The Saline County journal. [volume] (Salina, Kan.) 1871-1893, 1886-01-07

I rlA-s
As the traffic Increases the rate de-
clines. Such has been the case In the
past. For Instance, the rate per ton
per mile ON the Aiehison road In lsT4
was % cents; IN 1854 aud 1855, I So,
a reduction Of one half This has
been brought around gradually by in
crease Of traffic.
A wholesale dealer whose annual
sales amount 90 81 600 600 will make
an aggregate profit Of So, 900 upon q
margin Of five per cent, while 3 retail
dealer whose sales amount TO 500 900
will net upon the same margin but
5000. And II rents, interest and
other fixed charges upon the business
should be the same rs to each, and
form y considerable item, as IL the
with all railroads. the retail dealer
would sOOu ind his margin disappear
and himself swept ia 20 bankruptcy.
In discussing the rights Of STOCK
holders Mr.. Collins observes: There
are several propositions whose truth
/ believe 10 be self-evident, which
ought TO be applied 70 this discussion.
| First-A railroad company ought 20
receive q net profit equal 10 q fair rate
OF interest on the cash judieiOusly IN
vested by the company. Seeond-A
railroad company Is not entitled 10 an
income on the investment Of other
people. Third-The stock Of a rail
road company taken az the price re-
ceived by the company for Il should
| represent the cash investment Of the
company. FOurth-The bonds OF the
/ company represent the mOuey Dor
rowed by the company and for which
the company is In debt"
These propositions are followed by
I an elaborate discussion Of the waste,
reek lessness and frauds connected
| with the construction OF the Pacific
railroads; all of which is true enough,
and las become q familiar and melan-
/ eholy part of the history Of the cOun-
| try; but IN the present aspect Of
things II does not materially effect the
/ producer or shipper. IL the Pacific
/ road was in a situation, where IL
could levy arbitrary rates upon the
| busiHess it did. the amount Of its
stock Issues would possess a material
concern for the shipper or producer, |
but it Is not. lt Is paralleled by |
! other railroads on bOtn sides Of it, /
built subsequently,, aud HpOn a much /
cheaper scale, and the Pacific road is /
compelled 10 accept tine rates which /
via suffice 10 maintain these, and /
this must do WHETHER ia the STRUGGLED /
shall survive or perish. Besides, n "A
railroad company Is unable 20 earn +
enough money from It's business 10 4
puy dividends upon It's stock, which \
seems 10 be the ease with the Pacific I
road at the present Time, IL can make
no difference 90 the producer or ship
per whether lis stock Is 81 OH, 900 OF
Sj1. OU0,OO0
Recurring Ia the four propositions
above it may he remarked that their
self-eyidenJ character can best be seen
upon paper, hut would presently van
ish II uu attempt Was made 20 build /
railroads upOn the faith Ol them.
They are true only As n those forms
Of Investment ia public securities for
example, the interest and principal
being assured Ia the investor without
trouble or concern on his part. In all
active business enterprises something
more than "a profit equal to a fair
rate Of interest on the cash judiciOus-
~ invested" is expected TO cOmpen-
safe for the risks, uncertainties and
vicissitudes Of the business. This il
especially true Of railroad invest
meuts. since these are recognized a.
the most uncertain aud hazardous al
all forms OF investment offered 10 the
public.
II Is quite impossible to fOresee
what will be the outcome Of any pro
jected railroad enterprises, whether II
will prove profitable or the reverse, or
whether those who embark their cap
ital ia il, will get il back or the inter
est on it. fit should turn out IN
profitable the money invested in the
enterprise cannot be- Withdrawn and
turned to more profitable account Ia
some other form Of investment. II Is
planted permanently IN the railroad.
Even II IL should succeed and the in
yestment become a paying one, the
road may be paralleled by other lines,
its business be divived and the value
Of the investment become impaired or
destroyed by rendering the operation
OF the road " prOfitable. Within the
past five years a great many million
OF dollars Of railroad securities have
been rendered worthless from this
last source alone In the United states.
The legitimate eOst Of q railroad
Il not represented By the actual cash
put into t., but the amount of
securities IL has been necessary to
part with to obtain the cash
with which tn build it. The only re-
sources open TO n railroad company 10
raise money with which 20 build its
road II the sale OF its stock OF bonds
or both. Those who advance their
money on the faith Of this class Of
SECURITIES know that they incur ell
the uncertainties and hazards
named above, and the others which
eaunOt be fOrseen. The less promis-
ing the project appears 70 be, the less
will the securities command In the
market, and the cost Of the road will
be enhanced in proportion to the de-
probation Of the securities. These
are the conditions upon which rail-
roads have been built in the past, aud
the only conditions upon which they |
can be built IN the future, aud for tie
sufficient reason that the elements of
uncertainty aud risk can never be
eliminated from the business.
II Is therefore a practical maxim
with all prudent men who invest |
money in hazardous enterprises 10 de-
uand c0mpensuting advantages 10
cover If possible the chances % loss
These chances are, II course, specula
tive and Will not admit of being r.
duced To the equivalent 81 self evident |
propositions on paper.
Then again these Investments being
attended with more than ordinary |
risks, a. rule men are rot willing 90 !
hazard a large amount % individual |
capital iu them, they absorb cOmp1ra-
lively siuall sums from numerous per-
sons scattered over tine country and
residing abroad. The great mass oi
thu-e whose small sums are invested
in railway shares have no direct voice
in the management 81 the properly.
It may or may not be honestly AID
judiciOusly managed. IL not, their
Interests will suffer. The temptation
10 use this species Of property ior
speculative purposes, In which use
the Interests Of the share holders are
lost sight Of, IL greater than surrounds
any other. Aud this Il another ele-
msnt Of uncertainty and risk which
Is considered Ia making this class Of
investments
Aside fFom,ihese views presented
in this argument submitted 10 the
board, which We have commented on,
there are matters stated that deserve
serious consideration, and they are By
no means free from difficulty.
Il h shown that at present prices Of
grain there y little or no margin o.
profit for the producer. It can hard
Isl Be expected that the present low
prices will long continue. Ihe large