The Kootenai herald. [volume] (Kootenai, Idaho) 1891-1904, 1897-05-08
FARMERS NOT ALONE.
THERE ARE OTHER VICTIMS OF
THE GOLD STANDARD.
Holders of These Securities Have
Their Interest Cut in Two-Under
the Present Currency System They
Will Lose S14,OoO,OOO Year.
Refund,ne of Railroad Bonds.

velopments that are taking place III
the financial world without becoming
amenable to the charge of "agitatng
the money question, says the Atlanta
Constitution. And yet agitation in any
sense is. for various and sundry rea-
sons. altogether foreign to our purpose
That purpose (Which is in the nature
of a duty is to keep our readers as fully
informed as possible in regard to some
of the larger developments that are
taking place, the details of which DO
not figure in any tangible way IN the
current news of the day as set forth
In the dispatches from the great COM
mercial centers.
Several years ago, and on many oc-
casions since, the Constitution has call
ed attention to the fact that the agrl-
cultural classes were not the only ones
who would be called on to make sacrl-
fees to the gold standard. In various
articles we undertook to show that, III
the end, the great financial interests
represented in bonds and securities
would be called on to surrender larger
amounts of profits than the gold stand
ard has withdrawn from the produc-
ing classes.
The process predicted-if logical de-
duction can be called prediction-has
already begun, and its beginning has
been marked by transaction of such
magnitude as to attract the attention
of the financial world. This transac-
ton is the refunding of the bonds Oh
the Lake Shore Railway, amounting TO
$4,000. 900. on a basis of 49, per cent.
1t is not a question as to whether the
investors-the holders of the bonds
are willing to have their interest Iunu
practically cut in two. 1t is ques-
ton of accepting half or getting none.
That is what the refunding scheme
means. Financiers cover the scheme
under the polite name of "refundlng'
but the transaction remains the same.
The road says to it's bondholders; Il
can pay you 31h per cent. interest. You
will have to accept it or get none.
The investors grunt and groan ana
growl. but they are compelled to ac-
cept. Their interest returns are cut
in two. s4
bTuuSlIetl = MCCNil PNDt4Ne@NAO-
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 and public policy, declared that
the obligations of the Government are
nayable in gold alone. That was the
''pivotal movement" and the cutting
down of the interest fund of corpora
tons. which has begun on so large a
scale, is simply one of the many ana
far-reaching results.
1t is an easy matter for editors whose
opinions and views are nodded entire
ly by their surroundings to mistake
effect for cause. The Lake Shore trans
action is just as pivotal as the stu
pendous fall in prices since 1872 has
been-no more, no less. 1t is an an
nouncement that the holders of the
bonds of American corporations vii
hereafter be compelled to content them
selves with half the rate of interes
they have formerly received. Prices Eel
and the producers of the country have
had to content themselves with less
than one-half their former returns. Th'
rate of interest has fallen and invest
ors will have to endure the conse
quences.
All these things are the logical, thu
inevitable result of the currency 'sys
TEN which these investors have caused
TO be established. When it is fully ant
firmly established SHOULD that misfor
time be in store for the country tn
bondholders will discover that the pro
ducers of the country will not be til
only ones to suffer. They will find tina
they have practically killed the COOS
that has been laying their golden eggs
The Lake Shore transaction calls re
newed attention to the fact that duI
ing the next four years twenty-nin
railway systems of this country wi
have bonds maturing to a total pa
value of 1929, 100000 in round nun
bers. The larger proportion of theS
bonds bear interest at 6 and per cen
The total annual interest charge whic
the companies have to pay amounts
S14.5OOOOO in round numbers. b
tween 1901 and 1905 twenty-nine othe
roads will have maturing bonds to til
amount of $262, 100000, on which til
annual interest charge is not less tina
S16OOO,0O0. In nine years, therefor
railroad bonds amounting TO 100000
600 and calling for annual payments {