invested in them. But, when the amount of water which has been infused into existing capital accounts is taken into consideration, it may be doubted whether in the future very remunerative interest will be permanently paid on anything like the whole of their present capital, real and fictitious. The amount of this water is, in fact, so great that the prudent investor can scarcely fail to regard it with misgiving. Suppose to-morrow a new East-andWest "bee-line" were projected and laid out with genuine insight and superior judgment; that it were built without a dollar of waste; and that all the economical advantages derivable from the maximum purchasing power of ready money were utilized. Suppose further that the aid of all modern appliances conducive to cheap and effective construction were conscientiously and scientifically enlisted in the development of the enterprise. Suppose that townships and hamlets throughout the proposed line subscribed with fair liberality in aid of the undertaking; and lastly that the new railroad when built was operated from the start on a strictly commercial basis; that its administration had from the outset no speculative complications, no expensive emergencies to tide over and no axes to grind, outside of the immediate interest of the road and its stockholders. Such a line, unembarrassed by water and unencumbered by artificial and unnecessary engagements, would break the heart of the weaker Eastand-West lines, who would surely, in any future war of rates, find themselves handicapped out of the race. The lightly weighted road would make the most of its light weight, and decline pooling arrangements. A scale of rates, which would provide a fair living profit for a new road constructed and operated in the manner and under the conditions above indicated, would starve the junior

securities of existing weak and heavily watered concerns. Whatever might be the volume of existing business at any given time, the road which could best afford to undersell would have the best of the struggle and be the most likely to survive.

Possibilities of this kind must properly be recognized as factors in the conclusions of an investor, whenever he contemplates acquiring the securities of the weaker Eastand-West lines. Whether such a view be well founded or not, it must of course be worth while for the investor to consider the relative claims of lines which run north and south-or diagonally, with some approximation to a north and south direction. Many cities of the Middle States have, in the last twenty years, grown with astonishing rapidity into commercial and manufacturing importance. In exchange for raw material shipped to them from the Southern States, they are in a position to send back a large portion of the necessaries of life which the Southern States do not to-day produce for themselves in reasonable proportion to their capacity and general physical advantages. While it may be hoped, in the interest of the latter, that greater attention will hereafter be given to the production of food, live stock, and the manufacture of articles of commerce, it is plain to the observer that to-day the attention of the South is too exclusively concentrated on certain special resources. Some of these—such as coal, iron and other minerals—the soil produces in profusion and in singularly convenient juxtaposition; and others such as cotton, fruit, etc.—the climate fosters with something like trustworthy assurance of success. The home of the cotton plant is in many instances liberally supplied with the water power to drive the spindle. Coal, iron, limestone and water are found

lying close together within short distances of adequate railroad transportation. The great cities of the Middle States afford a convenient market for the Southern producer of these raw materials. Chicago, Cincinnati, Louisville, St. Louis, and many other inland cities desire new markets for their finished goods, and invite interchange by all available means.

What is likely to be the effect of these conditions on railroads from the investor's point of view? First and foremost, way trade is far more remunerative than through business." Cars, which carry coal to a furnace or cotton to a mill, carry also the manufactured product to a convenient market, and bring back the stores necessary for the requirements of the manufacturing community. There is in short ample material for interchange; and transporting companies load their cars to some extent in both directions at rates higher than "through business" between very distant points will stand. Again, the trade between the North and South is in its infancy, while a good deal of the East-and-West trade has, so far as the profits of railroad companies are immediately concerned, passed into a period of comparative decrepitude. The future of rates on North-and-South lines seems less liable to disturbance from the incidents of severe competition than those of due East-and-West lines. Water transporta

tion, which limits to a great extent the elasticity of Eastand-West rates, operates with far less severity on the strictly inland lines which exchange the raw produce of the South for supplies furnished by the great cities of the Middle States. While the importation of food to Europe is likely to afford for some years to come a fairly profitable business, its conditions are not very stable, nor its remuneration excessive. Railroad enterprises which

depend on this condition to any great extent are liable to serious disappointment.

So far the coloured labour of the South, as compared with the white labour of the "Granger" States on the great East-and-West routes, has been less demoralized by popular agitation; and perhaps on the whole the disturbance of business by prolonged and serious strikes is less probable in the future. In the South the deference paid by the labouring classes to the seditious suggestions of the professional demagogue is less general and less earnest than in the "Granger" States. The writer remembers the time when the " carpet-bagging" demagogue who went South from the Eastern States could command a ready ovation by the utterance of a florid and preposterous stump speech. On the eve of an election he was wont to say to a lazy and thriftless coloured audience that the North "looked to them to inform politics with patriotism, law-courts with equity, and society with refinement"; and he would be greeted by a hearty salvo of cheers. Let him make the same effort to-day, and he will find the result deeply disappointing. When he reaches the climax of unblushing flattery, a good-humoured 'darkey" in the crowd will simply nudge his neighbour and say "he guesses the boss must be going to send round the hat." In short, even in the South, the national humour is to some extent awakened. It is be-. ginning to be dimly understood that nobody ever lavishes fulsome praise on the lowest of the people, except when he wants to use them for his own purposes. The perception of this fact overthrew Mr. Tweed's celebrated Ring. Many patriotic orators had urged with eloquence and ability the rights of the people. But their appeals fell somewhat flat. Mr. Tweed and his friends

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replied, in effect, that they did not care much about the "People" [whatever that phrase might mean], so long as they had behind them a compact and highly organized majority of irresponsible persons. But presently somebody approached the subject from a different point of view. Perceiving the absurdity of the situation, he asked: "Who are these people that impose on us unlimited taxes, expend them for their own aggrandizement, and rule us with a rod of iron? Are they (as Mr. Gilbert's Duke in "Patience" candidly enquires) particularly intelligent, or remarkably studious, or excruciatingly witty, or unusually accomplished, or exceptionally virtuous?" The next enquirer asked: "Do they contribute much to the taxes which they impose? Are they particularly distinguished as legislators, or specially eminent in their scientific or professional careers?" The answer returned was in the negative. It was rendered, not with a howl of moral indignation, but with a subdued sense of amusement, that citizens of responsibility and common-sense had allowed themselves to be so absurdly out-generalled and "got so badly left." Underlying however this subdued sense of amusement was a strenuous resolve not to "get left" a second time, and the downfall of the Ring became a foregone conclusion. It remained for Mr. Nast's pencil to accelerate its funeral.

The gradual awakening of national humour is the knell of the demagogue's trade. It is a very hopeful sign, from the point of view of the investor in Southern securities, that the demagogue cannot accomplish as much in the South to-day as he could some ten or fifteen years ago; nor even as much as he can to-day accomplish among the inhabitants of the "Granger" States, who are made of sterner stuff than the labourers of the South.