Montana labor news., 1933-04-20
Helena, Mont, April 10, 1888.

f. j. Edwards, which l request you
to publish in the Montana Labor
News. The article is good and should
be widely read.
It is only the matter of a short
time until the government will take
over the railroads, but we do not
want to take the watered stock with
the roads, therefore we must carry
on a rapid propaganda on the rail-
ways subject.
Best wishes.
JAMES d. GRAHAM.
*ss
Helena, Mont, January 20, 1888.
Senator James Couzens,
United States Senate,
Washington, D. C.
Dear Senator:
| thank you for the very courteous
acknowledgment of your receipt of
my letter of December 29th.
This letter to you is with a hope
of directing your thought to the au-
thenticated histories of American
railroad systems, which may justify
feelings of distrust in all present and
future negotiations, involving loans
to railroads from the public treasury.
Many legal hearings, Investigations
and court trials account for avail
able volumes of testimony, which I'LL
innate embodiment and resultant
chaotic reaction tend to c~orroborate.
Intriguery should not be perpetu-
ated; nor should cupidity be benefic-
tally rewarded. Nor should en-
trenched political power, backed by
intangible wealth, and remnants Of
the formerly affluent class, be per-
mitted to pollute the public treasury
by way of unsecured loans to hold
ers of equities only, in physical prop
critics which are, and always have been
heavily acknowledged.
The public treasury, exposed as it
was, suffered a loss of 1896 millions
of dollars in railroad administration
during the period of 1918-19-20. 1t
follows therefore, that public SER
wants, as lenders of public money,
must be better trained than were the
public servants who operated the
railroads. And particularly, when
facts disclose that the NET gain, af-
ter wages and taxes, under private
management, for the two years
(1916-17) Immediately proceeding,
was the greatest in railroad history,
while the government, with still
greater earnings, after deducting
wages and taxes, lost 1896 millions
during the three succeeding years of
1918-19-20.
If the organized ca~pitalistic groups
that wrecked this country are to be
favored by, and further encouraged
through unsecured loans, there can
be no reason for refusing additional
loans to every over-mortgaged prop
erty owner, urban and rural, in the
United States. That equal oppor-
tunity' may be the rule, and the
conservation of the public treasury,
a fixed tenet, federal loans must be
made on first mortgage security only,
and based upon advances equal to
forty per cent of present valuation,
and coupled with factors of safety
providing for lower proportionate adj
vances, that further decline in values
may be provided for. When loans of
forty per cent or less are made on
personal property, there should be
no prior liens or claims, and the loan
contract should require borrowers to
supply additional securities in the
event of decline in values.
In the splendid article contained
in the Congressional Record of De-
cember %, Mr.. ]. T. Flynn severely
criticizes secrecy, and stresses the i'm
portance of publicity in the matter of
federal loans, as to the amounts and
the names of borrowers. However,
of greater Importance, l submit,
would be the publicity of detailed re-
scription and appraisal of securities
accepted by the Reconstruction FL
nance Corporation, in connection with
each loan, together with a certified
financial statement of the borrower.
Mr.. Flynn referred particularly to
advances made to a bank, a railroad
and to ar insurance company.
If 80 or 80 millions were loaned to
the Dawes bank, the accepted securi-
ties, when itemized, appraised and
published, would apprise the public
Of the money-lending ability Of their