New Ulm review. (New Ulm, Brown County, Minn.) 1892-1961, 1896-12-16
Wednesday December, IS 1896.
Favors Government. Ownership.

Favors Government. Ownership.
- It is objected, that in taking tn.
ownershipuf our railroads, our govern
, ment would have to assume an intoler
. able burden. It is pointed out that tbt
total valuation of railroad properties ii
the United States aggregates $1,000,
p: 100000; that to own this property the
government must buy it; to buy it, il
must have money; and to get money, il
must issue interest bearing bonds, there.
by creating an enormour interest bearing
debt which our people would have to
pay. But it is overlooked that our peo-
pie are already shouldered with this
debt, and the burden of it is much more
onerous than if the debt, now issued by
the railroads, were issued by the govern
ment. The railroads pay a higher inter-
est for money than the government
would be required to pay. and the peo-
pie must supply the railroads with this
higher rate of interest by paying high
freight and passenger rates. The bur-
dens of our people would be reduced,
not increased, by the government taking
over the railroads. Let us see how.
In the first place, while the capitaliza-
ton of our railroads is close to 81, 00O,-
100000, much of this represents mere
water, the issuance of securities for
which no money has been paid. The
amount of money that has been actual
ly invested in our railroads does not
probably exceed $4,000, 900. The
government would take the railroads at
this, their real valuation, and not their
fictitious value of $11 ,0O0,0OO,0O0. So
the value of the property for the govern
ment to buy would be something like
$6,OOO,OOO, This represents about
the sum the railroads are now paying
interest on. For the fiscal year 1895,
the railroads made no return on &c.
475,640,203 of their capital stock or
$S9O,561, 400 of their funded debt. a
total of $4,366.2O1, 1858. This left a
capital represented by stocks and bonds
of $5,9SO,552, 1866 on which the railroads
paid interest. On this capital they d.
vided 1887, seO,463-a sum of course ia
ken from the public who used the roads.
in freight and passenger charges-which
gave an average rate of interest of sos
per cent.
Now when the government came to
take over all this railroad property at a
fair valuation what would it have to do?
Simply issue its own bonds which the
present holders of railroad property
would gladly take in exchange for their
present securities, and, owing to the
greater security offered, at much lower
rate Of interest than they now receive.
Probably the government would not
have to pay more than 81 per cent inter-
est, whereas the railroads pay 81. Now
81 per cent on six billion comes to $780,
100000 which the government would
have to pay as interest. But how would
it provide this. Out Of the general GUS
toms and internal revenue receipts? Not
at ALL It would get the needed money
as freights and fares from those who
used the roads just as the railroad cor
porations now do. But there would be
this difference. Where the railroads now
exact 338 millions the government would
exact 21O, saving to those who used
the railroads in reduced freights and
faxes of 118 millions. So we see, that
instead of increasing the burdens of our
people, the taking over of the ownership
of the railroads by the government would
tighten their burdens on this one score
of the saving of interest by at least one.
third.-Hon. Wharton Barker in Phila-
delphia American.
President Clevelann's message to con-
gress must be looked upon as compre-
H. T.