Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1883-09-01
TIE BUSINESS 81 -uArIoN AaAIs.

TEE BUSINESS 81 UAFIoN AGAIg.
Concerning the worn and favorite theme
of the timid and disaster predicting press
the question of over railroad building
the Chicago Inter. Ocean very sensibly re-
marks relative to the IL, 500 miles of track
constructed last year : The only CONVEX
sion that has taken place is conversion of
labor into railway track. If the labor
which built the track would have been
wholly unemployed in case it had not been
employed on that work, then the SECRETARY
body has made a net gain of the railway
track, as compared with the condition it
would have been in had the capitalist not
bought the construction bonds" That is
a concise statement of the question. No
matter how much railroad is built, labor is
benefited. The panic that may come from
excessive issue Of bonds, the doubts and dis.
trust engendered by the issue of securities
in excess of the sum actually outlaid in
constructions, affects only class. The
commerce of the country is no longer
heavily involved in such transactions. Let
the building of roads go on, and the con-
struction of lines that will not pay, and
what will be the result? Fears and
panic among those who find their money is
being put where it is not likely to bring
return speedily, or at all. But no circulating
capital has been converted into fixed capital
by the transactions. Every new road adds
to the quantity of circulating capital, for,
as our contemporary again remarks, 1.-THE
shares of the road itself are one of the
freest forms of circulating capital. They
can be exchanged for other property about
as ready as bank bills, can be exported in
the adjustment of our international ex-
change almost as easily as bills drawn
against merchandise, or as Government
bonds, and are convertible into currency at
any instant on the Stock Board" Unprof-
liable railroad building begets want of
confidence, and tends to bring on a panic,
but it happens that, as is the case now,
many railroads whose values show shrink.
age are actually exhibiting an increase over
all former profits. The Chicago, Burling-
ton and Quincy is case in point; tBe
earnings being thirty-fve per cent 10 ex-
cess of last year, it's stock now rates fifteen
per cent less. The New York, Lake Erie
and Western, reporting decline in earn
ings shows shrinkage in stock values no
greater than that found in the case of the
most profitable Western or New Y ork roads.
The question of over production of rail-
roads has therefore little now to do
with the decline Of values Railway pros.
poets are just as good as those of any
other business in the country, and
the journal quoted concludes, in
common with the Boston advertiser, the
New York Post and other Eastern journals
within the atmosphere of the recent furry
of the street, that the railway system of
the country has before it the coming year
vast deal of business, and the heaviest
handling > it has yet attempted that
the allegation that non-paying roads have
been built is not sustained as to any roads
the stock of which is in the hands of the
public that instead of there being lack
of circulating capital, money has been
greater drug in the market than railroad
securities that while the latter could be
sold, even at reduced prices, the former
could not be got out upon loan at per
cent. right in the midst of the period of
decline in values; that no stakeholder
even began to suffer SO severely as the
holder of uninvested money the volume
of the currency comprises 81 600, 600 600
of money, one.half coin, and two thirds of
that coin gold. So we have had this
anomalous condition of affairs distrust,
partial panic and falling market, and
at the same time fairly good current of
business moving on. But the Chicago
journal stops short of all the causes of the
recent furry" There are other matters
of which it might have spoken vital to the
subject. There has not been excessive spec
ulation, expsnsionof commercial credits nor
imitation of prices. This the most ordinary
observer must have noted. On the contra
ny, as we have heretofore remarked, prices
have been phenomenally low, and margins
of profit the narrowest known. These
slender profits have caused some CONNER
cial men to throw securities upon the mar
ket, and this contributed to the result the
country has just witnessed. Add to this
fact the scheming of certain stock specula.
tors inzthat market, and it is easy to be
seen why money goes begging, while securi-
ties go down. 1t is not apparent that there
will be 70. long time any advance in
prices. or any material change In the pres