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

Il. %.
Missouri Pacific. ......... 45OOO,oOO 79l4 So
s a 81: & FL &; !
Texas & Pacific. - ss'7iO'sOO 241l IL
Toledo, A. A. & N Mich, 53OO,OO0 42AI IL
Union Pacific. .......... g. 526 69Kl 40
q: p, Denver & Gulf 49,. 3152,7O0 38N| II
WABASH. MUU,UU ION 0H
Now here are twenty-nine roads,
among them eight or ten of the most
valuable roads in the United States, the
twenty-nine roads representing stock
capital of 1914, 9O6, 741, the stock shares
of which, figured roughly, are worth
upon an average 81 cents on the dollar.
This must serve as an illustration of
what I am driving at. The notorious
Missouri Pacific is only worth sc cents
on thd dollar. From the same report I
gather the fact that Atchison, Topeka
& Santa Fe stock was worth 81 cents on
the dollar, while Atlantic & Pacific was
worth N cents. These two roads rep
resent capital stock of $155, 1000, 900;
while New York, Lake Erie & Western,
with capital stock of $50, oOo, ZOO, was
worth % cents on the dollar; or the
three roads, with $241, 600, 900 of capital
on paper, could have been bought by
private individuals for 100000
From these facts assume that care
full comparison and examination of the
records Of the New York stock exchange
for the five years ended December 81,
1890, will reveal the fact that the four
billions Of dollars in railroad stock
shares is worth in cash not more than
81 $780, 100000. And very much the same
state of affairs will be revealed in refer
ence to railroad bonds Why, then,
should the people, or government, be
expected to pay eight billions of dollars
for something private individuals have
bought and sold, over and over again,
for less than one-half that amount?
To simplify the matter and avoid
lengthy argument, we will assume that
the peoplesbought the roads, water and
all, for So, 600, 900, 900, in United States
two and one-half per cent. bonds, pay
able, at the option of the government
utter ten years. This is done in defer
ence to those who, like the Kansas City
Times, include the wilfully ignorant
holders Of fictitious stocks and bonds,
in the class known as 'tinnocent pur-
chasers." It is, however, difficult to
comprehend why fraudulent paper
representing an outrageous swindle,
should be any more sacred than stolen
horse or a stolen watch. sympathize
with Cass county, Mo. It is to be
understood that freight and passenger
rates are to be kept SO adjusted that no
greater sum than $500, 100000 shall be
collected each year. This would call
for an annual interest pay
ment of $500, 1000, 900, and an an
nual sinking fund Of $3.50, OOO, 900.
Now what do we find? The net annual
receipts are exactly large enough to
pay the $500, 600, 900 in interest and pro-
vide sinking fund of $3.50, 900, 900 each
year, which we will assume, for the
nonce, is swelled by savings effected in
operating expenses to an annual sink
ing fund of $3.50, ZOO, 900, amounting at
the end Of the first decade to 81 600, OOO,-
600, being the amount of the first in
stallment of bonds. Now note this
fact: While there has been no apparent
reduction of rates there has been very
material actual reduction in rates.
Upon basis of 100000 population
for the fiscal year ended June 80, 1889,
the per capita cost of railroad facilities
for the nation was just SIG. For the year
ending June 80, 1899, the population
would be, say $4,000, 900, and the per
capita cost of railroad facilities $12-
q reduction of Is per cent. At the end
of the second decade, or twenty years,
another one-fifth Of the cost of the rail-
roads would be paid, and as the popula-
tion would be increased to probably
loo, 000, 900, while the gross cost of rail-
road facilities remained at $500, 00O, 900
the same as for the year 1ss9-the net
per capita rates would be $500, a re-
duction of 90 per cent, or gross per
capita reduction for the twenty years of
40 per cent, and so on to the end of
fifty years.
In explanation of above it NAV be
stated that it will be readily seen that
the increase Of population and conse-
quent density Of settlement would be
accompanied by a corresponding increase
Of freight transportation and rail-
road travel; so that, while the
gross amount collected from the people
annually would remain the same, there
would nevertheless be steady reduc-
ton, year after year, in freight rates
per hundred or bushel, ETC., and cor
responding reduction in passenger rates.
I trust that have made it plain that
the people could buy the railroads, even
at the price Of fictitious capitalization,
represented by stocks and bonds, which,
as the Times says, sshave gone into the
hands of SO many innocent purchasers
that even those who advocate any other
method would, on consideration, admit
it to be impossible of adoption;" and
yet not be more than one-fifth Of the
154 years in paying for them, while
rates would be reduced ssat least one
fourth the first ten years.
Now, want to notice one other feat.
ure Of this programme. The accumula-
ton and setting aside of an annual sink
ing fund, amounting to $3.50, 000, 900 each
year, would, il no provisions were made
to{counteract Afhe effect rettre frrIaa ~