The record-union., 1896-01-21
GOVERNMENT OWNERSHIP.
Some Very Strong Reasons Advanced
Against It.
Government Should Not be Com
petitor With the Enterprise of
Its Subjects.

/ LcQSGT
The proposition to fund the Central
Pacific Railroad debt is now before
Congress. Mayor Sutro and his ilk of
demagogues, whose stock in trade is to
buccaneer politics and to actuate the
discomfort of idle vagabonds, are try
ing hard to make it appear that Califor-
ria does not favor funding this rail-
road debt. But sober second thought
is beginning to manifest itself among
the people, and the idea is rapidly crys-
tallizing that this is not a question OF
sentiment or ethics, but one of practical
business. Thoughtful Californians are
beginning to realize that there are two
practical questions involved and to be
settled: What course will be most bene-
fetal to California? What settlement
is fairest to the Government?
The Government holds a second mort
gage on the Central Pacific that is
almost due and subject to foreclosure
But there is a first mortgage that COW
ers the entire value of the road, SO that
if the Government should forecIose it's
second mortgage it would not receive
a dollar, and the road might pass into
the hands of Eastern capitalists.
Two remedies are suggested. One
is that the debt be funded so that ulti-
mately the Government will receive
every dollar of its claim. The other
is for the Government to foreclose its
mortgage, lose every dollar Of the debt,
pay off the first mortgage (Which really
exceeds its cash value) and place the
road under Government control and
management.
Wedo not believe that the Government
should be a competitor with the enter
prise and energy, the ingenuity and
skill, the brains and muscle of its sub
jects. We believe such a competition
on the part of a Government has tend
ency to stifle elementary effort and is
unfair And in practice we do not be-
lieve that Government management of
private enterprise is economical. We
never heard of a private enterprise un-
| der Government management that was
success from an economic standpoint.
| Any Government management is uni
versaIly signalized by extravaganza.
! When the Government undertakes to
manage railroads.&c. engage in private
enterprise-where is the limitation?
| Why not run the Touring mills, the
bakeries the butcher shops, the grocery
stores and all other enterprises Of a
quasi public nature that contribute to
the comfort and convenience of the peo-
pie? But admitting for the sake Of
argument that railroad and telegraph
service is analogous to the postal ser
vice, it does not follow that it is good
policy for the Government to attempt
to run a worthless road that is only
link to a system, and when operated
/ independently has no connecting system
at either end, is in itself unproductive,
and runs from nowhere to nowhere.
/ At most the road could only be a
feeder to some system. AS 6500O,0O0
| people would be interested In having the
road operated as a feeder and benefit
to the Atlantic Coast, it is not likely
that the 2,500000 people on the Pacific
/ Coast would receive exact justice. 1t
would be governed by the factors that
control all legislation, and the East,
the center of population, would Ger
tainly be favored at the expense Of the
| West
If the debt is funded, the Government
will receive it's full due, and the road
will remain in the hands of men who
own complete California railway sys-
/ tenn, and who are therefore identified
with and interested in promoting the
best interests of the State, because the
I
means increased earnings and value to
their California system.
This is a business proposition that
| should not be clouded by sentimental
| ism. If this sterile strip of ROAD should
fall into Eastern hands, the Vanderbilts
for instance, who own powerful East
ern railway system, and no California
system, what would be the result? Man
! ifestly they would not operate the road
/ to benefit California to the prejudice Of
their big Eastern interests. The ra-
/ tional conclusion is that California in
| terests are more apt to be promoted if
the road is managed by the men who
are interested in California, to the ex-
| tent of owning and operating a. COM
! plete railway system in the State.
The agricultural resources of Cali
fcrnia are her best interests. Because
of the barriers of mountain and desert
that isolate California, the Importance
and growth of manufacturing indus
tries necessarily depends upon local
want, and we can hardly hope to ever
invade the populous East and become
competitor of much significance.
Il is vital that California should for
I her farm products have low freights
out and high freights into the State.
1 This is practically the policy of the
railway management now, and as a
I sequence we can annually ship 10000
carloads of oranges 8, 900 miles to New
/ York and successfully compete with
Florida. that has only to travel a third
of the distance. It is this policy, pur-
sued for the purpose of promoting Cal
1 ifornia interests, that enables us to
ship a carload of peaches 5000 miles
| and successfully compete with the
Michigan and Delaware peach grower,
/ who only has to travel fifty miles to
/ the same market This policy enables
/ us to ship all kinds of farm produce,
J fruits, hops, etc, to New York, but
J the freight is doubled and quadrupled
4 if the New York farmer attempts to
4 ship the same kind of stuff to Califor-
4 MA This is because the company owns
/ a railway system in CALIFORNIA;, 123
miles of main line, branches and feed
ers-and this property Is only profit
able when the basic industry of the
/ State-farming-i prosperous. In fact,
/ the interests Of California and the COM
pany are Identical, and mutual bene-
! fits accrue from the rule of low rates
1 out and high rates in for farm pro-
ducts.
The conclusion is therefore irresist-
! ihIe that Californias interests lie in
/ having the Central Pacific debt funded.
! II we are guided by business methods,
and not by prejudice and sentiment,
/ there seems TO be no other rational
! thing to do.
i The question that confronts us is
what is best to be done for the nation
and for the whole State, and it makes