ICLand Falcon48 The land grants were shrewd business deals from which the government profited hansomely. Modern politicians could learn something from them. This is the power of the false narrative, some poor history, and some bad economics. Let me take the false narrative first, and the rest later. The underlying assumption is that the Federal Government would have realized no benefit from its Western lands, ever, without offering land grants to railroads to build where railroads otherwise lacked the financial incentive to build. That's a false assumption. Privately financed railroads did eventually build West, and it is likely that the government would have benefited to any similar extent financially. This is particularly true since the Federal Government disposed of virtually none of its alternate section lands during the pioneering era of the transcontinental railroad construction and operations. It's simply false to assert that the Government made ANY money that it would not have made when building such railroads made economic sense because as a matter of fact, the Government didn't make any money in the time frame of reference. The Upper Midwest was a good example of the process that the Poster suggests could not have happened. Illinois Central got substantial land grants, but the politics there quickly fell victim to the repeal of the Corn laws in Britain and the rapid industrialization in the United States which created natural markets for corn and wheat. The Upper Midwest was quickly covered by privately-financed railroads -- the Rock Island, the Burlington, the Alton and the Milwaukee Road, along with myriad smaller lines -- which permitted the development of highly efficient markets for the production, distribution, and sale of agricultural products; all without government intervention. Those three became among the strongest railroads in the United States and did not enter receivership at the time that the largest land grant railroads did. [This is why, "Murphy Siding," I responded as I did. You remarked that RI, Q and MILW were all land grant railroads and went bankrupt. It's a history I am unfamiliar with. I simply have no idea what you meant, or may mean, in the context of the period 1873-1893].
Falcon48 The land grants were shrewd business deals from which the government profited hansomely. Modern politicians could learn something from them.
This is the power of the false narrative, some poor history, and some bad economics.
Let me take the false narrative first, and the rest later. The underlying assumption is that the Federal Government would have realized no benefit from its Western lands, ever, without offering land grants to railroads to build where railroads otherwise lacked the financial incentive to build.
That's a false assumption. Privately financed railroads did eventually build West, and it is likely that the government would have benefited to any similar extent financially. This is particularly true since the Federal Government disposed of virtually none of its alternate section lands during the pioneering era of the transcontinental railroad construction and operations. It's simply false to assert that the Government made ANY money that it would not have made when building such railroads made economic sense because as a matter of fact, the Government didn't make any money in the time frame of reference.
The Upper Midwest was a good example of the process that the Poster suggests could not have happened. Illinois Central got substantial land grants, but the politics there quickly fell victim to the repeal of the Corn laws in Britain and the rapid industrialization in the United States which created natural markets for corn and wheat. The Upper Midwest was quickly covered by privately-financed railroads -- the Rock Island, the Burlington, the Alton and the Milwaukee Road, along with myriad smaller lines -- which permitted the development of highly efficient markets for the production, distribution, and sale of agricultural products; all without government intervention. Those three became among the strongest railroads in the United States and did not enter receivership at the time that the largest land grant railroads did.
[This is why, "Murphy Siding," I responded as I did. You remarked that RI, Q and MILW were all land grant railroads and went bankrupt. It's a history I am unfamiliar with. I simply have no idea what you meant, or may mean, in the context of the period 1873-1893].
The land grants to Illinois Central were very different from the later Federal land grants to the trancontinental roads. I agree the IC grants were likely unnecessary as events transpired. But the IC and the later roads in the midwest weren't building hundreds of miles of line across unproductive territory, as were the transcontinental roads. Also, the IC grants were not "checkerboard" - the granting gravernment entity (which I believe was the state) didn't retain anything that they could later sell once the railroad increased its value. The statement that "the Government didn't make any money in the time frame of reference" from the Federal land grants is also curious. Are you saying that the Government DIDN"T make money from the sale of the alternate sections they retained? If so, that is historically false. If, on the other hand, you are saying that the government didn't make its money during or shortly after construction of the railroad ("during the pioneering era of the transcontinental railroad construction and operations"), that's probably true, but irrelevant. The fact is that the property was sold within a reasonable amount of time after the grant.
