there have been put on the market railroad bonds for the additional amount of $2,800,000,000, forming an immense aggregate of $6,236,638,749, equal to nearly $88,872 per

mile.

We have heretofore shown how stocks are watered. Allowing these figures to be correct, the difference between the cost, as reported by themselves, and $6,236,638,749, would be about $2,800,000,000. Mr. Cloud, however, from an actual examination of the cost, as reported by the engineers of the various roads, puts the actual cost at $35,000 per mile, or a total of $2,456,230,000. According to these figures, the actual total of watered stock would be $3,780,408,747.

Cornelius Vanderbilt, of the New York Central, and "Colonel" Scott, of the Pennsylvania Railroad, represent about $1,400,000,000 of this stock, and a handful of men, comparatively, control almost the entire amount. These are the men who control market values, and by a stroke of the pen in their offices, cause to be flashed along the wires what the farmer of the West shall receive for his grain, by commanding the superintendents of these roads to put up the tariff five or ten cents per bushel.

In their strongholds, entrenched behind the power of their ill-gotten wealth, they control the government of States, and under the present system of election, could make a President of the United States, by buying up a majority of the Presidential Electors; that is, allowing the price of these men to be about that of the modern Congress

men.

CHAPTER XLI.

GOVERNMENTAL OWNERSHIP OF RAILWAYS.

ITS CORRUPTING POWER.

One of the most chimerical schemes, though plausible on its surface, for regulating the inter-state transportation of the country, is the proposition that government shall buy and work the railroads of the country. This idea is a great pet. with those who have plundered the people of untold millions, through the sinking in their own pockets of the local aid secured in building their roads, and who have gobbled up immense tracts of land obtained through corrupt legislation, and other nefarious plunderings. If the railroads of the country with their fictitious and inflated stocks were to be turned over to government, and bonds taken therefor, what a vast debt would be created, to be added to the load now borne by a people already taxed far beyond the limits of patient endurance!

Let us imagine the situation with the scheme actually consummated: The interest on the lands must be paid; the salaries of the officials-and they must be experts-must be paid; the system must be extended; the wear and tear must be made good; machinery, buildings, and the thousand and one etceteras, which none but a railroad expert can even name, must be provided for; defalcations and peculations would constantly occur; there could be no rigid economy

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THE COST OF RAILROADS IN THE UNITED STATES.

485

practiced; the whole railway system would soon fall into confusion; and worst of all, there would be a centralization of power in the hands of the government, such as would imperil, and probably subvert, the whole fabric of American liberty.

THE COST OF RAILROADS IN THE UNITED STATES.

The figures involved in the proposition of governmental purchase, etc., are really stupendous. According to Poor's Manual for 1873, there were in operation, the year previous, in the United States, 57,323 miles of road. These are represented as earning, net, 5.20 per cent. on the cost of the roads, and 3.21 per cent. on the capital stock; but, while some roads earned nothing or actually ran their owners in debt, other paid large dividends, and all of them paid large salaries to officials; we do not say larger than the same class of men could command in other business, and certainly not larger than government would have to pay the same or similar class. Even if the roads were as economically run as at present, no relief would be obtained, for the interest on this vast sum must come out of the people at last.

The net earnings of the 57,323 miles of railroad in the United States were, according to Poor's Manual, $165,000,000; the cost of the roads is represented by the sum of $3,173,076,923. The following table will show the nominal stock of some of the principal roads of the country, the dividends paid, and their general indebtedness:

WATERED STOCK.-NEW YORK CENTRAL.

487

WATERED STOCK.-NEW YORK CENTRAL.

As an instance of what the people would have to pay in case the government should buy the railroads of the United States, let us take the New York Central and Hudson River Railroads, which affords a prominent example of watered stock.

Two years ago, Mr. Rufus Hatch, a broker of Broad Street, New York, issued a number of circulars in relation

Farm Scene.-The First Snow.

to railroads, which, it is fair to presume, were intended for speculative purposes. In his first circular, he said that, at that time, 1871, there were 50,000 miles of railroads in the United States; the cost of which exceeded $2,000,000,000. The earning of these roads exceeded $400,000,000 annually, or eleven dollars per head for the entire population of the country. This would give the average cost, per mile, at $50,000, from the railroad stand-point.

Just how the New York Central was manipulated to pay dividends on a large and fictitious capital, we propose to let