transit was long
felt to be necessity to the growth and de-
velopment of New York the press and the
people demanded it, and forced the Legis-
lature to grant a charter sufficiently liberal
to q company of capitalists in whose good
faith everybody had confidence They re-
| ceved in fact q grant or concession, free
| of cost of the most valuable kind. They
| were given the right of way through
some of the most important streets
of the city they received q privilege
worth, as everybody knows, millions Of
dollars, and were required to pay nothing.
All that was expected and required by the
public was that the company should COM
plete their whole road as rapidly rs pos
| sible; that they should build it honestly
and at actual cost; and that the rates of fare
should be low. It is because the right of
way through the streets Of the city was made
tree gift to the company that they are
able to build and equip the road for,
as is reported, the moderate sum of three
hundred and fifty thousand dollars per
twenty miles, The citizens had reason to
congratulate themselves on this low cost,
because it ought to insure very low
fares, and low fares are vitality important
for the welfare of the city Five cents for
the passage was what the citizens expected
as the rate of fare; but with honest con-
struction and careful management it was
- ov,I
Communication fnre for the whole length Of
the road at four cents might fairly be ex-
pected.
Compare now these reasonable expecta-
tions of the people of New York with the
actual performance Of the company:
l. 1t has not completed the road. but
has built only that pert which runs through
the most crowded part OF the city, thus vio-
latng the very object which the people
had in view in granting so enormously val
liable charter.
H. 1t charges ten cents instead of five cents,
count the lower charge Of five cents during
an hour or two in the early morning and
evening as nothing but a sham.
III. Before the road is more than a third
completed we find the managers issuing
bonds, not upon the part which is working,
but upon the whole line; creating q debt,
therefore, not upon material and work they
have furnished, but upon the bare grant of
the city to them, for great part Of which
they have not yet made an offer to perform
the stipulated service.
| Nv. But this is not oil. If they had
lacked capital and had offered to raise
money on their bonds sufficient in amount
to honestly complete the road We should
have thought them shrewd business men,
but we should not have complained. To
borrow money ut six or seven per cent for
ali enterprise which if well managed is sure
to yield fifteen or twenty, is good though
legitimate operation. But this is not what
the unscrupulous financiers of the Metro
poitan road have done. but something in
fnitely worse; something illegitimate,
mschevous to the last degree, and
against which it is necessary to warn
the public. The proper cost Of the
whole road, if honestly completed, is stated
at about seven millions. without COM
pleting it, they have, we are told, borrowed
thirty millions on it. That is to say, they
have saddled the road with debt amount
ing to four times the necessary cost of the
whole enterprise and there is, besides, the
stock which has been issued, over and above Q
this enormous Indebtedness.
We have been slow to speak Of this extra
ordinary piece of fnanciering because wo
have hoped the managers of the company
would give some explanation of their con-
duct to the public. But they remain
silent they do not oven push their line to
completion. They do nothing but borrow
money and charge the people twice as
much fare as they ought.