The argument that transcontinental railroads would have been built without the land grants strikes me as Monday morning quarterbacking. The fact that some transcontinental lines were built without land grants AFTER the original transcontinental lines proves nothing. It's highly doubtful that the capital would have been available for an entirely private transcontinental venture until the land grant roads proved it was possible to build and operate such lines with some reasonalbe prospects of success (leaving aside some of their financial shenanigans).
One other point needs to be made. There were Federal government "land grants" and Federal government "right-of-way" grants. The land grants gave the recipient railroads land substantially in excess of what was required for the physical construction of the railroad. The railroad could then turn around and use that land to obtain financing for railroad construction. It's highly unlikely in this scenario that the railroad delayed actions which would have perfected its title, since they needed to do this to use the land to obtain financing. Right of way grants, on the other hand, merely gave the railroad a right of way (generally 200 ft in width) for construction of the railroad, generally based on a "map" filing, which didn't have to be carefully surveyed. The interest the railroad obtained in this case didn't include adjoining lands and was reversionary. In this case, there woudln't have been much urgency to determine exactly what property was involved.
I also note that none of the posters criticising my comments have mentioned to "free or reduced rate" conditions of the Federal transcontintental land grants, which gave the government cut rates through two world wars.
Prior to the explosion of the automobile, not every family owned a horse and cart. Certainly many did, if only because we were more agrarian at that time, but people in cities used transportation services. Railroads, Streetcars, carriages for hire.
The problem with discussing social engineering is that its impossible to discuss it narrowly. The drive to own a car is tied to the social engineering of the federal highway system. Its also tied to the industrial revolution and the movement from the farm to the city. None of this is strictly speaking "Natural." Its all one form of social engineering or another.
We've been trained to want to own a car and have mobility. That's been socially engineered into the American psyche. If the government is trying to socially engineer a little of that out. Well, why is it worse now than it was then?
The answer is, to quote Yoda: It's no different. Only different in your mind.
YoHo1975I agree that not all subsidies are equal. Also, to be clear, I never meant to imply that any specific subsidy was ongoing, only that at any given time for the past 150 years, the government was subsidizing the railroads for the benefit of the public. There is a common misconception amongst the public that commuter or passenger trains are overly subsidized and thus somehow bad. That if the route was worth while, a subsidy wouldn't be needed. My contention is that that is obviously not true. Witness the entire history of transportation. By that logic, airlines are not useful or needed, Railroads of all types are not useful or needed, cars are not useful or needed. In other words, the fact that the government will subsidize this rail line is not a proof the the rail line is of less value than any businesses it may displace. It only means that the immediate business of creating and running that railroad all other things excluded is not a viable private undertaking. The health, and vigor of Wisconsin taken as a whole and the communities of Madison to Milwaukee inclusive specifically may very well see incredible benefits that are not tabulated in there narrow view of the financials of that section of railroad.
Also, to be clear, I never meant to imply that any specific subsidy was ongoing, only that at any given time for the past 150 years, the government was subsidizing the railroads for the benefit of the public.
There is a common misconception amongst the public that commuter or passenger trains are overly subsidized and thus somehow bad. That if the route was worth while, a subsidy wouldn't be needed. My contention is that that is obviously not true. Witness the entire history of transportation. By that logic, airlines are not useful or needed, Railroads of all types are not useful or needed, cars are not useful or needed.
In other words, the fact that the government will subsidize this rail line is not a proof the the rail line is of less value than any businesses it may displace. It only means that the immediate business of creating and running that railroad all other things excluded is not a viable private undertaking.
The health, and vigor of Wisconsin taken as a whole and the communities of Madison to Milwaukee inclusive specifically may very well see incredible benefits that are not tabulated in there narrow view of the financials of that section of railroad.
I agree that the question of whether or not something needs to be subsidized is not a good measure of whether or not it is worthwhile. And I also agree that Madison/Milwaukee corridor may see benefit beyond just the obvious benefit of transportation. The only question is whether it is worth it to the rest of the country who must contribute to pay for the Madison/Milwaukee rail project.
