108 THE farmer's relationships. 



results from such improvements, but in most of those sections 

 of our country which are still sparsely settled, all this ultimate 

 value is assumed by holders to have accrued, and land is held 

 at prices full as high as it can ever reach within the lifetime 

 of men now living, and in many cases at higher prices. And 

 yet it is a fact that a great deal of the indebtedness of farmers 

 has been incurred for land at such exorbitant prices that the 

 debts can never be paid off from the products of the soil. 



Another matter which must be considered in this con- 

 nection is the wonderful growth of our transportation system, 

 itself also largely speculative and developed almost entirely 

 by borrowed money. Our early railroads were built mainly 

 by the proceeds of stock. The men ,who were the nom- 

 inal owners were also, in fact, the principal real owners. So 

 long as this was continued, the increase of mileage was no more 

 than sufficient for the increase of traffic. Then it came to be 

 considered that it was safe to incur indebtedness for half the 

 cost of the roads. Finally extensive lines came to be built 

 almost entirely on borrowed money and extended into districts 

 in which at the time no traffic existed. The building of a 

 railroad through a well-settled country where the traffic to 

 support it already exists, is a legitimate business enterprise. 

 To build a road into an unsettled country with the hope of 

 ultimately obtaining traffic as the country fills up, is purely 

 speculative. It may settle up quickly and it may not. If the 

 traffic does not come the mortgages take the road. In many 

 cases the roads thus built have not been worth nearly the 

 face of the mortgage. Farmers are not the only people who 

 speculate unwisely. 



But whatever the ultimate result of the speculative building 

 of railroads, the immediate effect is always wonderfully stim- 

 ulating to business along the line. A district is always pros- 

 perous while borrowed money is being exi)ended in it on a 

 large scale. The pinch comes when that money has to be 

 repaid, in addition to large disbursements for interest. While 

 this building activity is at its height, great efforts are always 

 made to sell land to farmers, who, carried away by the prevail- 

 ing excitement, pay more than the land can ever be worth; 



