The Forrest City times., 1891-09-04
PROTECTION WATERS IT
RAILROAD CHARGES INCREASED
 BY THE TARIFF.
Protsction's Cheek-The Useless Wool Tar in-Profits in Foreign Trade-Bamilton VI. McKinley-A Point About Needles Reform Notes.
Wateresl by Protection

Ouf iuTmeTS very Justly complain that railroads are very often capitalized at much moro than their actual value. and then proceed to charge freight rates nigh enough to earn dividends upon their watered stock. This com plaint is, tn many cases, only too well toInded yet the men who make it often overlook the fact that they themselves have a very deep pecuniary interest in cheap ening the legitimate expenses of rail road building and ,pment
 Even railroad |. onestly capitalized At it's actual cost has to earn dividend upon a much larger capital than woul ] Do otherwise necessary, owing to tho artificial values caused by the protective tarih. There are some farmers who Fancy that the price of steel rails, for example, is no concern of theirs But they must see that 1t does concern them, since whatever increases the cost of making railroad becomes an element in nx'rg freight and passenger charges. : The New York Commercial Bulletin, one Of the highest authorities in business matters has recently said. "When it is considered that the materials and labor required in the construction and operat- Ing of our roads are increased in cost on an average probably y fully 30. per cent through the operation of the protective policy, it will be seen that our transpor- tation is costing us some S3o5, 900, GOO per annum more than 1t need" and it went on: ~that (S3a5, GOO, 000l needless tax has to be paid out of our products and labor, and thereby becomes an embargo upon our whole commerce and industry. and an obstruction to our competition for the commerce of the world
 A spondent having askei for fur ther explanation or this, tho Bulieti,, answered in part follows:
 -In applying this go per cent. ratio to the enhancement of the cost of railroat construction and transportation, we aimed to be large y within the truth, a. will app ar from the fact that for tho years io65, 1875, 1880, and lss5 the duty on iron rails averaged 10 per cent, and home made rails must have ranged above foreign prices approximately in about that ratio For the period between 1863 and ls9o-the epoch of high duties-the cost of railroad constructed, as it Is ex- 'epressed in tho stocks and debts of tho companies, has amountsd to $500 millions; and, therefore, taking the en- hancement of cost of construction at only 30 per cent. we have during that period incorporated into our railroad system no less than 9,55o millions of virtually fictitious capital. or nearly double the present amount of tho nation . s6 debt; upon which the roads, not being z responsible for this artificial increase of their outlay, demand with some show or right that they must be allowed to carn interest Allowing them only 1 per cent on this compulsory imitation, i: follows that the protective policy is now forcing npon the railroads a necessi ty for exacting from tho public, for capital account alone, sl0s, s,o1o, 900 per annum moro than would have been required in tho absence of that policy. This tom was embraced in the aggregate of S32a. 100000 given In our remarks of the 18th inst based on the fact that every item among which the i.0so millions of cur rcnt gross earnings Is dishursed has bean directly or indlre tiy subject to the in- fatlng effect of the tariT
 We hardly know how to make it plainer to our correspondents than We already have how this artificial increase of the cost of rail transportation has to Do paid out of our products and labor What else is there but products and labor to provide the means of paying for transportation service? The cost ot prb1tlUu nAs to Do added to the cost of labor and products, thereby on. hancing the price of both and so far as there is any artificial augmentation of this clement Of cost thero is clearly so .puch abnormal embargo upon both our Industries and our trade; which must be an obstruction to our competing with nations which are less subject to tariff impediments
 
 And just hero lies the fundaman nta , blunder, tho fatal weakness, of protec- ton. Whatever producers may be sup posed to gain through the tariff raising prices they cannot but lose through a corresponding increase in the cost of labor. plant, materials, management and oil other outlays, and the result of tho artiica, contrivance is simply nil For tho device diverts large amount of cap. ital and labor from pursuits for which we have the best facilities to those for which we have tho worst aud the net result is waste of productive power and failure to turn the national re. source Into tho most natural current and 60 the best accoune Protection is sim. ply an attempt to subyert and counter. act natural laws; and as such it can never benefit the industry at large of any country, although 1t may bc so contrived as to hclp some interests to tho core. spending detriment of others"