Barton County democrat. [volume] (Great Bend, Kan.) 1885-1915, 1891-01-15

products from market to market, while
the telegraph has virtually madS the
world one vast mart. with instant COM
municatiOn between all its parts
This has maintained for the last fifteen
years an unprecedented steadiness and
uniformity in prices; which, by dimin-
ishing the risks of business, have pro-
portionatly reduced its exposures to
great commercial arrangements.
Hence the late crisis found the trade of
the country in generally healthy con-
dition, and what injury has indirectly
befallen our commerce is due almost
entirely to the disI upton of credit f6om
purely monetary and financial causes.
The chief source Of the recent
troubles has arsiren in connection with
enterprises which adnait of liberal
application of speculative methods; and
among SUCH enterprises the creation o.:
railroads stands foremost. The panics
of 1873 ana 1854 were chiefly due to an
excessive diversion of capital into the
building of railroads. and also to the
fact chat the new companies were
oeganized upon grossly speculative
nnd inflated basis. Within the last ten
years we have had two distinct periods
of Over-construction of railroad In
1879 the United States had 81 1893 miles
of road. in 1884 the mileage had risen
to l25, l52-an increase during the five
years of 40, $50 miles. or 48.3 per cent.
This expansion was about four times
the rate of increase of population dur
that period; which, without further
evidence may be taken as warranting
the conclusion that this tive-year's con-
struction was QUE of all proportion to
the GROWTH of commerce and to the
required increase of transportation
facilities during that time. bad this
immense over construction been assO
ciated with sound methods of capital
ization, the investors might have
afforded to wait a few years. when tire
trade of the country would have grown
up to the measures of che enlarged
carrying capacity, and reasonable re-
turns would be forthcoming. But the
general radlcally-defective state laws
relating to the organization of railrDad
corporations not only permitted the
capital stock to be issued virtually with
out consideration, but also made it pos
sible to issue mortgage bonds without
getting an equivalent In construction.
1t thus came to pass that, whilst the
forty thousand miles of new road were
capitalized and bonded for total OF
about 81, 2,72O, ,O0O the true amount OF
actual capital invested against these
issues was probably considerably less
than half that sum. These were the
conditions that brought about the
crash OF 1884; which not only necess-
tated a sweeping reconstruction of the
new balloon enterprises, but involved
the stock of the older companies in
points, the average best prices in 1883,
to 40, the average lowest prices in 1884.
It would seem that such a notorious
result of speculative enterprise should
have suffered, if not to prevent rep
etitiOn of like extravaganza, yet at
qeast to postpone it until the disgrace
had been forgotten. And yet, following
the collapse of 1884, only one year OF
contraction of construction elapsed.
In 1886 the furore reappeared, and in
that year 5,877 miles of read were built;
in 1857. l4,393 miles; in 1883, 6,277
miles; and in 1889, 6,268 piles-a total
of 32,Sl5 miles within four years. This
increase is at the rate of 257 per cent.
upon the mileage existing Ill 1885.
which is about two and a half times the
rate of the concurrent growth of popu-
lation. 1t will hardly be pretended
that this increase of construction was
justified by corresponding growth of
trade within the period; for that would
be to maintain that the national pro-
ductiVn had progressed at nearly three
times the rate of the national popula-
tIOn-manifestIy an improbable, if not
an impossible, proposition. 1t is true
that the tonnage of the roads showed
even a higher proportional gain. during
these four years. than the mileage; but
it is to be remembered that all the
| transportation connected with the
building of the 32.si5 miles of road is
included in the returns eff tonnage.
1t is something in favor of the over
construction of the last four years that
it has not run to the same degree of ex-
cess as was reached in that period from
1880 to 1884, inclusive; but that plea is
more than counterbalanced by the fact
that the second period of excess came
80 Immediately on the heels of the pre-
vious one as to leave no interval for
| the repair of the crash of 1854 and for
the distribution of the mass of secur-
tiles issued previously to that culmii.a-
tion. Virtually. indeed, the two peri
DDS of excessive railroading run into
each other and constitute one prOionr-