The Providence news. (Providence [R.I.]) 1891-1906, 1894-09-26
THE RAILROAD STU ALTON.

w hlie IL is reported tnat the railroads
are gradually getting into better condi-
tion as regards traffic and receipts, it is
evident that their fiscal condition, re
garding them as corporations in the Sc
curities Of which a vast amount of cap
ital is invested, seems To continue in a
state OF unrespvnsiyeness that is very
discouraging.
The most strenuous efforts have been
made 10 rehabilitate railroad corpora
tions, some Of which had been put into
receivers hands expressly to enable
friendly influences freer opportunity to
rearrange their affairs, but it appears
that paralysis has developed of too
stubborn and serious a nature to be
overcome readily.
Itwas inevitable that this difficulty
in adjusting indebtedness and procuring
new capital should disastrously affect
the speculative and investment dealings
in railroad stocks and bonds, and check
the flow OF money into railroad con-
struction and operation.
So it has come about that the general
railroad situation has gotten into con-
dition that has led to considerable spec
ulatiCn as to their future, immediate
and ultimate. The problem of the
future has also begun to unfold itself,
or give some hints of its unfolding
Some time since a prominent railroad
manager said to college pro-
fessor of economies that $780,
100000 could be saved annu-
ally IN operating expenses if the rail-
roads OF the country could be managed
as one system. This is certainly most
important and suggestive statement.
The facts that warranted it were as well
known to other railroad men as to the
author, and the desire to limit operating
expenses has already led to a movement
of consolidation in the South of far
greater importance and significance than
has ever before been attempted in any
country, If we except those counties in
Europe where there is absolute or limited
State control.
The railroads of the United States
paid last year less than per cent. on
their capitalization and bonded indebt-
edness. The floating debt was large
enough to reduce the dividend rate con-
siderably, had interest been paid on
dividends extended to cover 1t. IL is
plain enough that such a condition can
not be maintained. 1t is as plain that
at present the remedy must be some
thing other than wholesale consolidation.
What the remedy will be is beyond the
guessing power of anybody. 1t is al.
most as vain to hope that return of
OF general business prosperity will work
all change needful as that there will lie
great union of lines.
1t is not impossible that the epidemic
of receiverships will operate as remedial
to some extent, as the plans of
reorganization adopted may squeeze at
least portion OF the water out of the
stock capitalization and the roads may
be expected TO earn only fair dividend
rate upon money actually invested in
them.
1t is easier to realize the defect in the
railroad system than to conceive a
remedy. There are plenty of writers
who do not hesitate TO declare that the
whole logic of the situation argues for
Government ownership, but such con-
clusion is in the nature of begging OF
the question. Ii is generally arrived a,
as convenient, ready-made solution,
and an escape from the maze of per-
picking study braver course would
lead to-
There are very strong arguments for
Government ownership. There is the
communistic reason, which is not good
one, for the simple reason that Govern
nent ownership could not be made TO
effect very great reduction in the cost
10 users of railroads; aud there is the
economic reason, which can be appeased
exactly rs well through agencies like
hat which has influenced the organiza-
ion of the Southern railway system.
The relation of the railroads to the
general business of the country is very
lose and influential. Until the railroad
problem is definitely settled. and the
carrier corporations doing business on
business basis and according to busi-
ness principles, general business will
acutely feel the strain Of the unnatural
conditions.