People's Pilot, Volume 6, Number 36, Rensselaer, Jasper County, 25 February 1897 — RAILROADS AND FINANCE. [ARTICLE]

RAILROADS AND FINANCE.

Some Brief Remarks Suggested by Current Events. It is asserted that railroads don’t pay. This is one of the reasons given why the government should not engage in the railroad business. It is also urged as a reason why rates should not be reduced. Notwithstanding this, however, there seems to be a keen desire on the part of those who own the railroads to hold on to them. • • * Take the Pacific railroads for instance. They are covered with a first mortgage loan of §60,000,000. In addition to this they owe the government §120,000,000, making a total of §180,000,000. No one pretends to believe that they cannot be duplicated for a less sum of money, yet the companies are anxious to retain them and promise that if the mortgage is not foreclosed, they will pay off this entire Indebtedness. * * * President Cleveland informs us that he has the assurance of capitalists that in case of foreclosure, bids will be made to make the government safe on its investment. We very much doubt this. There is a possibility that in the foreclosure process there may be a dead African in the woodpile. Unless the government intends to make a bid to protect itself there is a chance for it to lose every dollar of its claim. In the interest of good business policy it should do this, and if it fails to do so there is room for suspicion of collusion and fraud. * * * In the light of Mr. Cleveland's past transactions too much confidence should not be placed in the zeal he displays to the end of a settlement of the Pacific railroads’ edaim. It cannot be forgotten that the negotiation of the $62,000,000 bond deal with the Morgan syndicate, through his former partner, left a cloud of suspicion on him that excited much comment at the time. Dispatches inform us that two syndicates have already been formed for the purpose of buying in the roads provided they are put up at public auction. How are we to know that Mr. Cleveland is not financially interested in these syndicates along with other government officials?

* * * That would most certainly be a brilliant scheme, and some things begin to point to its consummation. It would be necessary to have two syndicates to bid against each other (ostensibly) to give the sale the appearance of being conducted legitimately. After all this may be just what the companies want. It was stated in this discussion of the Huntington bill that the terms were not as good as the Union Pacific Company had offered. It is possible that they were made purposely to secure its defeat, and to the end of settling the matter by foreclosure. No sane person believes that a syndicate of capitalists will bid more for the roads than they are worth, and they are not worth $180,000,000. As the $60,000,000, most of which is said to be held by the present owners of the road, take precedence to the government claim, it looks like Uncle Sam may be left out entirely, unless he exercises the wisdom of a business man and protects himself by putting in a bid. » v * There is, however, in the situation one ray of hope for the people. If the government secures possession of these roads it will prove the entering wedge against private or corporate ownership of the means of transportation. It would be a step, and an important one towards the gradual acquirement of all the railroads, and government operation of the same. To prevent this it is possible that the railroad capitalists in the United States would even outbid the government in the sale of these roads. For this purpose they could afford to pay more than they are worth and they might possibly do so to defeat government ownership. But to compel them to do this it would be necessary for the government to bid the full amount of the railroad indebtedness. However it ends, the settlement of this question with the discussion incident to it, is likely to give greater prominence to the transportation problem during the next four years than it has ever had before, and will likely make it one of the principle issues of the next presidential campaign.

The recent sound money convention at Indianapolis is one of the straws which indicate the most prominent issue in the next campaign. There was no talk in that convention of international bimetallism. It regarded the silver question as settled and now sets itself about the task of determining by legislation the form and character of our paper money. It should be observed that the advocates of gold are not opposed to a paper money. On the other hand, they believe that the greater part of our currency should consist of paper. But they are opposed to government paper money, and boldly announce that the government should go out of the banking business. For the same reasons they might, and perhaps will before a great while, oppose the system of government postal money orders, as they take the place of bank checks and exchange. The fight is on, and as Benton once said, “The bank is in the field.” It is the same issue of the banks against the people, and the question involved is whether the people shall issue and control the currency and business of the country, or whether this power shall be delegated, to the

banks.

W. S. MORGAN.

A gold standard is for the benefit ol the few.