The morning call., 1893-12-30
RAILROAD BANKRUPTCIES.

!. The failure of the Northern Pacific, the
Union Pacific. the Santa Fe, the Erie, the
New York and New England and other
eognate corporations marks an epoch in
railroad history, and reminds the observer
of 1857, when fouT-ffths of the railroad COM
panies of the East went into bankruptcy.
The collapse of 1857 was due to over
speculation Of various kinds including rail-
road building. The collapse of 1893 is
partly the result of the general business
depression. unduly prolonged by the fear
of Democratic legislation, and partly of
actual robbery of railroad corporations by
managing directors. There has also per-
haps been SOME temporary building
in certain sections of the West.
I: Under the boom caused by the discovery
of gold in California the railroad mileage
of the United States increased from 1865
miles in 1919 to "a, sos miles in 1857. a
growth which was out of proportion to the
growth of the country. There were too
many miles Of road for the business to be
j.. done. The consequence. was railroad in
sOlyeneY, bankruptcies, receiversbps. AL
most every railroad corporation in West
ern New York. Pennsylvania: Ohio, Indi-
ana and Illinois failed. Since 1880 there
has been prodigious- extension of the
railroad SYSTEM. Our railroad mileage
swelled from SO. 2o6 miles in 1880 to 1885, 100
miles in 1858. The mileage in the North
western and Pacific States doubled in eight
years. The ratio of the. increase of popu-
latien has not been sorapid. Yet it would
be difficult to-day to point to a railroad
which is not serving a useful purpose
either for way traffic or as a connecting
line between pOpulous communities. In
some cases these roads may not. be very
profitable as yet, but under honest and in
tefligent management they need not be
.bahkrunt. AS in fact some of them have
been manipulated disaster was sure to
come sooner or later, and il has come.
The years 1S5S-61 were spent in recon-
struction. Watered stocks were wiped
out. Mortgages were foreclosed. People
vino thought they were rich found them
selves poor. But time, which heals all
thin Is, came to the rescue OF the broken
cornpan les. Empty places filed up. The
earth continued to yield her increase. BY
-1S62 the traces OF the crisis of 1857 had
been effaeed, The railroads were all on
their. feet again and their readjusted
stocks and bonds were property once
more. III
|. What has happened before will happen
again. But the. process of recovery may
be quicker now unless hindered py foolish
:legisletion.: There was but little over
building, and with honest management
the railroads that are not bonded for
double or treble their actual cost should
soon be on their feet again.
+ The soldier falls, but the: army advances.
Corporation. after corporation defaults on
its, interest; goes into the hands OF re-
ceiger and. IFS property is wrested out of
the possession of its original owners to
pass TO strangers. But the railroad re-
mains. yielding its benefcent service TO
+ the country and gradually converting the
: desert into the. farm and orchard. No
financial crisis can rob the. United States
of a mile of the. 10000 miles of track
which were laid when the census was
taken. Depression will be followed by re-
cuperat on. and as in 1S57some of those
who fell in the fight rebuit their shattered
fortunes, 50 now some of the bankrupts of
to-day will presently pick themselves up
and share in the recovery.