The Minneapolis journal. [volume] (Minneapolis, Minn.) 1888-1939, 1906-05-06
How Railroads Were Built.

SENATOR LA FOLLETTE'S three-day speech
will be found mine of information upon the
railroad question for some time to come. He seems
to have studied many phases Of the problem. One
OF the most entertaining Of his chapters is that
public aid to railway construction. eve frequently
hear it urged, - he said, 'that railroad should
be allowed profit more than the actual invest
ment because of the risk they assumed in buding''
This contention, he claimed was unsound because
IN majority of the railroad builders did not
assume the risk That was assumed by the
munities in which the roads were constructed. One
conspicuous instance of this is the Milwaukee sys.
tenn, of the most extensive and powerful rail
road systems in America. Senator La Toilette called
to his aid in his criticism of the manner in which
this road was financed, railroad witness, John w.
Cary, general counsel and historian of the road Of
the projectors Of the first line of the Milwaukee sys
tenn, Mr. Cary writes They were active, ener-
getic men, but without money! Obviously they
did not assume the risk.
What they did to project the road, paint it's
advantages to the towns and farmers and ask for
bonds About the first step taken toward the con-
struction Of the Milwaukee & Mississippi the first
" line of the Milwaukee system, to induce the
city of Milwaukee to issue bonds The Milwaukee
Fond du Lac began business on the credit Of $l14
900 extended by the city. Other bond issues were;
100000 for the Milwaukee & Watertown; 100000
for the Milwaukee & Horizon; $550,O00 for Mwau-
1kee & Mississippi extensions. Nor thisaall The
agents OF the railroads went among the farmers and
induced them to subscribe for stock, giving their
notes secured by mortgages on their farms. Deacon
linton, observe that this work is generally given to
a"deacon,' who employed as a director on
the La Crosse road devoted all his time to getting
subscriptions from farmers on this PLAN The
farmers got stock which they had agreed to
waive the dividends and the road agreed to pay
the interest their notes until they came due Mr.
Cary adds: cit is needless to say that this stock
proved worthless and that the farmers we're COM
PEELED to pay their mortgages and in very many
cases lost their farms. s52>.*s....., ~ @&=
Senator La Toilette estimated that of the $13,-
000000,000 supposed to have gone into railroad con
struction the public, thru land grants, bonds and
bonuses, contributed 5000 100000 The amount of
public land given to railroads amounts to 100000
600 acres enough to make five states the size of
Pennsylvania. Besides, the census Of 1870 showed
there were still outstanding Of county bonds issued
in aid Of railroads, $185, 100000. This does not
make any account Of state and city bonds issued
for like purpose. o. lux. ~ r. -"
The country wild for railroads and took tt
it's heart any one who would promise to build one
The reaction and many Of the roads went thrr
the hands of receivers. Then the principal asset
was the farmers notes and the municipal bonds
The public put 50 much into the railroads in thu
public ought to be excused from listening further
to the argument for high dividends Fon accom-
of the risk. -