RAILROADS IN THE UNITED STATES. 



669 



one-third to one-half, or, in some cases, three-quar- 

 ters, of the capital invested, and even holders of 

 first mortgages are generally glad to content them- 

 selves with 50 per cent, of their investment. This 

 is the natural result of paying high prices for money, 

 labor, and materials, to build roads, where roads 

 were premature, on tne one hand, and of capitalists 

 hoping to lend money with safety at from 7 to 15 per 

 cent, interest, on the other hand. The process now 

 going on is a healthy one, and its effects will be felt 

 in a wholesome caution and careful canvassing of the 

 elements of traffic in future investments. 



That railroads, as a rule, are good-paying proper- 

 ty still remains true, in spite of numerous expeptions 

 of late. This is evidenced by the steady press main- 

 tained for the first-class bonds and stacks during the 

 depression. Take the familiar instance of one of the 

 trunk roads, whose 7 per cent, currency bonds are 

 selling at 125, as an example. The high standing of 

 the Pacific Eailroad issues (properly so called, and 

 not to be confounded with the Missouri Pacific, At- 

 lantic & Pacific, Texas & Pacific, and the like) is 

 another indication of the favor in which good roads 

 are held. The business and crops in California are 

 understood to have been prosperous, while those of 

 the rest of the country are depressed ; hence Cali- 

 fornia, with only one-fiftieth of the population and 

 capital, has built, during the year, a third or fourth 

 of all the new roads in the country, and is still 

 pushing new lines in various places. The Southern 

 Pacific is perhaps the most active of them, on which 

 over 5,000 men are engaged in construction. 



Besides the Erie road, which, is now for the 

 third or fourth time in the hands of a receiver, 

 the most notable disasters have been the Chi- 

 cago & Northwestern, and the Milwaukee & 

 St. Paul, the Toledo, Wabash & Western, which, 

 like the Erie, has gone into liquidation, and the 

 Michigan Southern road. 



The defaults of the railroads in the payment 

 of their interest since the crisis of 1873 have 

 been appalling. These failures have been com- 

 puted from the date of the panic, September 20, 

 1873, down to January, 1876, and the amount 

 of bonds upon which the interest has failed of 

 being paid make a total of $783,67,665, and 

 were issued by 196 companies. Of these $533,- 

 045,115 bonds, issued by 134 companies, remain 

 still in default, unsettled and not foreclosed, in 

 January, 1876. 



The total bonded indebtedness of the railroads 

 of the United States was reckoned at $2,000,- 

 000,000 in the beginning of 1875. The bonds in 

 default still unsettled form about 26 per cent, of 

 this sum, and all those which have passed in- 

 terest since the panic of 1873 form 39 per cent, 

 of the aggregate debt. The history of railroad 

 embarrassments reaches back to an earlier date 

 than the failure of leading bankers in the au- 

 tumn of 1873. This is shown from the fact 

 that not less than $226,425,100 bonds made 

 their first defaults before September 20, 1873 ; 

 $134,684,600, belonging to 37 companies, before 

 January 1, 1873 ; and $91,740,500 bonds, of 35 

 companies, between that date and September 

 20th. The succeeding year there was sad dis- 

 tress among the embarrassed and unstable com- 

 panies. From September 20, 1873, to January 

 1, 1874, new bonds, the issue of 25 companies, 

 to the amount of $150,233,250, went to default, 

 and during the year 1874 $262,366,701 bonds, 



of 71 companies more, failed of their payments. 

 It was expected that the disasters would be 

 over by 1875, but during the year other $140,- 

 448,214 bonds have proved delinquent, belong- 

 ing to 25 companies. It is believed that the 

 troubles are about ended. In respect of the 

 present condition of the companies, 18 com- 

 panies, having $91,549,250 bonds, have settled, 

 by funding arrangements or otherwise, with 

 the holders of their bonds ; 64 companies, with 

 $151, 369,500 bonds, have arrangements in prog- 

 ress, or are suffered to remain as they are for 

 the present; 70 companies, with $381,675,615 

 bonds, are now in the courts, though many of 

 them expect to settle or reorganize without 

 going to foreclosure ; 44 companies, with $159,- 

 373,300 bonds, have been foreclosed, or have 

 surrendered their affairs up to their bondhold- 

 ers, and have been reorganized. The amount 

 of the defaulting bonds owned by foreigners is 

 estimated at about $251,000,000, or 32 per cent, 

 of the total, to $532,967,665 of the total $783,- 

 967,665 held in this country. The above com- 

 putation does not include either those compa- 

 nies which have only temporarily delayed their 

 regularly-paid interest, or those which have 

 never sold nor hypothecated their bonds, which 

 are in the hands of supporters of the company, 

 or contractors, or contractor-directors, who 

 really form the company ; neither are income- 

 bonds, which are not obliged to pay interest, 

 but only profess to do so out of the surplus 

 earnings, included. In the cases of bonds 

 which have failed of payment, where the in- 

 terest has been advanced by another company, 

 or other parties, it is also not considered a de- 

 fault. 



The statistics of American railroads are given 

 in Poor's Railroad Manual up to the end of the 

 fiscal year 1874. The number of miles of rail- 

 road in the several States, and total capital, 

 are respectively as follows: Maine, 957, $41,- 

 079,718; New Hampshire, 918, $15,765,036; 

 Vermont, 778, $27,755,284; Massachusetts, 

 1,786, $102,745,742 ; Rhode Island, 1 73, $6,250,- 

 881 ; Connecticut, 897, $54,696,009; New York, 

 5,250, $483,957,395 ; .New Jersey, 1,438, $176,- 

 957,905; Pennsylvania, 5,687, $560,635,214; 

 Delaware, 218, $5,347,523 ; Maryland and Dis- 

 trict of Columbia, 1,060, $91,328,304; West 

 Virginia, 576, $140,750; Ohio, 4,398, $426,- 

 986,691; Michigan, 3,361, $133,006,120; In- 

 diana, 3,890, $113,306,391; Illinois, 6,759, 

 $399,968,274; Wisconsin, 2,428, $97,417,063; 

 Minnesota, 1,990, $102,171,749; Iowa, 3,765, 

 $97,249,719; Kansas, 2,150, $124,284,623; Ne- 

 braska (including Union Pacific), 1,107, $152,- 

 030,008; Missouri, 2,880, $194,348,792; Wyo- 

 ming Territory, 459, $ .... ; Utah Terri- 

 tory, 459,' $9,165,000; Dakota Territory, 275, 

 $2,700,000; Colorado Territory, 682, $19,543,- 

 414; Virginia, 1,638, $96,324,418; North Caro- 

 lina, 1,315, $36,399,696; South Carolina, 1,320, 

 $31,530,480; Georgia, 2,260, $45,507,624; Flor- 

 ida, 484, $7,171,627; Alabama, 1,722, $68,- 

 917,404; Mississippi, 1,018, $28,422,707; Louis- 



