Morris tribune., 1894-09-26
A Wild SCHEME.
PEOPLES Party Demand For
Government Ownership
of Railways.
AS a Practical Affair, 1t Would
Be Too Expensive and
Hazardous.
No One Has Pointed Out the
First Stop That Could Be
Safely Taken.

sswe demand the government ownership
and operation of railroads, telegraphs ana
telephones"
This declaration is found in the Peo-
ple's party platform of 1899, is relter-
ated in its national platform IN 1874,
and is an acknowledged tenet OF the
Peoples party faith in nation and
state. Indeed, in some localities, the
Peoples party movement grew entirely
out of opposition to railroad interests
and found its highest purpose in the de-
mand that the railroads should be sur
rendered to and operated by the general
government.
1t is proposed to examine this propo-
sition as practical affair in some de-
tail.
First will be considered the difficult
tiss in the way of realizing this theory
in the United States, and afterward
will follow an examination Of the actual
effect, upon the people, OF government
ownership and operation of railroads in
those countries where such a system is
now and has for some time been in
force.
How VIII the Government Take What
Is Now Private Property.
The first question to be answered,
and one which cannot be lightly dis
missed is, how is the government to OBJ
tain possession of what is now private
property, as sacredly protected by
right and by law as any other form OF
property in existence.
There are but two ways in which the
railroads of the United States could be
transferred from their present status to
public control; viz:
By confscation or by purchase.
Presumably not even the most radical
Populist would advocate naturalization
of railroads by coniscation, since there
is no reason why the process should
stop there.
If railroad properties can be taken by
the state without compensation, so
might every other form of wealth; and
not only would the constitution of the
country be overthrown, but the very
fundamental tie which binds society to-
gether would be sundered
1t may be assumed, therefore. that
the Populist theory requires the pur-
chase by the government of the rail
roads at such price as might be agreed
upon or arrived at by due process of
law.
This is point which all the advo-
Gates of state ownership have passed
over lightly and unfairly.
1t cannot be so dismissed.
The speeches, magazine articles and
pamphlets favoring government owner
ship, and they are many, all proceed on
the assumption that the present capital
lied value of railroad properties in the
United States is not only enormously in
excess of the actual cost of construction,
but is nearly or quite double the amount
for which they might be acquired by
the people.
How Much Shall the Government Pay For
the Railways?
Mr.. G. Wood Davis, one of the ardent
advocates of the scheme, in an article
in The Forum states the problem in this
way:
Assuming that $50, 1000 per mile is
the maximum cost of existing railways,
and that there are 100000 miles, it
would give total valuation of
81, 800, 900, coo. But that there may be
no complaint that the nation is dealing
unfairly with the owners Of much
water, it will be well to add 25 per cent
to what will be found to be the outside
value of the railways when condemned
under the law of eminent domain, and
assume that $4,000, 600, 900 Of 8 per cent
bonds are issued in order to make pay
ment thereof.
Mr.. Eugene D. Mann, one of the
latest authorities on the same side says:
'sIn all likelihood these $40, 800, O00, 900
of securities do not represent much
more than half that sum of cash act
ually expended upon the railway prop
critics of the country. In most cases
the bonds were sold below par and %
per cent or less of their par value would
cover the money produced and en-
ployed for the sale of stocks It is fur
thermore true that large sums Of rail
way capital have been sunk in waste
fulness or in directions that have repre-
scented no adequate resultant yalue.
The extent to which earnings have
been applied to the perman ent benefit
or increase of property was probably
Offset by issues of stock that brought no
funds into the treasures. Six billions
of dollars in ready cash would doubtless
buy all the railway property ip the
United States"
Their Figures Are Indefinite, and Their
Arguments Weak.
These two extracts fairly represent
the whole array of Populist authorities
in favor of government purchase.
1t will be observed that their figures
are of the most indefinite anl their ar
guments Of the ARREST sort.
In approaching commercial trans
action of this magnitude and import
ance, it will not do to guess at values,
and to knock off billion or two at
pleasure wherever the results are not
satisfactory.
If the people are to be asked at the
polls to elect representatives committed
to the policy of government ownership,
it is no more than fair that they should
first consider just what this involves,
with exactly the same care that pru-
dent man would exercise before no III
dulged 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 ths
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 its 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
Sc, 080, 032, 904.
These same roads had funded debt
n o e. 1aI.L <SG