The record-union., 1896-05-18
THE BUSINESS VIEW GAINING.

It is noteworthy that a change in pub
lie sentiment is taking place regarding
the funding measure for the transcon-
tinentaI railroad debts. The insane cry
for foreclosure of the Government lien
was caught up by the dema gogues, by
all the political parties and by host Of
the people who had not thought upon
the question deeply, simply because 1t
was supposed to be popular thing to
do, and because 1t was assumed to voice
a spirit of independence and to en-
body a lofty opposition to organized
capital
Since the fling of the committee re-
port Of the House, however, the people
have had time to cool. and are disoov
ering that the fat demand for foreolos-
ure has two sides. It carries with 1t
first the necessity for the immediate
payment or foreclosure, of the senior
liens upon the aided roads; for before
the Government could possess and oper-
ate these roads it would be compelled
TO discharge the mortgages given in
advance of its own lien, and not only
recognized, but really promoted by it,
and in that sense guaranteed by the
Government. But to foreclose and sell,
subject to the prior mortgage liens-a
plan one time much advocated-would
leave the Government in no better
plight, since 1t is conceded that after
such sale there would be no balance left
over to apply upon the debt Of the Gov
ernment. That scheme, therefore,
means absolute loss to the Government
of the entire volume of its claim against
the subsidized roads. and there are none
now found so bold as to advocate it.
To accomplish the end of the foreolos-
ure-phobists the Government would
have to plunge deeply into debt to the
tune of many millions Of dollars and
this could only be done upon bond
basas, to which 1t will be agreed there is
overwhelming popular opposition.
Again, 1t is dawning upon the people
that the principal of the debt due the
chief aided roads to within about four
and half millions of dollars and that
the sum now due IS mainly upon the In
terest account.
It has also penetrated public intelli-
genoe nfsRt the chief reason for the fall
ure OF the scheme provided by the Gov
srnment for the gradual payment of
these debts, has been due to two causes,
over neither of which the roads had any
ocntrol. whatever, namely; the appre-
oiation of Government credit prevent
ing investment of the sinking fund TO
produce the income estimated to be nee
essary to meet the debt; and secondly.
the remarkable decrease of rates from
the schedule level upon which Congress
had first estimated the income of the
road. for service performed by the COM
pandes for the Government. This de-
cline has been more than three-fourths.
The declination OF income has been due
largely to the act of the Government
itself IN fostering rival carrier lines. so
that while the volume OF the service has
enormously increased, 1t has not pro-
duced a revenue by more than three
fourths equal TO that of the Congress
sional estimate.
Again, it has been shown that so far
from failing to keep their obligations,
the aided roads have to the last letter
and figure met every requirement of
the laws passed from time to time by
Congress providing a system of repay
ment TO it of its advances. This has
been 50 strenuously denied from the
stump. in the platforms of parties, and
by q conscienceless press, that the as
sertion of the truth by the Powers
committee has literally dumfounded
the foreclosure advocates so that we
look in vain in press or platform, or in
the expressions of the noisest orators,
for single word of denial of the fact,
or any attempt whatever to explain
away the damaging verify.
Ths whole matter has, therefore. re-