February 1953 page 13

both freight and passenger, remained
in full effect until it was repealed by
the Congress after the end of World
War II. In that period Uncle Sam
realized a savings of over $900,000,000
in the cost of transportation services.
How is that for a shrewd investment?
Not only did the Goverrnment open up
the West but to boot it earned $900-
000,000 on a $130,000,000 outlay.

There is another distortion of facts in
most history books. The Government
made loans to some of the pioneer rail-
roads totaling $64,623,512. The roads
were to pay 6% interest on the bonds
and pay them off. Out of 37 history
texts examined by Mr. Henry, 34 of
them mention the bond aid. In one-
third of these it is not made clear
whether the financial assistance refer-
red to was a loan or a gift. Three de-
scribe the aid definitely as gifts (which
they were not), 21 refer to them as
loans, but only four mention the fact
that the loans were repaid. Three make
the completely erroneous statement
that the loans were never repaid.

Another smart investment

Here is the truth of the $64,623-
512 in loans. Of the total, $63,023,512
was fully repaid with interest amount-
ing to an additional $104,722,978—a to-
tal repayment of $167,746,490 on a loan
of $64,623,512. Another brillian finan-
cial investment by Uncle Sam!

It is easily apparant how the mis-
taken impression of Government sub-
sidy of railroads became so widespread.
Most people are exposed to the land
grants only once — in high school his-
tory. By and large the text which they
studied gave either incomplete or in-
accurate desriptions of the trans-
actions. Happily many have been re-
vised since the publication of Mr. Hen-
ry's study.

The next time you are reminded of
railroad subsidies by proponents of
truck and air line subsidies, give them
these capsule facts.

1. 92% of the nation's railroad mile-
age received no land grants whatso-
ever. Railroads in this category bought
their own land and have paid taxes on
it ever since.

2. The other 8% received lands val-
ued at $130 million, but they repaid the
government $900 million in reduced
freight and passenger charges.

3. Government indebtedness incur-
red by the pioneer railroads was paid
off nearly three-fold.

4. No railroad mileage in North or
South Carolina received land grants.
Their land, equipment, and buildings
are all privately owned and publicly
taxed.

When these facts are known few fair-
minded persons can continue to con--
tend that the railroads were ever sub-
sidized in a manner even remotely cor-
responding to the construction of roads
for trucks or airports and terminals for
use of air lines.

ONE CARRIER WHO CLEARS HIS OWN WAY
[cartoon rendering of locomotive using snow shovel to clear tracks]

14 SEMAPHORE