The Grenada sentinel. [volume] (Grenada, Miss.) 1868-1955, 1922-05-05

agrees to pay four per cent annually
The interest at maturity for these
loans will aggregate $817,525,00O, OF
almost $500 for every 500 borrowed
on top of which the company must
pay back the principal.
This is not an isolated Ease for a
compilation of IL leading railroads
show they borrowed 81, 636,1O1,13O
with no sinking fund or callable fea-
ture for which they agree to pay S.
949,245,017 in interest in addition to
repaying the principal.
ut is a saying in some quarters
that railroad bonds are never paid at
maturity but are refunded with a new
issue of bonds. Under this method
interest is still being paid on money
borrowed when our fathers were
young men and which will not ma
ture until our hildren are old men.
1t is almost certain in some instances.
If not many, that the rails, ties and
equipment which were purchased with
this borrowed monev will have been
entirely worn out and replaced two
and three times and not so much as an
original spike left when the debt is
paid.
1.-THE statistics all show that the
borrowing and lending of money is
steadily increasing. New capital is
sues, consisting of bonds, notes and
stock, amounted to S2,634, $4,000 in |
1921. The total for the past 10 wears
amounted to $20,59O, 100000 ex-
elusive of war and government loans.
The need for additional borrowed cap.
ltal was indicated at a hearing of the
Committee on Ways and Means of the
House of Representatives at Washing
ton on January 16, 1922. when Philip
Il. Gadsden, chairman of the jolt
tax committee of several public utili-
ty associations, estimated the annual
needs of the public utilities at $780,
OO0, 900, the telephone and telegram
at 100000 900 and the
steam railroads at $1,000, 0O0, 900, or
a total of 81 ,S5O,000,0 900 of new cap
ital per year. This is exclusive of
$4,000, 600, 600 which railroads, &C.
cording to their officials, need at
once for rehabilitation and also ofthe
needs of manufacturers, mercantile
industry and municipalities. The
Of debts is emphasized by
statistics which show that in
crest payments of 146 cities ms
creased 1927 per cent between 1903
and 1919.
IAN interest charge is a fixed
,harge and its lack of ~iexibility makes
7 impossible to adjust it to constant
y changing business conditions. A
corporation may be earning several
It's interest charges when a new
bond issue is hoated only to find that
a business depression the non
ieXlble charge becomes a burden
which it cannot sustain and bankrupt
y is the result.
1.-The question as to where the
;ustom will lead US if it is not stopped
)r at least, abridged, may be con as
1 serious oEe. The annual interest
are steadily increasing and
here is nothing to indicate that any
,hange may be expected in the near
'uture. In fact, the demand for loans
It this time probably is greater than
1t any time in the past. This steady
Increase carried over a considerable
period of years can only lead to in
'reased cost Of living, greater efforts
o meet the greater expense and a
ilvlSlon of the people into two classes
e-those who pay the interest and
hose who clip the interest coupons.
electric railways at same time
lad bonds out of $3,$5O,179.272 up-
From the above it will be seen that
total interest paid by the United
states government, and what is owed
" states, counties and municipalities
Ogether with what is owed banks and