Aberdeen herald. [volume] (Aberdeen, Chehalis County, W.T.) 1886-1917, 1904-02-08
IMPENDING DISASTER.
Why Are Many of the Railroad.
Borrowing Money?
WALL STREETS FEvERIsH STATE

Republican Prosperity Only Skin
Deep and a Collapse Seems Prob
able-Trust Magnates Responsible
For the Rotten ConditiOn-Ref0rm
H Imperatively Demanded.
There is something rotten about the
financial standing Of the railroads II
the various reports Of their condition
are to be believed. The Interstate com.
ares to show that the railroads have in
creased their net earnings during the
past five years 62 per cent. The annual
statement of the Baltimore and Ohio
for the fiscal year ended June 80 last
shows an increase Of the net earnings
over the previous year Of $2,79S, 30 T..
Yet with this unparalleled increase of
dhe B. and o., which for the month of
June was new high record, the mar
ket price of the stock has declined dur
ang the year 90 per cent. All the rail
road stocks have declined. Chicago
and Northwestern, one Of the Wander
Dilt group, has declined over 60 per
cent during the same PERIOD and this
stock Is looked upon as representing
one of the most stable and conserva-
lively managed roads in the United
States. The Pennsylvania railroad
stock has declined 40 per cent during
nhe present year, and this stock has
been regarded as good as government
bonds, and its net earnings have in
creased beyond all previous records.
The railroads included in the North
ern Securities company, the merger Of
which the administration has attempt
ed to prevent, have a surplus of over
$41 100000 for the last fiscal year, and
yet that stock is rapidly declining in
value. One Of the roads leased by the
merger is the Chicago, Burlington and
Quincy railroad, and it has just Dor.
rowed $5.OO0,OOO, for which per cent
was paid, the loan to run until next
March. The Union Pacific has also
just borrowed $10,O00,OO0 on short time
notes. What possible need can there be
for railroads to borrow money and pay
big interest when they have, according
to their own reports, vast surplus?
There must be something rotten in the
state Of Denmark. Are all these rail-
road reports of vast earnings and their
large surplus tricks Of bookkeeping to
Induce the lambs to buy their stock in
Wall street?
There is no doubt the railroads are
doing more business than ever before
and are charging the public exorbi-
tant rates for carrying freight and pas
sengers. SO they have undoubtedly
earned the increased money and their
expense, have not kept pace with their
earnings.
What have they done with the
money? Have the managers invested
1t in Wall street or loaned it to the
banks, those with which they are con-
nected? Wall street is in bad way
and the New York banks are ineXtrica-
bly, mixed up with speculation. They
are loaded down with vast amounts of
Hndgested securities - the watered
stocks of the trusts and corporations.
The ephemeral prosperity of Wall
street and the New York banks has
t1lrned to tight times that forebodes
disaster.
uuSt VI us w 10 are uUl lutcTcStcu
in Wall street could view the discomf-
sure Of the spectators and the eXtremi-
iy of the banks with composure if it
did not affect business elsewhere, but,
unfortunately, 1t does. Wall street and
ahe New York banks and the railroad
magnates are also the trust managers;
they control directly or indirectly about
1la nrc hn
eSsaries of life. Their tentacles extend
to the uttermOst ends of the United
States. Disaster in Wall street stops
the wheels of commerce. The banks all
over the country draw in their horns
md decline to make loans. Even the
FARMER feels the impending disaster
for he cannot borrow a few dollars to
pay the hired man. The country mer-
chant stops buying goods, and the
Wholesale houses reduce stocks and
the manufacturer and the importer do
n restricted business. Hard times come
on. Real estate is unstable and mort
cages and interest are impaired.
The Republican policy of letting well
enough alone when the impending
panic matcrializcs will be viewed by
the people as letting bad enough alone.
and the cry for reform will be sharp
and urgent. The protection to the
trusts and the millions they have piled
up cannot stem the tide Of disaster, for
IN hard times high trust prices fall
more heavily on the consumer. That
such a revulsion Is coming no one with
his eyes open can doubt. The wise few
will prepare for it; the many will suffer
for their lack of observation. The
tr'~t and railroad magnates are at the
bottom of the impending evil; they
have controlled the policy of the domi-
nant party and have supplied the funds
to keep it in power for their own
selfish ends. The Republican leaders
are responsible; they have had full
swing and must abide by the result Of
their own work.