St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1895-01-21

cheapness with which they can be pros
duced, has produced a revolution in tbs
price of steel rails and BesSemer pig.
Steel 5illets, the base of the steel rail,
which in 1890 sold for $50 ton in Pitts
burg, now sell for about SIT; and Bes-
semer pig iron has fallen from about
SIS in the former period to about Sl2-
at present New England iron mills
are either being moved South or aban-
doned. and the great stove works of
Troy, N. Y, have shifted their base of
production to Southern fields some time
since. Thus, hard pressed by her an
cient foe, New England is clamoring
now for free coal as its sole resort from
the competition which is sending her to
the wall in these two great lines of her
manufactures. She sees the supremacy
so long maintained. the source of all her
accumulated wealth. passing from her.
and the South her politicians have SO
maligned, triumphant over her.
ONE HORN OR TIE OTHER -.
Suit has been brought by the first
mortgage bondholders of the Union Pa.
cific to forecose their mortgage. The
amount due is some thirty-odd million
dollars The United States stands be-
hind with second mortgage given to
secure its subsidy bonds, which, princi-
pal and interest, amount to something
over $40, 000,0 900. The road is not worth
the amount of the first mortgage bond.
For long time this climax has been
anticipated, and various propositions
have been pnt forth for settlement of
the claims of the government. Senator
Davis plan, which was reported some
three years ago, involves all extension
of the time for payment OF the govern
ment claim some fifty or hundred
years, to run with interest at 2 per
cent per annum.
If this were merely business PROPOSE
ton. to be treated as any business man
would treat a similar situation in his
own affairs, the government would not
throw good money after bad. but would
charge off the debt to the account of
profit and loss, and let the matter drop.
No business man would think for a mo-
ment OF investing 3d., 900 in prop
erty worth less than that amount i'll Or
der to secure his own investment of
forty-odd million dollars. Such BUSH
ness methods lead directly to the bank
ruptcy courts. But there is larger
question than one of business involved
in it. one not so much of present as Of
future policy.
The drift of conditions, as we'll as
public opinion, is towards the nation
alizatlon of the railways of the country.
However much one may dislike this
consummation, whatever of danger to
our institutions one may be able to see
in it, it is folly to disguise or deny the
existence of trend in that direction.
When the states and the federal gov
eminent abandoned the position that
railway enterprises were private i'll
their nature and began to regulate fares
and rates and establish railway COM
missions and pass maximum tariff acts
and assume regulation of rates by the
Interstate commerce act; and when, Oh
the other hand, the courts, trying to get
at basis of what shall be reasonable
rates for freightage, assume that the
capital in the road as represented by
its stock and bonds must be taken as
that basis, it becomes evident that we
have drifted very far away from the
original position and have reached a
point where the naturalization of a
road is the inevitable and logical out
come.
If this is to be made a practical ques-
ton, no better opportunity affords than
this case Of the Pacific road for the gov
eminent 10 make the experiment. It
can readily make terms with the first
mortgage bondholders, and obtain the
ownership of The road. 1t can then ex-
pertinent in two directions. 1t can dis
pose of the rolling stock and confne
itself to the mere operation of the road
bed, making it a public highway to be
used by individuals or companies under
suitable regulations. Or it can retain
the rolling stock and operate the road,
using If not so much to derive profit as
for governor TO regulate tranSconti-
mental freight rates.
One course or the other must be
taken. The action of the first mortgage
bondholders brings the question to
crisis. The investment of the govern
ment must be either charged off to
profit and loss or the claims Of the first
mortgage bondholders secured, and with
it the ownership and the question OF
operating the road While this suit
involves only one division of the road.it
practically affects the whole line, be-
cause the conditions of the other d.
visions of the road are practically the
same. The situation compels action,
and that at once. One horn Or the
other OF the dilemma must be taken.
Either drop the claim,o pay off the lien
L. i ll,.., L