“These are things which might be done.”
[From the _New York Times_, November 20, 1895.]
FINANCIAL.
Holders of stock and bonds in the Atchison, Topeka, and Santa Fe,
Denver and Gulf, Kansas City and Chicago, Lakeshore and Michigan
Southern, New York and Erie, and New York and New England Railroads,
who desire to dispose of their holdings, will find a purchaser in me
at the rates prevailing at the close of the Stock Exchange yesterday.
I already own a majority of the capital stock of the roads named, and
intend to consolidate them in one company without any bonded
indebtedness, with the intention of providing the public with a
double-track road between Portland, Maine, and San Francisco,
California, _via_ Boston, New York, Buffalo, Detroit, Chicago, Kansas
City, and Denver, with a branch to Galveston. This consolidated road
will not be run with a view to profit beyond four or five per cent per
annum above operating expenses. In making this experiment I deem it
only right to relieve the present holders of stock and bonds from
loss, and this offer of purchase will remain open for one month.
DAVID MORNING,
_39 Broadway, N. Y. City_.
_2 sq. 1 m., November 19._
We copy from our advertising column the foregoing, which presages the
most important event of the century. Whatever may be thought of the
wisdom of Mr. Morning’s plans in any direction, there can now be no
question as to his ability to carry them forward. The brilliant
strategetical movement by which he bagged two hundred millions of
piratical money from Gray, Claybank, and Wolf, and, while defeating
them, restored values and prosperity, is still fresh in the public mind,
and his subsequent course in searching out all other persons who lost by
the panic, and reimbursing them the amount of their losses, will not
soon be forgotten.
The brave and sagacious action of the Secretary of the Treasury in going
outside of the channels marked by red tape in order to promote Mr.
Morning’s plans, is generally commended by the public, and meets with no
criticism except from the baffled syndicate of scoundrels.
Whatever action, if any, Congress may take next month when it assembles
with regard to the demonetization of gold, and whatever may be the
course pursued by the German Reichstag, the French Chamber of Deputies,
and the British Parliament, all of which are now wrestling with the
great economic problem which the vast gold yield of the Morning mine
presents, yet one thing is certain, David Morning has quietly and
shrewdly placed two thousand five hundred millions of gold in the mints
and treasuries of Europe and America, and obtained therefor money, the
legal tender quality and value of which, no future legislation can
impair.
It is fortunate for the world that this vast sum is in the hands of a
man who seems to comprehend the nature of the problems which its
existence, its introduction to circulation, and its subsequent use, will
create, and who also seems disposed to treat his great treasure-trove as
a public trust rather than a personal possession. It is a curious fact
that some statesmen who have, without much reflection, been
characterized as visionary, urged vainly for years upon the public
attention the wisdom and feasibility of creating vast sums of fiat
money, which were to be loaned upon land and crop values. It will not
escape notice that the Congress of the United States might, at any time
within the past few years, by passing a land and property loan law, have
created the same conditions, whether they prove to be conditions of
prosperity or disaster, which are now upon the world by reason of Mr.
Morning’s gold discovery. But it is not our purpose to attempt
discussion of the situation generally. We intend only to give to the
public a reliable account of the railroad projects of Mr. Morning. On
reading his advertisement, we dispatched a reporter, who found him, as
usual, frank and communicative. No comment of ours would add force or
importance to the utterances of the Arizona Gold King, and we will let
him tell his story in his own way.
“My plan,” said Morning, “is not complicated, and not original with me.
I only supply the means to try an experiment which it has often been
suggested should be tried by the United States Government. If successful
it will be of incalculable benefit to the people of this country. It
will require not more than $250,000,000 to carry it out, and its failure
would not involve a loss of more than $50,000,000.
“I marvel,” continued the gentleman, “that public opinion did not years
ago act upon Congress so as to cause it to deal with the transportation
question in the interest of the people. I marvel that some of our great
capitalists have not joined efforts, and devoted a portion of their
possessions to providing the people with cheap transportation. Suppose
that a dozen of them should have together made a pool of $200,000,000,
and undertaken a work—not of charity, but of helping the toilers to help
themselves. It would not have taken one-third of their possessions; it
would have deprived neither them nor their children of a single luxury,
and yet it would have allayed the disquiet and antagonism of multitudes,
and, more than bronzes or marble shafts, it would have linked their
names to immortality.”