It is not hard to benefit a small region with an improvement if the cost of doing so is spread out to the rest of the country. The problem is in extending the improvement to the entire country.
Another problem is that these transportation improvements are not just proposed on the basis of transportation need. The are actively pushed by advocacy groups with an interest in social engineering and changing our lifestyle. They are pushed by government in interest of expanding government.
HSR is always promoted as a way to give people another choice in transportation. But, ironically, the massive public spending by the many for the few on HSR undermines the choice of air and highway options. The promoters of HSR openly admit that the main point of HSR is to get people out of their cars and out of the sky and onto the rails to reduce CO2 emissions. If it were a matter of choice, they would not be on a mission to change peoples’ behavior.
I sometimes wonder if peoples’ love of trains blinds them to these social engineering and socialism aspects of public passenger rail. If they understood these issues, they would understand how some of us can love trains but reject HSR. Instead, they give evidence of misunderstanding this with their stated belief that if you oppose HSR, you must be a “train hater.”
YoHo1975 Bucyrus If those land grants generated more return to the government than it cost them, then they absolutely were NOT a subsidy. Just because they were grants, does not mean they were subsidies. Ignoring for the minute that there is a question on the table that the government made their money back at all (or rather, made it back in a timely manner) I DEFY you to find a valid recognized definition of the word subsidy that agrees with what I quoted here.
Bucyrus If those land grants generated more return to the government than it cost them, then they absolutely were NOT a subsidy. Just because they were grants, does not mean they were subsidies.
If those land grants generated more return to the government than it cost them, then they absolutely were NOT a subsidy. Just because they were grants, does not mean they were subsidies.
Ignoring for the minute that there is a question on the table that the government made their money back at all (or rather, made it back in a timely manner)
I DEFY you to find a valid recognized definition of the word subsidy that agrees with what I quoted here.
I have already read several definitions of subsidy as we have been discussing it, and your protesting my last comments does lead me to give the definition some more thought. I guess that if a government grants anything of value to anyone, it amounts to a subsidy. So you are right that a land grant has to be a subsidy. However, one might question whether a land grant is really a grant if there are strings attached. I guess it depends on the value of the strings in relation to the size of the grant.
But what if the subsidy is paid back? In that case, the subsidy would be cancelled. The recipient would no longer be operating under the subsidy. If the subsidy were paid back, it would be accurate to say that the recipient is not subsidized after the payback. But, nevertheless, it would be accurate to say that the recipient had been subsidized, even if only for a moment.
So I conclude that the term, subsidy, although basically definable, is meaningless unless placed into the context of its actual specific application.
But why are we discussing subsidies here? I assume it goes back to your apparent contention that it is okay to subsidize HSR because government subsidizes nearly everything going all the way back to the land grants. However, as I mentioned in post #4, page #5 of this thread, comparing things that can be called subsidies often amounts to comparing apples to oranges. To get some degree of a meaningful comparison, we need the following criteria:
1) A definition of subsidy.
2) A measurement and quantification of the subsidy.
3) An explanation of who pays the subsidy and who benefits from it.
DeggestyAre you saying that none of these roads, except possibly the Manitoba, received grants? If so, you are mistaken. I do not know about the Manitoba myself, but all did, to one extent or another.
The quotidian fallacy of comprehension is mixing small amounts of one truth with large amounts of another and announcing that the large truth must therefore be false.
Virtually all railroads received "land grants" for their right-of-ways. That didn't make them land grant railroads. Many railroads received "incentive" grants from both state and federal sources, generally greased by payments to legislators. Small in comparison to the project size, that likewise did not make them "land grant railroads."
Railroads that existed purely because of massive land grants, and would not have otherwise existed at the time of their construction but for the artificial incentive of massive land grants and existed only because of them, qualify as "land grant railroads."
BucyrusIf those land grants generated more return to the government than it cost them, then they absolutely were NOT a subsidy. Just because they were grants, does not mean they were subsidies.
