He used often to talk of these things with Hallam.
"You're quite right," said that sagacious financier. "The country has gone on a big financial drunk, and of course the headache will come when the spree is over. But it won't be over for a considerable time to come, and in the meanwhile the country is getting a good deal of benefit from it.
"Fortunately, it is taking a better course than such sprees usually do. Ordinarily the existence of an inflated, superabundant, and depreciated currency results in a wild orgy of stock gambling, grain gambling, cotton gambling, and all the rest of it. There is no more of good in that—in fact, there is far more of harm in it to the country—than there would be if everybody went to betting at roulette or faro. It makes the lucky gamblers rich and the unlucky ones poor, but it produces nothing, even incidentally. This time the gambling is taking a more productive form. Instead of betting on market fluctuations, men are putting money into factories, mines, mills, and railroads—especially railroads. They are enormously overdoing the thing, but whenever they build a railroad, even unwisely, the railroad will remain as something to show for the money when the spree is over."
"That is true enough," said Duncan, "and of course all this railroad and other building is, incidentally, giving work and wages to great multitudes of men. But are we not paying too high a price for the good we get? We are building debts about forty per cent. faster than we are building railroads. Every mile of track is constructed with borrowed money, worth only about sixty cents on the dollar. Yet every dollar of these borrowings must some day be paid off in gold. And in the meantime the roads must pay a high interest rate on a dollar for every sixty cents' worth of money borrowed. I do not see how the country can stand it."
"It can't, permanently, and you haven't mentioned the worst feature of the matter."
"Why, in the craze for building railroads, men are projecting and building many lines that are not needed at all. In some cases two, or even three, parallel roads are being built through regions that can never support more than one. It is sheer waste, and of course it means collapse sooner or later. But there is another side to the matter. The country is growing enormously in wealth, and still more enormously in productive capacity. Nothing helps such growth like the multiplication and extension of railroads. They bring men near to their markets. They make farming profitable where before it would have been a waste of labor. They multiply farms and towns, swell the population, and in that way make a market for manufactures. If we could cut out the parallel lines and other foolishly projected roads, I firmly believe the growth of the country in consequence of railroad building would more than compensate for the extra cost entailed upon us by borrowing at a time of depreciation in the currency. But we can't prevent fool projectors from building foolishly, and some day the country's sound business must shoulder all that load of bad investments. When a boy eats green apples he is in for a colic, but he generally gets over the colic. It will be so with the country."
Then the talk turned into a more practical channel.
"You feel sure, then," asked Duncan, "that we are making no mistake and doing no harm in carrying out our project of a railroad that shall bring Cairo closer to New York in the matter of railroad mileage?"
"Perfectly sure. That railroad is imperatively needed. It will develop a very rich agricultural region which has been practically shut off from the world. There is traffic enough for the road already within sight to make it pay. When it is built, it will compel a cheapening of freight rates to the advantage of the whole country."