“Will not Messrs. Gray, Claybank, and Wolf have supplied the funds for
your experiment?” queried the reporter.
Morning laughed as he answered: “Well, in a way, yes; and if I had not
already devoted their contributions to founding and maintaining
industrial schools, there would be a sort of poetical justice in making
such application of that fund.”
“Will you give me, for the _Times_, the details of your plans, Mr.
Morning?”
“Certainly,” replied that gentlemen. “I have nothing to conceal. The
railroad lines of this country, especially the transcontinental lines,
were built when material and labor were much higher than now, and some
of them when gold was at a high premium. Stock and bonds of many roads
have been watered, and in paying present market prices for them I shall
probably pay much more than the sum for which the roads could be
duplicated if constructed honestly and economically at present cost of
labor and materials, and allowing nothing for subsidies, bounties,
stealings, and profits of speculators, contractors, and legislators. But
it would not, I think, be right to punish present holders of stocks and
bonds for the sins of their predecessors in interest, and I therefore
propose to pay the present inflated value of these securities. I shall
not, however, attempt to make the reorganized road carry the burden of
paying interest and dividends upon the sums which I shall pay.”
“What do you estimate to be the present market value of the roads you
propose to purchase, Mr. Morning?”
“At present market rates, and I shall pay no more, the total amount that
will be required to buy in both stocks and bonds, will be, in round
numbers, $150,000,000. I am advised by experts that the cost of widening
roadbed and bridges, and laying additional iron, so as to make four
tracks from New York to Kansas City, and a double track from the
Missouri River to the Pacific, will, with the necessary buildings and
shops, be about $70,000,000.”
“Then the proposed line, when completed, will have cost you about
$220,000,000?”
“Exactly, less the sum which may be received for rolling stock, which I
propose to sell. But I am informed by my engineers that a similar line
might be built now for $150,000,000, and I therefore take $150,000,000
as the actual value of the roadbed, station buildings, and shops for
repairs, and I estimate traffic charges upon that basis.”
“Why do you sell the rolling stock? How can a road be used without
locomotives or cars?”
“I propose that the company I will cause to be organized shall, except
in certain contingencies, run no trains whatever on the road except
repair trains. The roadbed will be open at uniform tolls to any person,
firm, or corporation who may wish to run trains upon it. The tolls will
be fixed upon such a basis as will provide means sufficient to keep the
roadbed up to the highest standard, and pay five per cent per annum upon
the actual value of the road, which, in the first instance, will be
fixed at $150,000,000.”
“Will not the value of the road advance, Mr. Morning?”
“I expect so,” was the reply. “All values will advance with the increase
of standard money, caused by the yield of the Morning mine, and there
will be a revaluation of the roadbed each year, by disinterested and
competent engineers. If the amount received for tolls in any one year
shall exceed the sum of five per cent on the valuation of the previous
year, the tolls will be reduced for the next year. If it shall fall
short of that sum, the tolls will be increased for the next year.”
“Will not the ownership of the roadbed by one company, and the ownership
and management of rolling stock by a dozen or a hundred other companies,
be productive of confusion and accidents?”
“Not at all. On the contrary, accidents will be almost impossible.
Switches and side tracks, capable of accommodating from one to a dozen
trains or more, will be provided every five miles, with buildings for
receiving freight and passengers, at every station. Between Boston and
Kansas City two tracks will be devoted to passenger trains and two to
freight trains, and a uniform rate of speed be established, of
thirty-five miles per hour, including stoppages on the main track, for
passenger trains, and fifteen miles an hour for freight trains. Between
Kansas City and San Francisco, so long as there shall be only one double
track, on which both freight and passenger trains must run, a uniform
rate of speed of twenty miles an hour for both freight and passenger
trains will be established, except on mountain grades, where the speed
must be lessened. There will be an interval of not less than fifteen
minutes between trains east of the Missouri, and half an hour west of
it, and whenever a train leaves or passes by a station, its passage over
the rails at that station will, through an electric wire, be made to
ring a bell, set a signal, and close a switch at the next station behind
it, and no train will be allowed to leave or pass by a station until a
signal shall be received that the preceding train has passed by the
station ahead.”