Here are some definitions from the web:
a government grant used to save or stimulate a particular operation or whole industry sector.www.tuition.com.hk/geography/s.htm
Money given to producers to reduce costs hence the market price of a good or service.www.bized.co.uk/virtual/dc/resource/glos6.htm
a grant paid by a government to an enterprise that benefits the public; "a subsidy for research in artificial intelligence"wordnetweb.princeton.edu/perl/webwn
A subsidy (also known as a subvention) is a form of financial assistance paid to a business or economic sector. ...en.wikipedia.org/wiki/Subsidy
financial support or assistance, such as a grant; money granted by parliament to the British Crown en.wiktionary.org/wiki/subsidy
The LAND GRANTs whether they paid off or not, whether they were advisable or not (I'd argue that despite the abuse of the system that ultimately, the transcontinental railroads to California were a net benefit to the country in the end.) THEY WERE A SUBSIDY!
Falcon48 The importance of this practice is that, after the railroad was built, the government sold its retained parcels. The money it received for these parcels typically exceeded the value of the entire strip (both the rail granted property and the retained property) had before the construction of the railroad.
As an example.The largest land grant was to the Northern Pacific Railway. The railroad land grants became an impediment to the valuation of government lands. As I have mentioned, Government land was set by law at $1.50 an acre.
But, in studies done, the NP rarely sold its land to promote development. In a homestead study area, during the 1880s, the NP sold lands at prices that ranged between 16 and 60 cents an acre. This essentially killed Government land sales. But, NP limited its sales primarily to insiders and speculators. This limited such sales. After that time, the Government Land Office, for instance, sold 14.8% of its lands available in the study area, while the Northern Pacific sold only 8.3%. This was through 1899. By 1908, the Government had sold 44% of its land open to homesteading, the NP had sold only 18.2% of its land grant lands in the study area (which was an agricultural area in Eastern Montana; most land grant lands were not sold).
During the five-year period ending in 1903, the NP sold its land for $1.35 per acre which, in essence, encouraged homesteaders to take NP land in preference to Government land. Only the severe limitation on NP's land sales allowed the Government to make sales at all. In essence, the railroads lowered the value of Government holdings by underpricing, for a forty year period, the price Congress permitted for the sale of Government lands. This slowed, rather than encouraged, development by impeding Government policy to develop homesteading.
At the same time, comparable areas sold adjacent to a non-land grant railroad, the Great Northern, showed that settlers were able to assemble more reasonable and efficient farmsteads taking into account topography, whereas this had been much less prevalent BECAUSE of the checkerboard pattern created around land grant railroads which generally resulted in one or the other (RR or GOV) land being unavailable at the time the farmstead was created -- and that was generally due to railroad policy of not selling. That is, the "checkerboard" of railroad land grants produced less efficient economic units when finally sold into private hands. That handicapped the economic development of the West.
And this begins to develop what I think is the obvious economic argument: the Government could not give away 40 million acres for free, and then think, as the Poster apparently believes, that "free land" would ever honor any economic incentive to develop a true market price but would, instead, glut the market with fire-sale prices DECREASING the value of the remaining Government land.
At the same time, as Government land sales developed the country, the NP was able to then turn around and utilize the resulting scarcity of cheap government land to sell at prices 3, 4 and up to 10 times what the government land had sold for.
And this goes to a basic economic principle and is why I am surprised to see an entirely make-believe argument here: the idea that putting millions of acres, units, anything, on an undeveloped market created great wealth rather than the expected economic effect of reducing the per-unit value. The fact that it is offered here to support the notion that the Government obtained some great wealth by offering its own competition for sales by providing millions of acres of free land is incomprehensible to me. It doesn't, it can't, it never will work that way.
