The herald and news. [volume] (Newberry S.C.) 1903-1937, 1907-07-19
FERTILIZATION OF RAILROADS
fhe Railroads of the United States
6 Are Not Over Capitalized as Com
81 pared with Those Of Other
81 Countries.

' VI l"ll"ay capitalization.
'Presldent Roosevelt, Attorney Gen.
eral Ponaparte, and the Interstate
C"mm@ree Commission are studying
the question with view off arr;v;n"
at definite plan TO be presented 70
the nationS law-making body when
it convcncs &&e first Monday in De-
ccmbcr. Pres ,*n.t, Roosevelt ond
Chairman Knapp, }pfsthe Interstate
Commerce CommiSsSm, have declared
that there is no fohndation for the
claim that our railv aSs are over CAP
italizcd, and there ls little doubt that
sane and just plan for the control
of capitalization in the future will bc
formulated by those having the mat
ter i'll charge. The plan presented will
undoubtedly be based upon lines guar
anteclng justice to both the railroads
and TO those who use them and invest
i'll their securities.
In view of the fact that much mis-
information on the subject of railway
capitalization has been diffuscJ
through the medium of yellow Jour
nails 1t has been deemed advisable to
consult those who have given the
question much thought in order that
the public may be advised of unim-
peachable information relating to this
great question. With that object in
view Prof. Fl. T. Newcomb, one of
our greatest ana most learned ccono-
mists and statisticians. has been ask
ed to communicate through the press
OF the country his views on the sub
ject.
Professor Newcomb, in speaking of
the matter, gave it as his opinion that
there are few subjects relating to the
industrial life Of the American peo-
pie upon which so much misinforma
tlon is current or concerning which
there is such widespread misunder-
standing as that Of the capitalization
OF American railways. This is unfor-
tunate for not only is the direct own
ership Of railway shares and bonds al
ready greatly diffused but they would
constitute, if mwise legislation could
he avoided, the most staple and salts
factory investment generally opened
~ those whose moderate incomes, as
Frmers, artisans, or clerks, permit on
~ small accumulations. With the as
surance against unjust interference
(which would result from full public
comprehension, The existence of such
: ready means Of investing small say
!ngs would once become the greatest
flncentlvc to economy and frugality.
1t Is unfortunate, also, because such
misunderstanding is constant threat
against the security afforded by the
billions of dollars of railway bonds
and the smaller quantity of railway
shares that arc held in the treasures
Of savings banks, life insurance COM
panles, fire insurance companies, and
bonding guaranteeing companies, and
on which depend their. ability TO full
fill their obligations to millions Of
American citizens. Further than this,
1t is unfortunate because it is one Of
the causes which is depicting the
none ymarkct Of capital seeking in
vcSiment in railway enterprises, in
crcaSinG the difficulty of obtaining
lnds tor new construction and for
renewals and improvements and bring
lng about a rise in interest rates that
must prove a burden to the industry
OF the nation. Misundcrstandin" has
not occurred because the subject is
necessarily obscure or attended with
dllliculty, for it is neither. The In
terState Commerce Commission has
published eighteen successive annual
volumes of railway statistics, the Cen
suS Office has devoted volumes and
folio pamphlets to the same subject
and there are many private publica-
tons that are reliable and valuable.
Whoever will study the subject with
intelligence and without prejudice
Will, from the materials thus avail
able, be able to reach an accurate con-
clusion.
The latest statistical report issued
ny the Interstate Commerce Commits
sion covers the fiscal year which end
cd with June 80, 1905. At the end Of
that year the railways Of the United
AStates had an aggregate length of
a2lS,lol miles, Of which 217,01S miles
: were covered by reports to the Com
mission. The total capitalization of
the reporting railways on that date
was $11 ,167, 7,105,992 or at the rate of