The Kinsley graphic. [volume] (Kinsley, Kan.) 1890-1940, 1891-12-11

is practicable and reasonably safe of
Accomplishments
1t lbs been widely stated that il /
would require SI4 coo. GOO. GOO TO pur l
chase tlte roads of the United States.
and that FOR this reason alone IT Was (
Impossible. Let us figure little.
There are in the United States IGG,- /
sI7 miles OF railroads. capitalized al /
81, $50 QUO, OJO iu round number and I
having in addition To the capital stock |
above stated. a funded debt OF $, 600, /
600 goo. and floating debt of $780,.
600, OGO. These roads own in addition [
TO the railroad Investment proper, other 7
assets, consisting OF real estate, city
and other bonds, etc, amounting To
81 500 ,OO0 900.
It is conceded that if tine govern
and sale, or by condemnation and
indemnity by tile right of eminent
domain, it must pay what they are
worth. So the question of first inn
portance is to ascertain what these
roads are worth and what it would
cost to consuzlmate this enormous
transaction, These roads cost, as
show by their books, IS, 200, 900, 600.
With the wasteful methods pursued
in building them, the theft and pecu-
Iatiou that entered into every mile
that was built, and the immense
reduction in price of ali kinds of rail
way equipment since they were built,
it Will be conceded that they could be
bu!It to-day for a much less sum,
( probably one-third less. But there is
another element of value that must
not be overlooked in considering The
| amount to be paid, that IS their earn
ing capncity, or ability to pay divi-
bends. This furnishes a safer and
more just measure of compensation
than the cost or present value OF the
roads, based upon the sum that they
could be built for to-day. The market
value of such an investment is based
on and has a close relation to the
amount of profit it is capable Of max
Ing each year. In this view the
market value of the road is first; its
debt, which is a first lien upon the
first paid out of them, and then the
market value of its capital stock,
which represents the equity belonging
to the stockholders after deducting
the funded or mortgaged debt and its
floating or unsecured debt. If the
government should purchase to-day
every railroad in the country it would
not have to pay dollar Of their funded
debt of S.. 600 600 600 That would
be carried as it is now in the shape Of
bonds running for long period. The
amount that must be paid at once
would be the present market value OF
the capital stock, (Which represents tho
real interest Of the owners or stock
holLers). and its floating debt. OF all
the vast number of the railroad stock.
Of the county, less than thirty have a
mark value, that is quoted from day
to day These Of course incIude al
the arge lines and the buik of tile
railroad securities. OF these ore
half are worth less than fifty cents Oh
the dollar, and only two OF three are
worth more than par. Those moi
D
receiver for the benefit of the bond
holders or else earning no dividends
Many of the largest lines of the coun
try are worth less than fifty cents OF
the dollar-the Santa Fe, forty three
Erie, thirty; Northern Pacific, twenty
four; . 6 M, twenty one; Oregon
sixteen; Reading, thirty-seven; Texa,
Pacific, eleven; Union Pacific, forty
An accurate statement of the tota
masket value of these stocks cannO
be given here, but certainly it wouIC
be a safe estimate to say that on tht
average the market value of all thes,
stocks is less than fifty cents on the
dollar. Admitting that it would bj
fifty, 1t would then cost to absorb the
total capital of all these roads s., 800,
900, 900. This would carry with 1t tlH
complete and absolute ownership of al
the roads in the country. The govern
ment then being the owner must pa.
the floating debt of the various proper
ties so acquired, which would requir
the further sum of $3.50, 600, 600, maj.
ing a total of 81, 97O, 900, 600. Agains
, TINS sum ana aNaLdDlo 70 make TN
payment it would have tie oLhe
assets of these companies of 81 800,
coo, 900 before referred to, aud fot
which the government would hay
30 use which, deducted from In
COST of the stock and payment Of Tia
floating aebt would leave net sum t.
be expended in such purchase and pay
90 81 o-o nnn mn
I HHHT7T7T - - TET'VE7VT III fAAAN+A sAA
bonds Of the government would have
TO be issued, bearing interest at p pc
cent. This would, OF course, greatl
increase the public debt, but the earn
Z ings of the road would not only pa.
the interest charge, provide a sinking
fund that would extinguish the enun
debt Of the roads and the debt inc ARE,
{ in their purchase in fifty years, bu
would in addition effect a saving o