Falcon48 I just want to make the point that, unlike modern Federal subsidy programs, the Federal government MADE money from the railroad land grants. It did this in two ways: (1) Federal railroad land grants were typically made in a "checkerboard" pattern. In other words, in one area, the railroad would receive a parcel of land on, say, the north side of the railroad, while the government retained the parcel on the south side. Then, as you went down the line, the railroad received a parcel on the south side, while the government retained the parcel on the north side, and so on down the line. The importance of this practice is that, after the railroad was built, the government sold its retained parcels. The money it received for these parcels typically exceeded the value of the entire strip (both the rail granted property and the retained property) had before the construction of the railroad. In other words, by making the land grants, which enabled construction of the railroad, the government increased the value of its retained parcels much more than the value of what it had given away. That's a nice deal for Uncle Sam.
(1) Federal railroad land grants were typically made in a "checkerboard" pattern. In other words, in one area, the railroad would receive a parcel of land on, say, the north side of the railroad, while the government retained the parcel on the south side. Then, as you went down the line, the railroad received a parcel on the south side, while the government retained the parcel on the north side, and so on down the line. The importance of this practice is that, after the railroad was built, the government sold its retained parcels. The money it received for these parcels typically exceeded the value of the entire strip (both the rail granted property and the retained property) had before the construction of the railroad. In other words, by making the land grants, which enabled construction of the railroad, the government increased the value of its retained parcels much more than the value of what it had given away. That's a nice deal for Uncle Sam.
Except that this is historically false. It is a false economic argument as well, but that's for later.
One of the "purposes" of railroad land grants was to address long-standing complaints of states and territories that the Federal Government was impeding development of local political jurisdictions by retaining ownership of land it had, uh, bought from the Indians. The land could not be taxed. The Federal Government's response was that, by transferring land to railroads, it was creating taxable property for state, territorial and local government.
Welllll, the "catch" was that nothing could be taxed until it was "proved," that is, when railroads did the surveys to identify their sections. They didn't do it. It couldn't be taxed until it was identified. There was no incentive to survey the lands. Of course, railroad policy was to delay "proving" as long as possible to avoid contributing any money to local development. The historical problem was that the Government could enjoy no benefits from any supposed increased value because it could not sell anything until the railroads had first "proved' their sections. It could not sell land. It could not sell timber. Mining claims were delayed. Grazing rights were in dispute. All of this delayed, rather than assisted, in the development of the West because it prevented the Government from putting lands on the market, or marketing resources such as timber, grazing, minerals and water, that it had previously been able to offer unhindered. It was a net loss for all of those lands.
"Nice deal."
YoHo1975 The government is not a business that should do things based on profit motive. It's job is the promotion of life, liberty and property for all Americans. In either case, the promotion of the railroads for the betterment of the country has long been funded by the government. That makes it a subsidy. The fact that those land grants generated money does not somehow make it not a subsidy.
The government is not a business that should do things based on profit motive. It's job is the promotion of life, liberty and property for all Americans.
In either case, the promotion of the railroads for the betterment of the country has long been funded by the government. That makes it a subsidy. The fact that those land grants generated money does not somehow make it not a subsidy.
And if the government entered into the land grant agreement for the purpose of making what you call a profit, there is nothing wrong with that. What is wrong with “the people” making a profit collectively? Why wouldn’t a profit by government add to the life, liberty, and property of all Americans? Back in the land grant era, the government was probably capable of making a profit in concert with the private sector to their mutual benefit. Today they are not.
To take an installed example, the Chicago El runs on a subsidy. If you were to remove the CTA, because it is subsidized, the economic impact to the city and people and thus the loss of tax revenue would dwarf the cost of the subsidy.
The government is not a business that should do things based on profit motive. It's job is the promotion of life, liberty and property for all Americans. If they determine that a rail line is in the public interest more so than the people and businesses displaced, then subsidizing it is their job. It is no different than them determining that DM&E or the Mayo Clinic and associated ranchers perform more of a benefit to the people with regards to the potential Powder River Coal line.
I hadn't been following this thread. But I looked at it today and found, somewhat surprisingly, that it had morphed (in part) into a discussion of Federal government land grant policy in the 19th century.
