Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1883-07-02
The Prussian Railroads.

The Prussian Railroads.
A Berlin dispatch states that the Gov
ernment Prussian) has resolved to pur-
chase six railroads, at cost Of 350, ,00O, 900
marks. Estimating the mark at 25 cents,
this is equal to kS1, ,250, 900 Of our money.
For good many years Prussia has steadily
pursued the policy of absorbing the rail
ways within her dominion owned by corpo-
rations. OF all the lines open to traffic
five years ago the State owned 8, 1856 miles,
against 5,S94 miles owned and operated
by corporations. There were 2,155 other
miles owned by corporations but under
State administration. The State had then
nearly one-half of the railroads under its
control. OF the l,235 miles then under
construction, but not in operation, the
State owrrd $50 miles and managed 200
other miles, while corporations owned and
managed sS5 miles. The average cost Of
all the Prussian railways was $l05, 715 per
mile. At this rate the recent purchase will
give the State 7S8 more miles Of road and
take that much out of the hand Of the cor
porations. 1t will give the State, together
with the roads it controls but does not yet
absolutely own, the management Of more
than half the Prussian railway system. II
railroad pays a corporation it should also
pay the State, the only doubt about it being
whether Government can as well manage,
and as cheaply, the business as the corpo-
ration can. That Prussia loses nothing by
her investment in railroads is clear, from
the fact that she is still purchasing more of
them, after good many years experience.
In 1876 very nearly one-fourth Of all the
national revenues came from Government
railways. or course there were expendi-
lures for operating the roads and keeping
them in repairs to he reduced from the
gross proceeds but if there had been no
profit we should not have heard of this last
investment of more than $s1, 100000.
! The advantage of the State as the owner
and operator of railroad over any corpo-
ration is not difficult to explain. In the
first place, the State, if of first-class credit,
I,
can borrow money to purchase a railroad at
from 3 to 81 per cent. The strongest cor
, poration must pay from to @ per cent. in
this country and not less than Al per cent
, in Europe. The difference will average {
per cent. in favor of the State. On an in
vast,rant OF Ss1 900, 600. this makes q year
: ly differance of 81 ,620, 600 against the cor
1 poration. If the Government is honest
a careful of the rights and interests Of tn,
people and able to manage the road as wei
as corporation can, this 81 ,620, 000.is 81
I much saved to the people. In the next
5 place the Government road is not taxed
while the corporation road is. The tax OF
corporation railways in Prussia amounted
to more than 81, 100000 in 1878. Thes'
, two points conceded, as they surely mus
be, it follows that the State, as the owner
g and operator of the railways can Away
afford lower rates of transportation thar
any corporation in competition with thu
n State.
All great railways are built on the credi
system. The corporation plans road o
system on probable cost of 100000,
600. The money is raised, generally, by
}, bonding the road and its properties as th'
y work progresses. The bonds usually rur
@ at per cent. II they cover as much a
the cost of the road, that amounts to de.
N duction of 80, 600, 900 a year from the earn
4 ings, after paying all operating expenses
:, Now the Government can do the sam,
amount of construction on capital borrow
ed at per cent, which gives it the enor
! nous advantage Of $3, ,O0O, 900 year, ovel
: the corporation. II the corporation pay
its Just taxes, say no more than per cent
. the Governments advantage amounts t
a, 600, 900 year. All the corporation ar
!. guments against Government ownership
Q rests on the assumption that 1t would en-
gender political corruption and add to thu
A too great increase Of power in the Govern
y ment. But it is difficult to see by wha
means political corruption could be carriot
: = to greater extent than the corporation
have carried it, and it is certainly bette
: that power should be lodged in the Govern
!, ment of the State than in the corporations
In this country we sometimes have ont
e other objection to State ownership-tha
p the States agent could not conduct th'
9 business as well as the corporations. Th'
!. success of the Prussian system ought to 81
: lence this objection. If the States agen
4 can mobilize, equip, provision and arm
n half n million soldiers for four wears: i
they can conduct the vast and intricat,
n postal system over hundreds of thousand
h Of miles OF route, there is no reason h
J, think they could not manage any numbe
y Of miles Of railway as well as the corpora
tons do.
Arthur's Vacation.