“Suppose a train conductor or engineer should proceed without receiving
the signal, and in defiance of orders from the station master?”
“His train would be automatically shunted off upon a side track, where
it would run up against elastic buffers of rubber, filled with air. The
main track would not be clear until the train passed the station ahead.
Until then the switch leading to the side track would be open.”
“And how would that switch be again opened, after being closed?”
“Automatically, by the passage of the train over the rails ahead of it.”
“That is a very ingenious and original idea, Mr. Morning.”
“Ingenious and simple, but it is not my own. A similar contrivance was
in use on the Italian roads twenty years ago, although the idea was
suggested to me by an Arizona rancher, who was averse to having cattle
straying in his alfalfa fields, through which several public roads ran.
In order to avoid the cost of fencing the roads, he put up automatic
gates. The weight of the horses and vehicle upon a platform a few yards
from the gate, on either side, operated upon a lever, and swung open the
gate, which was released automatically by the passage of the wagon, and
so swung shut.”
“You seem, by these arrangements, to have secured the safety of
passengers and train hands, but how about the speed? Will the traveling
public be content with twenty miles an hour between Kansas City and San
Francisco?”
“I do not know. If they shall not be, still the speed would be
satisfactory to the freighters. My own belief is that the greater safety
and lower rates of passage that will prevail on this road will attract
to it a large share of the passenger traffic. Those who are in haste can
travel over one of the other lines.”
“Your object seems to be to give to the public cheaper railroad
service.”
“It is partly that and partly to give the railroad employes better pay
and greater regularity and permanency of employment. I will try to
divide the benefits equitably.”
“Will not those who run trains upon your road defeat your object by
combinations among themselves, to put up the price of freight and
passage, and put down the wages of railroad hands?”
“It will be practicable, I think, to guard against both these things. If
the Brotherhoods of Locomotive Firemen, and Locomotive Engineers, and
Train Hands, will establish and maintain reasonable rates of
compensation and hours of labor, and will enable all qualified workers
to become members at will, then the directors of the company owning the
roadbed will only allow its use to trains managed by Brotherhood
members. If persons or companies owning rolling stock shall advance
freight or passenger rates beyond maximum, or reduce them below minimum,
rates, fixed by the directors of the Railway Company, they will lose
their right to run trains, and if a combination should be made to
diminish facilities to shippers or travelers, then the Roadbed Company
will itself place a freight and passenger service on the track.”
“Will you expect to personally superintend this great work, Mr.
Morning?”
“No, I must leave it to others. Once it shall be well started I have
other projects which will require my attention.”
“Who will run it, Mr. Morning?”
“The Board of Directors will, in the first instance, consist of the
governor of each State through which the roadbed shall be constructed,
from Maine to California. To these fifteen or sixteen governors will be
added thirty experienced railway managers, who will be selected by me.
Each governor will serve as director only during his term as governor,
and will be succeeded as director by his official successor as governor.
The thirty directors appointed by me will receive liberal salaries, will
not be permitted to be interested in any other railroad, and will serve
until they resign, or die, or are removed for cause by a two-thirds vote
of the other directors. Vacancies thus occurring will be filled by a
similar vote. Subject to the principles of management I have endeavored
to outline, the control of the affairs of the company will be with the
Board of Directors.”
“Will not the vast sums of money which the yield of the Morning mine
must add to the standard currency of the world so inflate values as to
make difficult any equitable adjustment of freight or passenger rates,
or of the wages of railroad workers?”
“Freight and passenger rates, and wages, will necessarily advance with
the increase of all values. It will be like the tide at the Dardanelles,
which never ebbs. No man who has any knowledge, or exercises any care,
need be overwhelmed or hurt by it, and all men who try can guide their
barks to prosperity upon its swell.”
“Would you consider it really a healthful state of affairs if, by an
inflated currency, prices were so increased that a dinner which one can
now buy for fifty cents should cost $5.00, and a $20 coat sell for
$200?”