I don't want to get into a long discussion of this subject, since I'm sure it has been addressed ad nauseum in older threads. I just want to make the point that, unlike modern Federal subsidy programs, the Federal government MADE money from the railroad land grants. It did this in two ways:
(2) One of the conditions of the land grants was that the railroads receiving them had to handle government traffic for free or at reduced rates (typically half of the commercial rates). These requirements stayed in effect through two world wars (they were finally repealed in 1946 or so) and conferred an enormous ecomonic benefit on the Feds. Another nice deal for Uncle Sam.
The bottom line is that the railroad land grants were nothing like modern Federal government give-away programs, where the government pays out great gobs of money and gets no financial return. The land grants were shrewd business deals from which the government profited hansomely. Modern politicians could learn something from them.
It was an expensive route, however, since the Milwaukee, receiving few land grants, had to buy most of the land or acquire smaller railroads.
aka, the Milwaukee paid their own way rather than having the land gifted to them by the government meaning that the managers of the milwaukee had to be smarter with their money.
I assume 100 years was a broad reference to the time between bankrupcy of the heavily land granted railroads (Union Pacific) and those listed (Did Milwaukee fall into receivership at all prior to the end?). It might be better stated as 80-90 years.
ICLand Murphy Siding ICLandThe largest "private" railroads on the frontier, Milwaukee, Burlington, Rock Island, Illinois Central -- all of which had also added thousands of miles of lines -- did not enter receivership How do you see them as being any different? 100 years?
Murphy Siding ICLandThe largest "private" railroads on the frontier, Milwaukee, Burlington, Rock Island, Illinois Central -- all of which had also added thousands of miles of lines -- did not enter receivership How do you see them as being any different?
ICLandThe largest "private" railroads on the frontier, Milwaukee, Burlington, Rock Island, Illinois Central -- all of which had also added thousands of miles of lines -- did not enter receivership
100 years?
Thanks to Chris / CopCarSS for my avatar.
ICLandThe largest "private" railroads on the frontier, Milwaukee, Burlington, Rock Island, the Manitoba, the Illinois Central -- all of which had also added thousands of miles of lines -- did not enter receivership. Possibly excepting the Manitoba, all of those were cut out of "normal" market expansion by the massive economic intervention of the US government through land grants.
Johnny
ICLand What causes "venality"?
Murphy SidingICLandThe largest "private" railroads on the frontier, Milwaukee, Burlington, Rock Island, Illinois Central -- all of which had also added thousands of miles of lines -- did not enter receivership How do you see them as being any different?
Can't afford to fuel up the big SUV? Tired of fighting idiot drivers in gridlock traffic? Well there certainly must be SOME solution. What? they want to raise my taxes to install some kind of what do you call it, light rail line? Well THAT IS OUT OF THE QUESTION!!!!! PUBLIC TRANSPORTATION IS FOR POOR PEOPLE!!!!! Not in MY backyard!! Unfortunately, that is the mentality of our country these days. These affluent credit card dependant idiots cannot see beyond their overmortgaged "Mc Mansions" and realize the true facts of life. All their Lincoln Navigators, and Cadillac Escalades with the DVD screens in the back seats (what ever happened to families talking on drives)? And the heavy air bags, (they need those because they can't be bothered with paying attention to driving, what with the cell phones, GPS, DVD's, etc. and could crash at any time). We have these 5000 pound behemoths going down the streets with self-centered, idiotic drivers at the wheel. All the time sucking up around 8 miles per gallon. What really burns me up is when I see one of these rigs with a "Green-Environmental" type bumper sticker. You know what I'm talking about, you have seen them... Makes me sick. But these kind of people will fight tooth and nail to keep any kind of commuter rail system from being established anywhere near their town because " It would be a niusance"... "too much noise", "not safe for road traffic", Yes, I've heard them all. But next time gas hits $5.00 a gallon, these same narrow-minded idiots will be the first to complain.
DeggestyI will not argue against overbuilding and shaky financing being causes of the panic, but, how did the granting of land cause railroad overbuilding and shaky railroad financing? Was it not the venality of builders and financiers that brought about these two causes of the panic?
