Omaha daily bee., 1883-03-28
ON THE RIGHT A

ON THE RIGHT TRACK
When the New York legislature
found Itself banked In Its effort to
reduce the elevated railroad fares to
FIVE cents, by the veto Of Governor
Cleveland, lanother step was taken
to bring the great monopoly to time.
There Is Q law on the New York
statute books empowering the legisla.
ture to make changes In the charters
of any railroad companies where the
net income exceeds 10 per cent on the
capital actually invested. If It could
be shown that the net income OF the
elevated roads was more than 10 per
cent on the capital Invested, the leg
islature could amend the charter that
authorized ten cents fares without
touching on what the monopoly at
torneys call "vested rights"
Two weeks ago che New York Ter.
ate passed a resolution requesting the
state engineer, Silas Seymour to fur.
nlsh information as to the real cost of
the elevated roads.
Mr.. Seymour made a report that
shows him to be as useful a tool of the
elevated railroad syndicate as he was
fifteen years ago of the Credit Mobilier
ring when he acted as consulting en-
gineer of the Union Pacific. He made
q report In which he took the ground
that the actual outlay must be com.
puted by the amount of capital stock
and bonds issued BY the company.
His opinion rests on the proposition
that 1t is the common practice of rail.
way corporations, both In his state
and the United States, to charge the
losses of discount on their securities
to the cost Of construction, equipment
and other necessary expenditures, and
there appears to be no valid reason
why these elevated railway companies
should be inhibited from pursuing the
same course.
Such a plea could only emanate
from q railroad attorney. 1t enunci.
ates the dangerous doctrine that the
public must submit to q tax for the
use Of public highways based
upon fictitious values. A rail.
road company may Issue stock
1t q nominal value of ten cents on the
dollar. They oontracts with a con.
struction company composed of an In
side ring of railroad directors at an
extravagantly high price and divide
the stock among them. They will
then bond the road as fast as q
section of 1t Is constructed at
t%wo.thirds If Its real value.
And then the sum total of stocks aud
bonds L. to be taken as the actual In
'estment, upon which the patrons Of
the road are to be taxed to pay inter.
est and dividends. This 10 nothing
more nor less than legalizsd robbery.
And when the railroad kings insist
upon . fair return on millions upon
millions Of fictitious capital, they are
no better than the masked road SCENTS
who board their trains and compel its
passengers to give up their purses and
watches.
The people Of New York have allow.
cd the elevated roads to occupy and
obstruct their streets. The owners of
property on these INSTRUCTED streets
have sustained millions of damages
without receiving any other return
than the benefits derived by the gen.
eral public from rapid transit. They
would oheerfully allow the owners Of
the railroad to earn fair interest on
their actual Investment, but to quad.
ripple the real cost and demand tina,
the people shall pay dividends ON the
Inflated figures Is taking an ell where
only an inch Is intended to be allowed.
The railroad question will never be
settled until this evil Is corrected, and
. just system of capitalization and
profit 10 established. The New York
law with respect to actual cost, as In.
terpreted. by State Engineer Seymour,
means absolutely nothing at all. His
"opinion" Is perfectly ridiculous to
any n who knows how railroads are
built In these days.
The New York legislature Is on the
light track, and 1t is to be hoped tina,
1t will be able to secure q fair ap.
praisement Of the vslue of the
property It has under confederation
and act accordingly. II 1t can deal
with the matter justly, and wiring the
water out of the elevated roads o,
compel them to regulate their charge,
ON the basis of real cost, they will 90,
tablish . precedent that must soone,
or later be followed In every state o.
the Union.
THERE was q sound Of revelry OF