Omaha daily bee., 1883-07-02
The Prussian Railroads.

The Prussian Railroads.
A Berlin dispatch states that the Gov
eminent Prussian) has resolved to pur-
chase six railroads, at a cost Of $50, 600, 900
marks. Estimating the mark ut 25 cents,
this is equal to kS1, ESQ, 900 Of our money.
For n 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 g the State owned 8, 1855 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 1885 miles then under
construction, but not in operation, the
State owned $50 miles and managed 200
other miles, while corporations owned and
managed 1856 miles. The average cost Of
all the Prussian railways was $l05, 715 per
mile. At this rate the recent purchase will
give the State 788 more miles Of road and
take that much out of the hand Of the cor
po%rations. 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
a railroad pays a corporation it should also
pay the State, the only doubt about it being
whether a 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 a good many years experience.
In 1876 very nearly one-fourth Of oil 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 thar 1871, 900, 600.
The advantage Of the State as the owner
and operator of a railroad over any corpo-
ration is not difficult to explain. In the
first place, the State, if of first-class credit,
linz IluSoluy INnk ullu VI ltc Olllltu tDlulCo
can borrow money to purchase a railroad at
from 3 to So per cent. The strongest cor
, poration must pay from 5 to @ per cent. in
, this country and not less than Az per cent,
, in Europe. The difference will average {
: per cent. in favor Of the State. On an in
vastwant OF Ss1. 600, 600 this makes q year
: ly difference of 81, $40, 600 against the cor
1 poration. If the Government is honest
careful of the rights and interests Of tn,
u people and able to manage the road as wei
as u corporation can, this 81 ,62O, 000.is 81
I much saved to the people. In the next
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
State.
All great railways are built on the credi'
system. The corporation plans a road Of
a system on a probable cost of 800, 600,
600. The money is raised, generally, by
= bonding the road and its properties as thu
= work progresses. The bonds usually rur
g at Q per cent. II they cover as much a
the cost of the road, that amounts to a de.
. duction of 80, 0O0, 900 a year from the earn
4 ings, after paying all operating expenses
Now the Government can do the sam,
amount of construction Oh capital borrow
Z ed at 8 per cent, which gives it the enor
| nous advantage of $3, 900, 900 a year, owe
: the corporation. II the corporation pay
its just taxes, say no more than l per cent.
. the Governments advantage amounts t
"a, 900, 900 a year. All the corporation ar
guments against Government ownership
9 rests on the assumption that 1t would en-
: gender political corruption and add to thu
A too great Increase Of power in the Govern
ment. But it is difficult to see by what
means political corruption could be carriot
: to a greater extent than the corporation
have carried it, and it is certainly better
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
the States agent could not conduct TIT
9 business as well as the corporations. TIT
success of the Prussian system ought to 81
lence this objection. IL the States agen
can mobilize, equip, provision and arm
half n million soldiers for four wears: /
they can conduct the vast and ~intricat,
n postal system over hundreds of thousand
h OF miles OF route, there is no reason h
y think they could not manage any humble
Of miles Of railway as well as the corpora
tons do.
Arthur's Vacation.