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6. One final question remains for our consideration: What is the probability of the continued existence of the industry? The elements of success in the trade are the tariff, the cheapened production of steel, and the low price of labor. These three things have made it possible for the industry to gain a foothold in this country. The tariff seems to have given the incentive and at the same time to have protected the business from excessive competition in the beginning. The fact, as shown by previous tariffs, that such protection alone was unable to create the industry, gives additional importance to the other elements. If steel had not been low in price at the time wages were falling, it is doubtful whether the McKinley act would have created the industry. In regard to the future, the indications are that steel will continue low in price for some time to come. The exports of steel made in the last two years certainly point to a decided advantage in this material over the English industry. So long as the progress in mining machinery and rolling mills. continues, we may expect to retain this advantage. Wages, however, are certain to rise, and it is more than likely that two years will see them restored to the old level. Unless this advance can be offset by improved machinery, which is more than probable, there must be a slight rise in the price of tinplate and with it some encouragement to foreign makers to enter our markets.

About the only market now left to the English makers is that of the Pacific coast. The freight rate on one hundred pounds from Wales to San Francisco is 18 cents; the rate from Pittsburg to the same city is 614 cents. The price of English plates, duty paid, at the latter port would be $4.17. If the price for American plates is $3.45, then two makes are about the

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same, $4.17 and $4.16 per boxes of 108 lbs. delivered. Even this market is likely to be closed to England if the price falls below $3.45 per box.

The American tin-plate industry will undoubtedly continue in existence. At the present, combinations and trusts threaten to control the industry. A short-sighted policy on the part of the managers may lead to higher prices and renewed competition with English makers. Such an organization is more likely to cut expenses and hold the price just below the point of foreign competition, so that the danger from foreign rivalry is not great. The industry is not so dependent upon the tariff as might be supposed, and the actual possession of the market, accompanied by good product and sensible management, will make it possible to meet the foreign competition as the tariff is lowered.

The American consumer now pays about ninety-five cents more for American tin than the price of English plate delivered at New York. This is really a premium for the maintenance of the American industry. If in the course of ten or fifteen years our manufacturers can meet the English price, the cost, expense and trouble in creating the industry have been justified. As it now stands three things may endanger the industry, (1) rise in cost of steel, (2) in wages, (3) and in block tin. If this rise should occur in the three cases at the same time the industry would hardly stand under the blow. As has already been pointed out, steel is not likely to increase in price, while the output of the Banca mines will protect us in some degree from any change in the price of Welsh block tin. At the same time American ingenuity will undoubtedly increase the efficiency of labor so that the disadvantages now labored under may gradually disappear. Taken all in all, the development of this industry is a remarkable example of timely legislation. The conditions were present, the tariff permitted their utilization, but in no sense must the importance of the conditions be underestimated.

University of Minnesota.

FRANK L. MCVEY.

RAILWAY RECEIVERSHIPS IN THE UNITED

STATES.

THEIR ORIGIN AND DEVELOPMENT.

IN the words of a member of the Supreme Court of Georgia,

"this is the day of receiverships, and their dominion seems to be extending all over the land." A receiver, according to Beach, is an officer of the Court of Chancery appointed to take charge of property in litigation, when it does not seem equitable to the court that either party should have possession or control of it. "Railway receiverships, as incidental to a foreclosure of the mortgages upon railway property and franchises, are, in the main, peculiar to the system of jurisprudence administered in the United States."1 Both the law and the practice of receiverships in railroads are a distinctly American product of practically the past thirty years.

The purpose here is to inquire into the extent, the procedure, the causes and the results of this form of adminstration of corporate property only so far as it relates to railroads in the United States.

The latest official figures available as to the extent of railway insolvency in the United States show that on June 30, 1896, there were 151 railroads in the hands of receivers.2 These figures represent a mileage of over thirty thousand (30,475.39) or over 16 per cent. of the total mileage of this country at that date. The capitalization represented $742,597,698 in stocks and $999,733,766 in bonds. For the year ending June 30, 1895, there were 37,855.80 miles in receiver's hands, or about 21 per cent. of the mileage of 1895. This shows a slow recovery from the panic of 1893, when one dollar out of every four invested in railway securities was in the hands of receivers, and being administered by the State and Federal courts through whose authority the receiverships had been granted. That is

1 Beach, On Receivers, p. v.

Statistics of Railways in the United States, pp. 9-10, 1896.

3 Income Account of Railways in the United States, p. 12, 1894.

to say, that in most memorable years of the collapse of railway credit there passed out of the control of its owners private property in railway corporations to an amount that fell very little short of the total assessed valuation of all the real and personal property in the five New England States according to the census of 1890.1

The following table covers a period of thirteen and a half years of receiverships, giving the number of roads involved, the mileage and the amount of stocks and bonds from 1884 to July 1, 1897.2

The figures for receiverships are not directly available for the years prior to 1884. We know, however, that in the years 1876-1883, there were sold at foreclosure sales, most of which roads must have passed through some form of receivership, as many as 291 roads, with a mileage aggregating 25,143 and having a capital in the form of bonds and stocks to the amount of $1,576,062,000. The yearly average for this period would therefore be 38 roads, of 3143 miles, and nearly $200,000,000 of capitalization. For each one of those foreclosures, says Beach, there were from one to ten receiverships.*

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From 1884 to 1896 inclusive, the number of roads put into receivers' hands has been carefully recorded and can be compared with the records we have of the roads which in the previous period passed out of receivership control. If we leave out the last six months of the above table, we have a total of 412 roads for these thirteen years, a mileage of 90,865, and securities amounting to $4,916,000,000. For each of these years an average of 31 roads failed; the mileage involved each year was nearly 7,000-a distance equal to the entire Pennsylvania system, or twice the distance from New York to San Francisco and return and back to Pittsburgh again, or 200 miles less than eight times the distance from New York to Chicago, were put into receivers' hands every year; on an average for these years, the annual liabilities in stocks and bonds that were concerned with this flood of insolvency exceeded $378,000,000. The grand total of liabilities in business failures for the entire United States in 1896 was $247,052,343. The magnitude of the railway interests of the country does not suffer by comparison with other fields of economic enterprise.1

There is still another more remote period of railway insolvency, comprising the years of 1871-4, when railroads together with every other commercial enterprise went through the paroxysms of contraction in the effort of the country to readjust its business to the conditions of peace. It is difficult to determine just how many roads were put into receivers' hands during this period, but it is possible to indicate the extent of defalcation that overtook the rapidly expanding development, from a study of the financial records for these years. Those were the days when railroad securities were floated with a freedom that defies accuracy in statistical inquiry. We have therefore to wait for the courts and the stock exchange to deliver up those magical instruments with which the country in its unbounded faith in its possibilities of immediate development managed to double its railway mileage in the short span of eight years. A conservative estimate from figures given in the financial journals of the period leaves little reason for doubting 1 World Almanac (1898), p. 151, from Bradstreet.

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