The Goodland republic. [volume] (Goodland, Kan.) 1891-1907, 1897-05-07
"a PWoTAL MovEMENT."
Bow bonds Are AReeted By the Pres
emf Curranev svEfern-

Bow bonds Are AReeted By the Pres
emf Currency System.
The agricultural classes are not the
sEly ones who are called on to make
sacrifices to the gold standard. In fact
the great financial interests represented
in bonds and securities are beginning
TO feel the process by which they are
compelled TO surrender larger amounts
Of profits than the gold standard has
withdrawn from the producing classes.
This beginning was recently marked by
q transaction Of such magnitude as to at
tract the attention Of the financial
world. This transaction is the refund
ing of the bonds of the Lake Shore rail-
way, amounting to s5O,OOO,OOO, or a
basis of 31s per cent. It is not ques-
ton as to whether the investOrs-the
holders of the bonds-are willing to
have their inteMst fund practically cut
in two; it is a question of accepting
half or getting zone. That is what the
refunding scheme means. Financiers
cover the scheme under the polite name
of "refunding," but the transaction re-
mains the same. The road says to its
boudbOIders; 81 can pay you 31a per
cent. interest. You viii have to accept
it or get none" The investors grunt,
and gToan, and growl; but they are
compelled to accept. Their interest re-
turns are cut in two.
Bradstreet's weekly publication re-
fers at some length to this Lake Shore
transaction, and calls it "a Pivotal
Movement in Finance" But it must be
obvious to those who are familiar with
the financial events of the past few
years, that the pivotal movement
came when Mr.. Cleveland, contrary to
law aud public policy, declared tint the
obligations of the government are pay
ableingold alone. That was the pivotal
movement, and the cutting down of the
interest fund of corporations, which has
begun on 50 large a scale, is simply one
of the many and faT-reaching results.
II is an easy matter for editors whose
opinions and views are nodded entirely
by their surroundings to mistake effect
for cause. The Lake Shore tTansac-
ton is just as pivotal as the stupen-
dous fall in prices since 1892 has been,
no more, no less. 1t is an announce
ment that the holders of the bonds of
American corporations will hereafter
he compelled to content themselves
with half the rate of interest they hove
formerly received. Prices fell, and the
producers OF the country have had to
content themselves with less than one
half their former returns; the rate of
| interest has fallen and investors will
have 10 endure the consequences. All
these things, as the Constitution has
pointed out time and time aguin, are the
logical, the inevitable result Of the cur
rency system which these investors
have caused to be established. When ii
is fully and firmly established Should
that misfortune be in store for the
country the bondholders will discover
that the producers of the country will
not be the only ones to suffer. They will
find that they have practically killed
the goose that has been laying theiI
golden eggs.
The Lake Shore transaction calls re
newed attention to the fact that during
the next four years 20 railway systems
of this country will have bonds matur
ing to a total par value of $223,OOO,OO(
in round numbers. The larger proper
ton of these bonds bear interest at six
and seven per cent. The total annual
interest charge which the campanie;
have to pay amounts Il S14,5OO,OO0 il
round numbers. Between 1901 and 800;
20 other roads will have maturing bond:
to the amount Of $262, OOO, 900, on which
the annual interest charge is not les;
than $16,COO,OOO, In nine years, there
fore, railroad bonds amounting to $500,
100000, and calling for annual payment:
of $50, 790, 900, viii mature.
These bonds must be refunded at Z
! lower rate of interest. If the reduction
in the interest rate Is as large as thai
of the Lake Shore operation, the held
ers of the bonds will have to lose about
$14,OOO,OOO a year. This, however, is q
mere drop in the bucket compared with
other changes and developments at
tendant upon our present currency sys
tem.-Atlanta Constitution.