The morning call., 1892-06-27
THE SUBSIDY BONDS.

The Chicago Tribune advises the Govern
ment TO lose no time in paltering with the
subsidy railroads, but to forecIose when the
bonds mature and "t0 lease the roads on
moderate terms to responsible parties who
viii bind themselves to charge only fair
rates for freight and passengers" Such a
plan has been tried and is now in operation
in Italy just eleven years ago the condi-
ton OF the Italian railroads was desperate.
Two-thirds Of them belonged TO the Govern
ment. having been buit mainly for strategic
purposes; the other third belonged to conf
panies. The Italian Chamber referred the
subject to a commission, which reported
against the operation OF the railroads by
the State as is done IN Germany and recon-
mended that The roads be leased. After
discussion which lasted several years a law
was passed in 1885 directing the lease of the
railroads by the Government Tor sixty
years. with an option of canceling the
leases at the end of twenty or forty years.
Under that law leases were concluded and
are in force to-day. The total mileage Of
the Italian roads is about 10,0OC miles.
About one-eighth of this system consists of
short roads which were built in Sicily and
Sardinia to open up regions which had DO
Il
a loss. The main systems which traverse
the peninsula from north to south pay
per cent interest on their debt. and realized
last year, after payment Of all expenses,
about = per cent on the sum at which they
were capitalized in the leases. The service
is good, but the traffic on the lines mainly
comes from the foreigners who visit Italy.
Neither industry nor trade nor agricultural
1,Fa, 80 ,F-HH- .. A.
leasing schemes may be said to have been a
success. In Germany, where the Govern
ment owns and operates many Of the lines,
the aim Of the managers is to make them
contribute something toward the public
revenue, and this policy does not tend to
make the imperial system popular.
There are various matters TO be cOnsid-
cred in connection with leasing the plant
Of the Pacific railroads which, on reflection,
will readily occur to the Tribune On whom
would the duty Of providing renewals and
betterments fall-the lessor or the lessee?
But there would seem to be no objec-
ton 10 placing the roadbed of the
roads on the same footing as the lands Of
New York, and OF allowing any one who
chose to run cars over it en- the payment Of
tolls. The effect oil this plan would be to
call into existence a number of transpOrta-
ton companies which would contract to
carry freight between San Francisco and
Omaha. II they overeharged shippers the
latter could easily fern a rival company to
haul their own freight Large merchants
might own their own freight-cars and loco
motives and move their own freight where
and as they pleased. The Government
would fix the rates OF toll at a figure which
would provide means to keep the roads In
repair and to pay some small interest on the
sum which the roads had cost it. 1t would
not be regarded as proper for the Govern
ment to make money ont Of the transporta-
ton business, but it could not be blamed
for dealing with the property of which it
had become the involuntary possessor, as it
deals with the iuT-seal Islands Of Alaska
Public men cannot too soon begin 10 give
this subject little consideration The first
Of the subsidy bonds viii begin to mature
in two or three years, and in a few years
thereafter the question will be precipitated
on Congress for solution. There is not the
smallest chance that the country would
acquiesce IN any Of the schemes which have
been suggested for the extension of the
bonds at a nominal rate Of interest. 1t
would be asking the people TO give more
millions to persons who have too many mix
lions already. A Congressman who under
took to advocate such donations of public
money to tie rich would sign his own death
warrant. There was a time when Congress
was in such a good numor that the extern
sion scheme was listened to. but that time
has passed within the past few years The
railroads have made themselves too unp0pu-
lar to ask for any favors. When the bonds
Nrrwu he
the people will insist on the letter Of their
bOnd