“A few roads held out for a short time, but after the ice was broken they all at once became eager to transfer their properties to the government. The railway consols at once became popular and were rated above par, the government guaranty making them in reality national bonds. A new cabinet office—secretary of transportation—was created. All the employes on the roads from the superintendents of transportation down, held their places under civil service rules, and this branch of the administration never came under political conditions, but was managed upon strictly business principles like the post office. The income from the roads, from the very first year not only paid the interest on the railroad consols, but yielded a handsome surplus that was annually laid aside in safe investments to serve as a sinking fund for the redemption and cancellation of the bonds as they should mature. Before the end of the twentieth century one-half of these bonds had been retired and great reductions had been made in passenger and freight rates and the service had vastly improved over what it was in your day. Strikes, freight and passenger rate wars with their terrific waste and demoralization of business were things of the long past. Many other leaks of railway earnings were stopped when the roads became the property of the government. Many small pieces of road became consolidated under one superintendence; hordes of directors, presidents, vice presidents, general managers, general agents, solicitors of business and other officials were dispensed with; many of whom under the former regime, not only drew salaries for supposed services, but absorbed besides in various mysterious ways, vast wealth that of right should have gone to the stockholders.
| The total mileage of the railroads of the U. S. in 1893 was | 173,370 |
| Total capital stock | $5,021,576,551 |
| Total bonds | 5,510,225,528 |
| Total actual cost $45,000 per mile | 7,801,650,000 |
| Total earnings, one year | 1,208,641,498 |
| Total net earnings | 358,648,918 |
| Amount of the railroad consols to be issued in payment of the R. R. | 8,160,300,000 |
| Annual interest on same at three per cent | 244,809,000 |
| Surplus of railway income after paying interest on railroad consols to be applied to sinking fund | 113,839,918 |
| Amount of sinking fund after twenty years to be used in the extinction of one-fifth of the consols | 1,632,060,000 |
| Net income of roads increased to | 400,000,000 |
| Surplus to be used in betterments | 41,351,082 |
(The above figures I have worked out to accord with the Professor’s suggestions—as he did not give details. I have put the average value of the roads at $45,000 per mile which is much more than it would cost to replace them.)
“I suppose,” said I, “that these bonds, especially those of the lower denominations would circulate to some extent as currency.”
“They did, and those of the $1,000 denomination were used as the basis of paper currency. But now at the close of the twentieth century over half of these bonds have been retired and the currency based upon them withdrawn. The railroad, telegraph, transportation, express, and car companies have all disappeared and the entire business is conducted by the general government. All of the roads will soon have been entirely paid for and the rates for the transportation of passengers, goods and messages are reduced almost to actual cost of the service including wear and tear. You would doubtless be surprised by the schedule of prices. For example, passenger rates for ten miles or under three cents, 20 miles five cents, 50 miles ten cents, 100 miles fifteen cents, 200 miles 25 cents, 500 miles 50 cents and greater distances at the same rate provided it is a continuous ride in the same train.”
“In my time,” said I, “electricity was being introduced as the motive power on railways. Did it prove successful?”
“It did, eminently so, and entirely superseded steam locomotion, although steam stationary engines were used principally, throughout the century. But when we come to look forward into the twenty-first century, we shall find some remarkable changes. But we have not reached that yet.”
“I am curious to know how the currency question was settled. After the retirement of the railway consols, I suppose they fell back on gold or paper based on it, did they?”
“The use of gold and silver money was never discontinued entirely, and both were coined. Near the close of last century, the free coinage of silver was strongly demanded by the people and strongly opposed by the financiers. Finally they compromised. The government gave up the task of maintaining the parity of the metals at any ratio, but coined both.