El Paso herald. (El Paso, Tex.) 1901-1931, 1912-08-31

49, ASHINGION, d. e, aug. i'll
Af Problems of the government
w IN Mexico growing out of the
i~,UlCtion are multiplied and intensi-
fled by the character Of the owner
ship of the majority of the railroads
of the country. The government has
a varying degree of interest in all of
the railroads of the nation The road
from Vera Cruz and Cordoba to the
Isthmus of Tehauntepec is owned By
the government outright, and is oper-
ated by it as a part of the National
railways. The country through which
this road passes has experienced lit
tie trouble as far as the revolt against
Madero is concerned. The road across
the Isthmus of TehauntePcc is owned
outright by the government, which ex-
pended so much in the building Of the
road and the port works at Salina
Cruz and CoatzacoaIcOs that the gros.
earnings do not suffice to Ilcet the
fixed charges. 1t is operated by a
partnership company consisting of the
firm of Sir Weetman Pearson and the
government of Mexico as equal part
ners. This road has not been hit very
hard by the revolution, since most OF
its revenues consist of the trans
continental traffic brought to the two
sides of the istnmus by the steam
ship lines OF the Atlantic and Pacific.
In the vast majority OF the other
railroads of the country the govern
ment owns a majority of the stock
and thus dominates their policies. Not
long after 1900 il began to look TO the
Mexican government as if some of the
big railroad interests of the United
States were about to swallow up a
number OF the principal roads of the
country, so 1t was decided that the
only way to overcome this danger
would be for the government to buy
up a controlling interest in the roads
Therefore a
lied, in which the government took
$3.50, 004.5SO, of the $3.50, 900, 900 of cap
ital stock. Previous to this the gov
eminent had bought quietly in Wall
Street, a controlling interest in the Ma
tiOnal Railroad company. The latter
gave them an outlet to the Rio Grande
from the capital, by way of Monterey
and Laredo. A little later the Next
can Central. running from Fl Paso,
got into financial difficulties, and the
government wanted to save il. That
was what led to the forma ton Of the
new holding company with the gov
eminent as the possessOr of the ma
jority of the stock Nearly four fifths
now under the ownership of this COM
pany, OF which the government owns
a controlling interest.
Wall street Alert.
But whether the government is
partner in business or not, that bust
ness must meet its financial obliga-
lions. and in the case of this holding
company they are heavy. for. be 1t said,
Wall Street was not asleep when the
deal was put through. The bonds still
draw interest and that interest must
be met. Yet the earning power of the
National Railways has shrunk immeas-
urably. With traffic over d major
part of the line from the capital to
Ell PasO constantly interrupted and
often all but completely suspended,
and with similar situations prevailing
only in a smaller degree in other sec
tons. il will be seen that freight and
passenger earnings must show a de-
cided slump Nor is this all. When
any part of the National Lines has
fallen into the hands Of the revolu-
tionists, they have used il for all IL IS
worth, collecting what funds they
could from its operations.
In addition to this there arises the
question of physical destruction \
dozen times or more large mileaSes
have fallen into the hands of the rebels
only to be rescued by the federals
again \ very large number of bridges
have been repeatedly destroyed, and
great sections OF track have been torn
up. In many cases the rails have
been bent out of al shape to prevent
their ever being used again All this
has fallen heavily upon the govern
meEt lines. and the result is that II
the government does not meet the in
terest charges out of the federal trea-
Sury they Will scarcely be met at all
Wrecked BY Rebels.
The revolutionists, realizing that the
government is the principal owner OF
these railways, have not scrupled to
damage them just as far as possible.
both because il would cripple the IA
cilities for handling federal troops and
because IL would add further burdens
to the already strained treasury OF
course there is one sa"inS feature to
the situation from government
standpoint. The financial interests of
the world have money tied up in the
National Railways of Mexico If the
revolution is successful there may be
difficulty in realizing on those Invest
ments Therefore. it is reasoned. fl
nanciaI aid will be forthcoming for
the purpose Of protecting these invest
ments.
There are a number of Independent
lines IN Mexico, those in the southern
part of the country being English
owned and these in the northern half
being under American ownership. One
of these is the Southern Pacific lines
in Mexico. which lead from a point
in Arizona TO the Gulf of California
harbor of Guaymas. the port which
Orozco aims to capture, so as to have
A port within the revolutionary terri
r,reepnf nd immediate I'm