The great West. [volume] (St. Paul, Minn.) 1889-18??, 1892-11-11


Increase In value by betterments and otherwise
Of railway properties has been such that the
seven billion dollar estimate OF 1888 may be
taken as at least not an overestimate to-day,
then the government would have to increase its
debt by at least that amount II it were to &C
quire the ownership Of the railways. All the
development Of our resources and all our natural
prosperity, unexampled in the history Of the
world, enabled us to pay but billion dollars Of
debt in twenty-five years and tho people now
groan under the burden OF taxation. At the
same unprecedented rate of payment, it would
require 14 years to pay of the debt incurred by
the purchase Of the railways Of the country, and
the mere matter Of interest with such debt,
added to the present debt, coupled with the ex-
penses Of the government, would amount to
about two million dollars day.
It is argued that the profits derived from
operating the railways would much more than
counterbalance the interest charges and pro-
vide sinking fund for the payment of the debt
incurred by their purchase In considering
this phase of the question, those who believe
that the government should own the roads
should remember that in 1883 over 81 per cent.
Of the railway stocks of the United States did
not earn one penny of dividend and nearly II
per cent. earned less than per cent. The chief
argument for government ownership is based
upon the theory that rates would be greatly
reduced. The statistician of the interstate
commerce commission reported that the total
income for 1888 Of the 1870 900 miles of lines rep
resented in his report was 500, 898, 846. Those
who demand government ownership would not
be content unless rates were reduced at least
one-fourth, which would reduce the revenue to
$500, ga, 135 The total operating expenses of
the roads amounted to S5O7, 79s3i5 This would
leave but little over $92, 100000 to pay the in
terest on 81, 600, 100000 Of bonds, amounting at
least to $210,000,OO0. This is based upon the
supposition that the government could operate
the railways as cheaply as they are operated
to-day, which is far from certain. It is more
than likely that the operating expenses would
be so increased that the net revenue would not
meet even the interest charges on the amount
OF the purchase.
Government ownership OF the railways would
make railway employees government appointees,
and the dangers which might spring up out of
such condition are so apparent that they need
not be specifically indicated.
The producers Who believe government
ownership to be desirable thing are earnest
and sincere in their opinions but they will do
well to carefully consider every phase of the
question before they commit themselves to its
advocacy Kansas City Times, June %, 1891.
At the close of the fiscal year ended
June 80, 1889, the cost of the railroads
proper mot including ssreal estate and
other investment'') and deducting the
amount of railroad stocks and bonds
helds by the railroad corporations, was
something less than eight billion Of dol
lars. When say 'scost" I mean ''cap-
italization," represented by stocks and
bonds held by so-called innocent pur-
chasers.''
While many of the roads paid no
stock dividends or interest upon mort
cages, the average rate of dividends
paid upon total stock issue, amounting
to just about one-half Of the eight bill
lion dollars, was per cent, while the
average rate of interest paid upon the
bonded indebtedness was ~ per cent.
I now want to take up and examine
this assertion, or claim, that the rail-
roads must necessarily cost the people
the sum of eight billions of dollars, be-
cause, forsooth, that amount of stock
shares and railroad bonds are held by
innocent purchasers. In the first
place the roads did not begin to cost
that amount of money. Poor's Manual
has stated more than once that the rail-
roads did not cost to exceed thirty
thousand dollars mile, or just one
half of their present capitalization.
G. Wood Davis, who is considered by
experts good authority on their cost,
and who has superintendent the build
ing of many roads, figures the cost Of
existing roads per mile as follows:
(Y-.N -