Little Falls weekly transcript. (Little Falls, Morrison Co., Minn.) 1894-19??, 1894-09-28

isevident that the government wou1o
have: to Hpayin some shape or other.
at least ten billion dollars for the rail.
roads. <:'' s}lf:t5 ,i' ~ .~
How the Purchase of Railroads Might BE
4 = e. Brought About. :
This purchase could be effected onlv
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 it's credit and resources
are, could not float a 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. - "
for railroad securities would have to be
adopted. II t..E X &,
This would necessitates government
guaranty Of q satisfactory rate Of inter-
est on the new bonds before transfer
could be effected. 49,
What that rate must be would re-
main to be determined. .t-t
According to the report Of the inter
state commerce commission 61.24 per
cent Of the capital stock; of our railways
paid no, dividends during the Year 1898;
6:y2 per cent paid Z per; cent dividend;
6,M per cent, paid from tot per cent;
1l.62 paid from5 to 6sper cent, and the
remainder paid; all thezway, from s per
cent down sto.nothing at K. :. =.
<4Ofthe bonded debt 13,3s Per cent paid
no intsreste8nd the remaining :86:7 per
cent paid the rates Nominated in the
bond. 49, r. -;~rf
All these varying rates of profit
would have to be met by increasing or
decreasing the quantity Of bonds: given
in eXchauQa.r a+sE:u'a Il ~ 1T
As there, are hundreds and hundreds
of railroad corporations in the country
the business 81 negotiating such q pulr-
chase would be the most colossal ever
undertaken and would offer opportuni-
ties for peculation and private profit
that might well be considered irresist-
ible. 2j3 ss+<~$.ssZ s* ~ 80. 1@+s:Az = ,..*'
Interest on Purchase Bonds Would Amount
sS&s4. IL to3AIore Than Net Earnings. - -
The lowest rate at which the govern
ment has, ever been able to issue it's
bonds is 4 per cent. Fl ~, 4-- j.. ::
Some Of those already issued were
continued at as low a rate as per cent,
but the lowest issue made during the
current year bears per cent. ..4
1t is not probable that the ten billion
dollars of bonds to be exchanged for
railroad properties would be accepted
at less than per cent. s.l ~.--....<,>
Ih1s would amount, on a capital OF
SIC, O0O, 100000, to an annual interest
charge Of $500, 900, 900. H. ..l. ~ e.>~ i.
IF the rate were higher than this. and
there is every probability that it would
have to be raised to at least 5 per. cent,
the interest charged would be increased
to $500, 900, 600.
According to Poor's Manual, the total
earnings Of all the railroads in the
country for the year 1893 from every
source, including the elevated roads ii
cities, were 81 1922, 6l8, $50.
Ihe operating expenses for the same
period were 1855, OF, 18l, leaving net net
balance Of total revenue over operating
expenses Of $3.50, 591, 100.
twill thus be seen that the financial
balance sheet Of the last year shows q
net revenue insufficient by far to paY
the smallest = interest charge within the
bounds Of probability upon the price
that the government would have to nav
Tor the roads.
Natfonal Operations of Railroax1s il ~.
pensive and Hazar1ous.
This estimate, too, involves the as
sumption that the ilroads5 would be
operated az onomically under public
IS under private control.
A discussion of that question viii mt
be entered upon here at length. beinp
reserved for later article, IL IL which the 8
/ experience of other scoun tries win rs
quoted to cover the point jconclulsivalv
e may be saiid here that that exne Is
&. once shows unifornl that public man