The Mankato free press. [volume] (Mankato, Blue Earth County, Minn.) 1879-1924, 1894-10-12
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 Step That Could Be
SS6sszs
=. Safely Taken.

md operation of railroads, telegraphs and
telephones"
This declaration is found in the Peo-
Piles party platform of 1892, is reiter-
ated in its national platform in 1894,
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-
Eition 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 system is
now and has for some time been in
force.
How Will 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 confiscation or by purchase
Presumably not even the most radical
Populist would advocate naturalization
of railroads by confscation, 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-
6OIIOI "Oulu US III.
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 nearl y 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 $4,000 per mile is
the maximum cost of existing railways,
and that there are 100000 miles, it
would give a total valuation of
$4,8OO,0OO 900. 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, 900, 600 of 8 per cent
bonds are issued in order to make nav.
ment thereof"
Mr.. Eugene D. Mann, one of the
latest authorities on the same side saws:
"In all likelihood these $40, 500, 600. 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. 1t is fur
thermore true that large sums of rail
way capital have been sunk in waste
4O1hOoo VI III ulI0CGlOHS have repre-
sented no adequate resultant value.
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 in the
United States I"
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 and 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 Nyernment ownership,
it is no more til fair that they should
first consider just what this involves,
with exactly the same care thai a pru.