“Why not if prices were similarly advanced over all the world? People
indulge in a good deal of loose talk about inflated currency, debased
currency, and fiat money. In truth, all money is fiat money, for a bar
of gold is not a legal tender, and inflation of values is the law of
commercial growth. In the middle ages a penny was the price of a day’s
wages or of a bushel of wheat. Money which has for its basis either
precious metals or substantial property in lands or merchandise is good
money, while money lacking such basis is bad money. Clipped shillings,
French assignats, and Continental and Confederate currency, were no more
fiat money than are American double eagles or five-pound Bank of England
notes. It is the stamp of the government, the fiat of its power, that
turns the metal or the paper into money.”
“But do not all financiers consider inflation a disaster, Mr. Morning?”
“Inflation,” replied the gentleman, “whether of metallic or paper
currency that is accepted by the world or by a great commercial nation
as a legal tender, can do no harm except to those who loan money. A
dollar is a mere term. You pay now five dimes, or fifty cents, or five
hundred mills, for your dinner. Suppose by large continued increase in
the production of gold and silver, the money of all countries shall be
inflated so that you must pay fifty dollars instead of fifty cents, or
five hundred dimes in place of five hundred mills, for your dinner. What
of it? You could carry as much paper money as now. It would need only to
increase the denomination of the bills. All property and services would
advance proportionately. Only the loaners of money would be left, and
they would soon find it to their interest to put their money into
property, which would necessarily advance in value, rather than in
loans, which would, in their relation to property, necessarily decrease
in value. Under such conditions interest would not compensate the money
owner for the depreciation of his principal, and the loaning of money,
except for brief periods, would cease, while property of all kinds would
always be saleable for cash, because always sure to increase in value,
while idle money would not so increase.”
“What will be the effect of your project on the other railroads, Mr.
Morning?”
“My hope and expectation is that the successful working of my project
will induce large aggregations of capital to acquire and conduct all the
railroads in the country under one management, which should itself be
under the direction and control of the Federal Government. Four thousand
millions of dollars would purchase and free from bonded indebtedness all
the interstate railroad and telegraph lines in the United States, and
$1,000,000,000 more would improve such property to the highest point of
efficiency. A company with a capital of $5,000,000,000, having no bonded
debt and economically and honestly managed, could pay dividends of five
per cent per annum on its stock, which stock might be increased in
amount as other values increased. Present railroad bondholders would be
transformed into railroad stockholders, and the stock of the United
States Consolidated Railroad Company, guaranteed by the United States
Government to pay five per cent per annum, and so conducted as to earn
that dividend, above cost of repairs and construction of new lines,
would be a favorite investment. Such stock might be made the basis of
currency issued thereon to national banks. It could be held by
benevolent and educational institutions, and trust funds could be
invested in it. It would take the place of the present United States
bonds as a lazy fund, and it would not be a lazy fund, for it would be
an investment in earning property. It would substitute the earned
increment of labor for the unearned increment of interest. Interest on
money at best belongs to conditions which are passing away. It is an
attribute of a former civilization, and I predict that during the next
century it will come to an end altogether.”
“How would the United States Consolidated Railroad Company affect
railway patrons and railroad employes?”
“By adjusting freight and passenger charges, and wages of employes, so
as to produce an income of five per cent on the investment, and by
discontinuing non-paying lines, building new ones, and developing
profitable connections—in brief, by running all the railroads in the
land as one company under one management, in such manner as to produce
from earnings a net income of five per cent, on a capitalization of all
existing stocks and bonds at their market value to-day—the prices of
freight and passage would be reduced, and the wages of railroad workers
increased.”
“I think,” continued the Arizona Gold King, “that the entire system
should be under government supervision, or even under government
direction, and, depend upon it, nobody would be harmed, except about
forty thousand people, who now own sixty per cent of all the real
property in America, and even the damage to them would be slight, for
they could purchase stock in the Consolidated Company, and learn to be
satisfied with five per cent and no stealings.”
“You spoke of a provision being made in your company for the future of
railroad employes. How would that be done?”
