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wide and disastrous experience in connection with political jobbery, and on the whole would rather not offer new temptations to the energy, shrewdness and capacity for intrigue which are incident to politics when considered as a profession.

Although therefore many competent thinkers desire the assumption of railroads by the Government, it is, in the writer's opinion, improbable that such a result will be accomplished here, so long as internal peace and the quiet growth of national prosperity are comparatively free from the violent disturbances incident to socialist feeling. It has been noted above that, while this pestilent and unfortunate impulse is certain to make itself felt here as elsewhere, America's powers of resistance are at least as great as those of any other civilized country. If it be true that the “Granger" States represent the dynamite element in connection with American prosperity, it is impossible to forecast with accuracy what embarrassments the action of a dissatisfied and disappointed section of a community may eventually inflict on the law-abiding creators of American wealth and prosperity. But the signs of the times point to the conclusion that the better instincts of the whole people are pledged to the maintenance of the American Constitution.

Let us suppose then that a great deal of foreign money is hereafter invested in American railroads. The chances would seem to be that no assumption of them by the Government will take place within the horizon visible to the average investor of to-day; and that, if such a result should take place, his rights will be respected and compensated as fairly here as in the older European countries. -The outcry of the people against railroads, which have greatly contributed to their welfare, will always be a useful instrument in the hands of the demagogue; but it lacks the salient feature of natural and easily recognizable equity. Nobody denies that, if it had been possible to lay out the railroads of any highly populous and civilized country on comprehensive principles involving central unity and organic symmetry, friction and waste of power might have been indefinitely reduced. But, as no government could have stability or foresight, nor any generation of men material resources, sufficient to justify, so gigantic an undertaking, it was left to private enterprise to accomplish the task by piecemeal methods, as best it could.

Having regard to the profit which, since the creation of railroads on a large scale, has rewarded ordinary risks in commerce, trade and manufacture, will any thoughtful observer seriously contend that an average interest of some 41% on invested capital is an excessive compensation for the extraordinary risks incurred in the construction of railroads? Extraordinary risks, accepted for a very ordinary compensation and enuring in a most remarkable degree to the public welfare, give rise to equities which, as between railroad companies and the Government of any country, are entitled to most careful consideration, and in the long run are likely to receive it.

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CHAPTER XVII.

GEOGRAPHICAL DIRECTION OF RAILROADS.

AMONG other elementary enquiries, our visitor may probably ask whether the geographical direction of railroads has, from the investor's point of view, any bearing on their present and prospective success; and if so to what extent and for what reason. Any attempt to answer such a question exhaustively would of course exceed the scope and limits of the present notes. Nor has our enquirer any intention of burthening his own note-book with cumbrous tables of statistics. To state in detail the figures which indicate the progress of railroad enterprise in America would virtually amount to a record of the progress of her internal trade. Railroad history, in short, affords something like a rough standard of internal business,-recording in general outline permanent growth, temporary depressions, and temporary recoveries. For any exhaustive discussion of this subject the enquirer will properly refer to recognized text-books. For the present, the practical question is this: Can he derive any useful suggestions from a rapid and superficial survey? Possibly one or two leading conditions connected with the situation may be worth noting.

The tonnage which is annually moved from the Western States to the Eastern seaboard is enormous in its dimensions. But the periods during which the movement of this tonnage continues are unequal in duration and somewhat uncertain in their incidents. Take, for example, a very favourable stage in the commercial history of the great East-and-West roads. Let us suppose that a plentiful harvest has been gathered in by those American States which produce grain and meat in extraordinary profusion. Let us suppose further that there is an immense demand in Europe for imported food. It follows that the period which covers the moving of the crops from Western farms to the Eastern seaboard will tax to their utmost capacity the resources of railroads running due east and west. To accomplish this service with effect, a vast aggregate of rolling stock is an absolute necessity. No railroad which is not in a position to fill large orders for transportation can reasonably expect to hold its own in a keen (and occasionally unscrupulous) competition.

In order to comply with this condition, it is necessary to maintain an amount of rolling stock roughly adequate to the demands of maximum pressure, and therefore greatly in excess of the demand which will exist during the relatively inactive months of the year. If the transporting company is the absolute owner of its rolling stock, it must take account of interest on capital invested therein; also of the cost of repairs and maintenance which are appreciable items of expenditure. If the company hires its rolling stock, it must reckon with the amount paid for car hire; and this too involves serious outlay. To very long hauls during periods of high pressure delay and detention are inevitably incident; and detention in a state of inactivity means suspension of earning power in respect of the cars so detained. Then again the gradual building up of manufacturing industries in the large cities of the Middle and Western States enables those cities to supply a liberal share of the necessaries of life, which were formerly transported to the far West from cities in the neighbourhood of the Eastern seaboard. It results that the car which makes a long haul from the far West to the Eastern seaboard is not only liable to considerable delay and detention, but is very apt (if the familiar bull be permitted) to “ load back empty.”

Under these conditions it is worth while to consider roughly what are the annual net earnings of a vast aggregate of rolling stock. Granting that each car earns a good deal of money during the moving of the harvest, what is its average earning on the work of the whole year? The result is perhaps scarcely as satisfactory as might at first sight be anticipated. So vast is the annual tonnage moved from the West to the East, that-in spite of the immense supply of transportation and extraordinarily low rates—there is amply sufficient to make a fair profit for a certain proportion of competing lines. Those which are intrinsically the strongest and best managed will no doubt continue their career of success. But, to enable them to accomplish this result, the weaker East-and-West lines will probably sooner or later suffer a severe discipline. If there is barely enough to go round and the stronger take the lion's share, the prospect of the weaker must always be a matter for careful consideration,-possibly even of apprehension,-from the investor's point of view. There are indeed optimists who hold that the traffic between the remote East and West will shortly grow up to the existing supply of transportation; and, even at very low rates, make every East-and-West road a paying concern. In this view the writer does not concur. It seems not improbable that, with very modest rates, the business of the East-and-West lines would suffice to pay a fairly liberal rate of interest on all the capital really and economically

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