The Abbeville press and banner. [volume] (Abbeville, S.C.) 1869-1924, 1915-06-09

their money IN exchange lor llIlo-
graphed scraps Of paper which,
though purporting TO be securities"
are in reality insecurities. Some Sc
curities are being sold, but in all but
few instances they r being sold to
replace existing ones. They evil
dence no increase of obligation. 1t
is a mere exchange of new for old,
and the transaction effects merely a
temporary easement of embarrass-
ment rather than an enlargement of
abilities of the railroad. And there
is a further and highly significant cir
cumstance attending these refundings
of existing Indebtedness. 1t is that
the new bonds, in most cases, express
a higher rate of interest than the old
ones. This phenomenon, occurring
at a time when money is the most
plentiful commodity the country has,
attests the misgivings of those who
grant this accommodation. Interest
rates of new securities ought to be
lower than those of the old ones; but,
for the most part, the reverse of this
is true. and by so much as the inter-
est rates of the new bonds exceed
those of the old, we have the meas
ure of uncertainty that has grown
up in the minds of investors as to the
future solvency of the roads. 1t is
the premium they demand in consld-
Grafton of the risk which they con-
ceive themselves tor take when they
buy these bonds. 1t is not wholly
an investment that they make IN
these cases. 1t is partly a specula-
ton, and the increased interest rates
are the odds which they think the
hazard entities them to.
Now if the supply of capital, al
ready diminishing, should become
dried up-and that prospect threa-
tens the railroads-then it is evident,
even painfully palpable, that either
the country's commerce must limit
it's growth to the transportation ia
c~ilities, or the Government whose
credit is much better than that of the
railroads, must supply the capital
that investors decline to lend to the
railroads. Hence, it is no prophe-
CIV, but the mere statement of a logl-
cal conclusion, that Mr.. Underwood
makes when he declares that unless
we allow the railroads to earn enough
to re-establish and maintain their
credit they will shortly sink into a
state of debility from which only the
heroic prescription of Government
ownership will revive their.
But one might, at least o. technl-
cal grounds, demu.: 70 Mr.. Under
wod's further statement that the pre-
sent condition, an! the much worse
prospective one, are the consequence
of regulation. Strictly speaking, We
have not teen practtci, + a policy of
regulation. What We have been pr.:c-
ticing is a policy cf repris"l. The
railroads have been put. AMI ;r a
long time kept, On a die TIM enough
to cause the debility they suf,r. and.
if continued, the emaciation that
threatens them. But it has been &
kind of lenten fast imposed on them.
one, not of forty days, but of ten
years at least. 1t has been a lenten
fast, because we have imposed it
more largely than we have been con-
scious of as a penance for the sins
the railroads were guilty of in the
days of their freedom from restraint.
Our many and variegated Railroad
Commissioners were meant to be, in
part at least, judicial bodies, as OBJ
ligated to conserve the rights and
welfare of all the interests connected
with railroading the people who
run the railroads, the people who
furnish the money and the people
who use or need the railroads. But,
in actuality, their members have act
ed, for the most part, as if they con
ceived themselves to be the attorneys
of their creators and constituents,
the people, as detached from all
other elements of the problem. Ami
mated by that spirit, and perhaps
more largely so than they have at all
times been conscious of, it was inevi-