The Fairmont West Virginian. (Fairmont, W. Va.) 1904-1914, 1906-09-05

sRYA IRIS AplsoN sauARE GAR.
DEN SPEECH HAS CHANGED
TIE SITUATION en-.
TIREEY.

The New York Times, strong Dem
ocratic paper says:
Mr.. Bryan cannot complain If in the
forum OF human reason. II nowhere
else, he. is held responsible for his
utterances. 1t would be insulting to
him II 1t we're assumed that he is talk
ing fast and loose about public owner
ship of the railroads without having
counted the cost or formed the plan.
The public to which he appeals, and in
particular the Democratic party, has
right to demand of him promptly
some detail and specification. a full
Exposition, in fact Of the method by
which he would effect the transfer of
title in the railroad properties Of the
country to the Federal Government
and to the States.
Meanwhile the magnitude and the
complexity of the undertaking to which
he must apply himself may be briefly
Indicated. In his speech as he wrote
lit, though we believe not in his speech
as he spoke 1t, Mr.. Bryan said that the
government would either acquire the
existing roads by purchase or would
build its own trunk lines. Probably
it would not make world of differ
ence whether 1t bought or built; the
cost in either case would be enormous,
and we are inclined to think that on
ripper consideration Mr.. Bryan will dis
miss the idea OF building. In public
ownership discussion it has usually
been suggested that the government
would exchange Its own bonds for the
existing securities of the railroads 1t
has sometimes been asserted that
these bonds would have no other Sc
curity than the property and the earn
ings of the roads, so that whatever
the amount of the Issue it could not
be considered an addition to the Ma
tional debt. This suggestion may be
dismissed at once for the reason that
The present owners of railroad bonds
and. shares would not accept in ex-
change bonds Of the government I'M
less the faith and credit of the gov
eminent were pledged to the payment
Of the principal and the interest there
on. They would not be justified in
giving up per cent. bond upon
which under private management
interest was regularly paid and ac-
cepting therefor security having no
other basis than the expectation that
government operation, an untried ex
pertinent in this country, would be
uniformly and to the same degree sue
cessful.
It will have TO be admitted that
public ownership of all the railroads
would add to the present outstanding
debt of the Federal government and
Of the States sum equal to the entire
purchase price Of the railroad prop
critics. The total assets of the rail-
roads Of the country amounted in 1904
10 sum in excess of fifteen billions.
Their total liabilities, including capital
stock, bonded debt, unfounded debt.
current accounts, and sinking and
other funds, amounted to $14,S02.122.-
14S Leaving out of account every
thing except bonds and stocks, the
Federal and State governments under
Mr.. Bryan's plan would have to ac-
quire shares OF capital stock amount
Ing to $6,4i7. 045,374, and bonds to The
amount OF $T,475,S10, 1908. What should
be the interest rate upon bonds given
by the government in exchange for
these securities? The total distribution
In dividends on stock in 1904 was
$1SS, 386,093, which is equal to 80 per
cent. upon the total outstanding capt.
tai stock. But while some railways
pay 10 per cent, or more, others have
for years paid no dividends on their
common stock. Shares on which large
dividends are paid command a high
price in the market-Great Northern.
for instance, sold on Saturday at $50.
But the non-divtdend paying shares OF
many roads nevertheless command q
very steady price in~the market. The
government would have to give some
hlnE lot lnem' III lSVf tue IdtlIV1uH
paid $242,992.755 in interest on bonds.
equal to about 1925 per cent. per an
nun on the entire bonded debt. In
Justice and equity the holders OF
these securities should receive from
the government bond that. meas
uretl by market value or by annual
return. would be fair exchange for
what they now have. How would
Mr.. Bryan figure it out. 1t might be
easy enough to satisfy the holders OF
Great Northern shares by giving them
bonds enough to yield an annual re-
turn equal to their dividends. But
what would be done, say, with the
common stock .: the Erie Railroad,