“In the company which I propose each employe will be required to agree
that not less than fifteen per cent of his wages shall be withheld from
him and annually invested in the stock of the company, which stock shall
be non-transferable. It will be delivered with its dividends, likewise
invested, at his death to whomsoever he may designate, or, if he live to
the age of sixty, it will be paid to him.”
“Do you think that the worker needs this sort of compulsory
guardianship, Mr. Morning?”
“I certainly do. For one of them who lays up for a rainy day, nine are
possessed by the very genius of unthrift. I have known miners to work
for months, and mining is the hardest work in the world, and then draw
their wages and expend hundreds of dollars in one spree. Where the
worker uses liquor—as most of them do—he lives from hand to mouth, and
even among the temperate, it will be the rare exception to find one who
has enough savings to support his family for six months.”
“Is it only the workers who are imprudent, Mr. Morning?”
“No, the habit of careless unthrift is common to all men. It is not
confined to the worker. It appears more frequently in him only because
his necessities are more urgent and apparent, and, in this respect, he
lives more in public. But extravagance is a part of the original savage
man, the leaven which has survived all civilization. I have known
lawyers, and doctors, and divines, and journalists who, with their
families, might have been saved from embarrassment and suffering if
there had been some power every month to seize a portion of their
earnings or income and make a compulsory investment of it for their
future benefit.”
“But,” said the speaker, “to return to my subject. There is yet another
advantage to be considered. If the United States operated, or even
supervised, all the railroads, it would not be difficult—by requiring
each railroad hand to report for drill and practice one day in each
month—it would not be difficult to provide the nucleus and material for
a great army, if such should ever again be necessary.”
“Will the time ever come when armies can be dispensed with, Mr.
Morning?”
“I think it has come. I am about to have made some experiments with the
new explosive ‘potentite,’ which, if successful, will, I think,
demonstrate to the world that hereafter war will mean simply mutual
annihilation, and that in conflict there will be small odds between the
weakest and the most powerful of nations. But I wander into the domain
of speculation, and you newspaper men require only facts.”
“Do you propose any reform or changes in the present methods of railroad
management, Mr. Morning?”
“Several.”
“For instance?”
“There will be a uniform rate per mile for passage, all tickets will be
transferable, no inducements will be offered to travelers to perpetrate
falsehood and forgery, and freighters will not be required to expose
their business secrets to the officers of the railroad company.
“Do you know,” said Mr. Morning, “that a demand has actually been made
upon me by the railroad companies for freight at regular express gold
bullion rates on $2,500,000,000 worth of gold bars which they carried
from Arizona to the East disguised as copper? For freight on the
supposed copper I paid their regular rates of charges, amounting to
about $200,000. They say that if I had shipped it as gold their charges
would have been six and one-quarter millions, and they claim the
difference.”
“But you shipped it as copper at your own risk, did you not, Mr.
Morning?”
“Of course I shipped it as copper at my own risk, and on ten bars, worth
really $400,000, which were lost from the ferryboat in transporting
freight during the flood at Yuma, I collected from the company only
their supposed copper value of $320, and I had no end of trouble and
delay in making the collection. But they assert that in covering the
gold bars with copper sheaths, I worked a ‘gold brick swindle’ on them,
and they want the difference.”
“Will you pay the $6,000,000 claimed, Mr. Morning?”
“Not if I can help it,” smiled the gentleman. “I have other uses for the
money. I have in view several other reforms in railroad management.
Railroad employers who, through no fault of their own, are hurt in
railroad accidents caused by the negligence of a fellow employe, shall
have the same right of recovery at law against the company as an injured
passenger would have. Train men, in stopping at country stations, shall
consult the convenience of passengers rather than their own, and shall
not halt the baggage car in a sheltered spot, while they compel
disembarking passengers to wade through the mud. Brass-mounted
conductors shall not glower at question-asking passengers, and, to all
requests for information, answer flippantly, ‘Damfino,’ and small dogs
shall not be torn from their friends and suffered to wail their strength
away in mute despair in a strange and comfortless baggage car, without
bones to beguile or friendly faces to encourage them; but every
reputable lapdog who pays his fare, and abides noiseless and contented
in the same seat with his mistress, shall be left in peace.”