Dewey, 460-462, 468-471. delayed by an opposing majority in the Senate. Not until 1900 was the gold standard declared. The extraordinary revival of business prosperity was due not so much to Currency Act legislation as to far-reaching transformation of economic Taussig, of 1900. Falkner, Law of 1900. Dewey, 385-391, 410-412, 471-472. Bolles, conditions. The failure of the wheat crop in Russia and Australia called for heavy exportations of grain and a welcome rise of prices. With wheat selling at a dollar a bushel, the farmer could pay his debts and spend money for improvements. The foreign market for American steel and structural iron was being developed, and a period of extraordinary prosperity opened for that basic industry. The discovery of gold in Alaska brought a new supply of the hoarded metal to our mints. Between 1898 and 1904, $714,200,000 in gold was coined at the United States mints. The bimetallists' argument, that the supply of gold was short of the demand, and that its value was, therefore, appreciating, ceased to have weight. The per capita circulation rose from $21.41 in 1896 to $30.77 in 1904, and the advocates of abundant money were fully satisfied. The volume of Revision of the National Bank System. the currency had not been increased by the national banks. Their issues had been actually curtailed after the financial crises of 1873 and 1884. The amount of the notes in circuIII, 341–372. lation in 1891 was but $162,000,000, less than that of any time Conant, 265-270. White, since 1865. The number of the national banks was steadily increasing, but their issues had fallen off. The approaching extinction of the government bonds gave these securities a high market value. To issue money against ninety per cent of the par value of bonds that were quoted above par was not a profitable proceeding. The free silver and greenback constituencies were quite content to see this element of our currency disappear. The majority of our national banks were in the wealthy cities of the East and North, and they were regarded in other sections of the country as parties to the conspiracy of the money lenders against the people. Various projects for the revival of the national bank issue were brought forward from time to time, such as the extension of the term of the national bonds, Nat'l Bank Rept. Sec. of the Treas. 1897, new bond issues, the substitution of state and municipal bonds, Hepburn, and the safety fund system, but no thorough-going reform State and was able to secure a majority vote. Finally, the proposition Note Circuof Secretary Gage for revision of the existing plan was lation. adopted and put into operation. By the act of March 14, 1900, note issue was allowed to the full face value of the bonds; the tax on circulation was reduced from one per cent to one half of one per cent; and national banks with a capital of but $25,000 were authorized in towns of not more than three thousand inhabitants. These modifications offered considerable relief from the difficulty under which the banks were laboring. The issue of new Federal bonds enabled the banks to purchase these securities on terms under which currency could profitably be issued. By September, 1901, 662 new banks were chartered, country banks for the most part, capitalized at less than $50,000. The number of national banks in September, 1904, was 5412, Rept. Monetary more than at any previous period. The issue has risen to $449,235,095, and the average dividend paid by national 1898, banks has increased from 3.94 per cent in 1900 to 4.96 per 224-276. cent in 1904. Government Control of Railroads 76-77. Com. ences on Railroads. The last two decades of the nineteenth century witnessed Griffin, a development of railway transportation unparalleled even List of Referin the decade following on the Civil War. The industrial depression consequent on the crisis of 1873 once past, track construction was prosecuted with redoubled energy. The total mileage in operation in 1903 is 207,600 miles Stat. Abstract as against 74,000 miles in 1875. The capital investment U. S., represented amounts to $13,000,000,000, three times that 1904, of 1875. The ratio between mileage and population indicates that transportation facilities have more than kept pace with the development of the country. The number of people per mile of railroad is 746 in New England, 529 in the Middle and North Central States, 465 in the Southern, 238 in the Cordilleran, and 195 in the Pacific States. 396-401. Stat. Abstract The passenger business of the railroads has almost doubled in the past twenty years, while the freight traffic has increased 335.8 per cent. Passenger rates have been pretty steadily maintained at an average of two cents a mile, but freight rates have fallen from one and one fourth cents per ton mile in 1882 to three fourths of a cent in 1900. This reduction in charges has been usually consistent with maintenance of dividends, because, the roads once established and initial construction expenses covered, traffic grows more rapidly than current expenses. of Dividends 3.03% 2.85% 1.82% 1.71% 1.92% 2.44% 2.65% 2.97% 3.03% Charges per ton mile have been of necessity higher on the Western and Southern roads, especially in the initial stages of their development. The effects of the devastations of the Civil War is evident in the high charges on the Richmond and Danville line. Profits depend on the amount and character of the freight transported, rather than on the rates secured. The volume of traffic fluctuates with general industrial conditions. The average rate of dividends was considered low in 1876, but it fell to two per cent after the crisis of 1884, then rose slightly, only to fall again to one and one half per cent with the industrial depression of 1893. Since 1897 annual dividends have risen steadily. 