ME. HOOTON ON RAILKOAD ABUSES. 357 



terrible before they can be made to disgorge $2,000,000,000 ; and to 

 remove these false stocks from the business of the country will nec 

 essarily cause a great commotion. But it must be done before we 

 can have a solid basis of finance. 



But this terrible ordeal once passed, a great reward may be ex 

 pected for all pains. Money will cease to go to the Northern Pacific 

 or any other railroad that will not pay interest on the investment. 

 It will cease to be hoarded for speculation in fancy stocks. The 

 money of the country will be used in legitimate trade. It will be 

 sufficiently abundant to enable dealers to pay fair prices for agricul 

 tural products. 



When we have passed through this crisis, we may be expected to 

 enter upon an era of prosperity scarcely equaled in our history. But 

 before this good time can be fully realized, the voters must see to it 

 that every office-holder, whose hands are tarnished with monopolies, 

 Credit Mobiliers, salary-grab, back pay or forward pay, is finally 

 retired to private life or the penitentiary. Reforms necessarily move 

 slowly when the officers of the government may be bought and sold 

 like cattle in the open market. 



In conclusion, I wish to call the attention of the Convention to a 

 term just now becoming very popular in connection with railroad in 

 comes. All parties agree that the owners of these roads are entitled 

 to a &quot;reasonable&quot; income on their real investments. The chief 

 difficulty seems to be in determining the basis of reasonableness. It 

 is plain, from what has been said in regard to the relations of pro 

 ductive and non-productive investments, that, as the producers of the 

 country must pay the income on the non-productive investments, 

 that any rate which exceeds the producer s rate of income must be 

 unreasonable. 



Therefore, if, when the country is specially unprosperous, and the 

 industrial interests suffer loss, the capitalists rates of income on cash 

 investments become so that he suffers loss in sympathy with the 

 general adversity, he has no right to complain. 



This is the only true basis of reasonableness, the adoption of 

 which in my opinion can save a nation from financial convulsions. 

 It is claimed that the legal rate of interest should be accepted as 

 reasonable. But it is plain that this may be too high or too low, as it 

 is entirely arbitrary, and has, therefore, none of the elements of rea 

 sonableness in it. 



