The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1894-10-12

dent man would eAoer Use before he In
dulg in the purchase of costly farm
machinery.
We must have something better than
guess work before we propose to issue
government obligations amounting in
all to over two or three times the
amount of the entire national debt at
the close of the war.
Capital Stock and Indebtedness of Rail-
roads.
Poor's Manual for 1894, which is the
universally accepted authority on rail
road statistics and is several months
later in it's compilation of facts than
the report of the Interstate Commerce
Commission, states that the capital
stock of the railroads of the country at
the end of the year 1893 amounted to
S., $50, O32, 1904.
These same roads had a funded debt
of 5,570, 1912, 613, an unfunded debt of
$40, 1861, SOB, and current debt of
1888, POI, S72; making the total liabilities
of the railroad systems of this country,
$11, 443, S9S, 1892.
This figure furnishes the problem
with which we have to deal.
1t is easy to say that large portion
of this amount represents watered stock
or fraudulent transactions, but there
exists no authority competent to say
what portion of it is of that character,
and no tribunal that could scale down
the amount.
Actual Cost of Railway Property, Per Mile
1t will be observed that one of the
authorities quoted above says that $780,
600 per mile should be assumed as the
cost of constructing these railroads.
That is purely arbitrary assumption.
1t Is less than one-half the actual
cost; and there is no more reason for
ieducting so per cent in this case than
there is why a man who desires his
0eighbor's horse or farm should not
;oolly appropriate it, paying only one
half the price asked by the owner, and
defending his action on the ground that
this is all that the chattel was worth.
The average cost per mile of the rail-
ways of the United Kingdom is put at
S219,775.
If it is ass erted that these figures are
Unfortunately large, by reason of the
high price to be paid for real estate APP
prOpriated, reference may be made to
New South Wales, where the conditions
very nearly approach to those in our
own country.
The average cost of construction there
is given officially in the report made be-
fore the worlds congress at $76, 23O.
There is no country in the world,
even where labor is cheapest, where a
system of railroads was ever constructed
for $50, 900 per mile or anything like it.
There is no court which would ever
affix any such price as that to our rail-
roads If condemnation proceedings were
had before it. 1t may as well be under
stood first as last by those who have
been filled with wild vagaries upon this
subject, that the railroad property can
be taken for public use under the con-
stitution only by due process of law.
That due process of law means con-
demnation proceedings before a court
of competent jurisdiction under the law
OF eminent domain.
And that such condemnation can be
made only upon the payment to the
owners of such property the compensa-
ton agreed upon and approved by the
court.
United States Railways Would Cost the
Government Ten Billion Dollars.
No court exists or can exist in any
civilized country that would assign to
the railroad properties of the United
States, whose aggregate liabilities rep
resent nearly $l1, 100000, 900, a pur-
chase price of scarcely half that
amount.
While there is some watered stock in
the aggregate liabilities, great deal of
it represents an actual increase in the
cost value and earning capacity of rail
road property which was apportioned
among the owners of stock in this way,
instead of by largely increased divi-
dends.
In the light of our own experience
and that of others, 5000 a mile is a
reasonable average estimate of value.
There are nearly 100000 miles of rail-
way in the United States.
Making every allowance possible, it
is evident that the government would
have to pay in some shape or other,
at least ten billion dollars for the rail-
roads.
How the Purchase of Railroads Might BE
Brought About.
This purchase could be effected only
in one OF two ways:
Either by the issue, and sale for cash,
of bonds, the proceeds to be paid to the
owners of railroad property.
Or by the exchange of such bonds for
the stocks, bonds and other obligations
of the railroad companies now held by
individuals and corporations.
The first may be dismissed at once as
impracticable.
The government of the United States,
magnificent as its credit and resources
are, could not float loan of this size in
any of the markets of the world, on
any terms it might offer.
The transaction is at once too large
and too dangerous.
The process of an exchange of bonds
for railroad securities would have to be
adopted.