1904, The crisis of 1884 was occasioned by over-investments in railroads. The mileage built in 1882 and 1883 (18,314) exceeded the construction of 1870 and 1871 by five thousand miles. In 1884 and 1885 forty-one railway corporations Stat. Abstract holding nineteen thousand miles of track were placed under U. S., receivership, and thirty-seven smaller railroad properties were 406. sold under foreclosure. Transportation investments had no part in bringing on the panic of 1893, but the railroads suffered severely from the consequent depression. Both freight and passenger traffic fell off, and earnings declined. Some of the more speculative enterprises were unable to cover operating expenses and meet interest payments on their bonded debt. Creditors brought suit, and the roads, one after another, were given over to receivers. More than two hundred railway companies, representing fifty-six thousand miles of track and one fourth of the railway capital of the country, went into the hands of receivers between 1892 and 1896. Three hundred and fifty corporations, smaller enterprises for the most part, were sold under mortgage in the years from 1892 to 1900. The great transcontinental lines - the Santa Fé, the Northern Pacific, and the Union Pacific-were most heavily involved. The problem before the government in the case of the Union and Central Pacific was to reorganize the management in such fashion as to enable the roads to meet their obligations to bondholders and to pay off their Academy, accumulated indebtedness to the United States Treasury, and 8: 259. this was successfully accomplished. The rehabilitation of a bankrupt railroad requires time and skill. The claims of bondholders and the public served can best be met, not by a foreclosure sale, but by reorganization under a new company which falls heir to the obligations as well as to the property of the suspended corporation. The processes of reorganization have given opportunity for financiers with reserve capital to combine local interests into a comprehensive railroad system. Branch lines have been absorbed, terminal facilities merged, independent roads bought in, to the end that a composite trunk line might dominate the transportation interests of a great section of Y Davis, Railway. Spearman, roads, 1-173. Newcomb, Recent Rail- Newcomb, the country. Thus the Richmond and Danville line was bought in at foreclosure sale by J. P. Morgan and reorganized as the Southern Railway; the Union Pacific came under the control of E. H. Harriman, president of the Southern Pacific; the Chicago, Burlington and Quincy was appropriated by J. J. Hill, the ambitious promoter of the Great Northern Railway. Since 1893 there has been comparatively little construction. The energies of railway financiers have been devoted to consolidation and to development of the existing lines. Half a dozen great railway systems now control the traffic of the whole country. The Vanderbilt lines dominate the transportation interests of the Northeastern states. The fusion of the New York Central with the Lake Erie and Western, together with the annexation of the Michigan Central and the Michigan Southern, gives this combination control of railway connections between Chicago and New York, while a ninety-nine year lease of the Boston and Albany secures the most direct entry to the Northern port. Twelve thousand miles of track and seventy thousand The way Control. freight cars are operated under this management. Pennsylvania system monopolizes all the transportation routes between Pittsburg and the sea. The goods to be carried are exceptionally bulky, - coal and coke, iron and steel manufactures. One fourth the freight of the United States is transported by the Pennsylvania, and two hundred and fifteen thousand freight cars are employed in its service. The Baltimore and Ohio and the Long Island railroads have been recently brought under the same system, giving a total mileage of thirteen thousand. The Gould lines form the main arteries of the Mississippi Valley traffic, covering the territory from the Gulf to the Great Lakes, from the Alleghany to the Rocky Mountains, with a network of transportation agencies. The Southern Railway management has consolidated the trunk line from Washington to Atlanta with the Mobile and Ohio. These combined lines, with their numerous branches, tap every important industry of the South, conveying cotton from the "black belt directly to the mills of the "fall line," the coal and the iron tion of Rail |