Well, if there is an incentive to build 16,000 miles of railroad that wasn't justified by demand, sucking up nearly 7% of the GDP in capital investment that generated a negative return, sucking up capital that would have accelerated a normal economy, deflating in the process the entire US economy for a half a century thereafter, what WOULD you call "overbuilding" and "shaky railroad financing"?
The two biggest railroads entering receivership in 1893, causing the worst depression in US history up to that point -- the "railroad financing bubble" -- were the biggest recipients, by far, of government largesse in history. They were purely the result of government intervention, and their simultaneous failures crushed the US economy as a result.
The largest "private" railroads on the frontier, Milwaukee, Burlington, Rock Island, the Manitoba, the Illinois Central -- all of which had also added thousands of miles of lines -- did not enter receivership. Possibly excepting the Manitoba, all of those were cut out of "normal" market expansion by the massive economic intervention of the US government through land grants.
What causes "venality"?
Paul_D_North_Jr Yep - my memory banks worked OK this time - the "Panic of 1893" is also known as the "Silver Panic". See - http://en.wikipedia.org/wiki/Panic_of_1893 (usual disclaimers apply), although that article cites railroad finances as well as silver as the causes - and mirrors my post above about the similarity with the dot-com bust and current real estate speculation bubbles, etc. (Hey - maybe those Wikipedia people do know what they're writing about ! ) Seriously, the article has lots of footnotes and referneces, and appears to be pretty well done. But better yet is a mongraph that I also stumbled across, somehow indexed or referenced under "Silver Panic" [13 pages, approx. 84 KB in size]: Grover Cleveland and Sound Currency By Lawrence W. Reed President, Mackinac Center for Public Policy Midland, Michigan Delivered at the Durell Colloquium on “The Role of Markets and Governments in Pursuing the Common Good” Hillsdale College October 28, 2006 I recommend it to any of the current audience that has an interest in government, politics, elections, budgets, spending, monetary policy, the 'gold and silver standard' debate, etc. It's a pretty good read - I learned a lot about Cleveland too, which may surprise and impress some of you to whom he's known only as a punch line or answer to a trivia question. - Paul North.
Yep - my memory banks worked OK this time - the "Panic of 1893" is also known as the "Silver Panic". See - http://en.wikipedia.org/wiki/Panic_of_1893 (usual disclaimers apply), although that article cites railroad finances as well as silver as the causes - and mirrors my post above about the similarity with the dot-com bust and current real estate speculation bubbles, etc. (Hey - maybe those Wikipedia people do know what they're writing about ! ) Seriously, the article has lots of footnotes and referneces, and appears to be pretty well done.
But better yet is a mongraph that I also stumbled across, somehow indexed or referenced under "Silver Panic" [13 pages, approx. 84 KB in size]:
I recommend it to any of the current audience that has an interest in government, politics, elections, budgets, spending, monetary policy, the 'gold and silver standard' debate, etc. It's a pretty good read - I learned a lot about Cleveland too, which may surprise and impress some of you to whom he's known only as a punch line or answer to a trivia question.
- Paul North.
ICLand "The Panic of 1893 was a serious economic depression in the United States that began in that year. Similar to the Panic of 1873, this panic was caused by railroad overbuilding and shaky railroad financing which set off a series of bank failures. Compounding market overbuilding and a railroad bubble was a run on the gold supply and a policy of using both gold and silver metals as a peg for the US Dollar value. Until the Great Depression, the Panic of '93 was the worst depression the United States had ever experienced." Please note the distinction between "caused by" and "compounded by."
"The Panic of 1893 was a serious economic depression in the United States that began in that year. Similar to the Panic of 1873, this panic was caused by railroad overbuilding and shaky railroad financing which set off a series of bank failures. Compounding market overbuilding and a railroad bubble was a run on the gold supply and a policy of using both gold and silver metals as a peg for the US Dollar value. Until the Great Depression, the Panic of '93 was the worst depression the United States had ever experienced."
Please note the distinction between "caused by" and "compounded by."
DeggestyICLandAside from two bankruptcies for the NP and one for the UP, ripping millions out of the US economy, and particularly when both simultaneously bankrupted in 1893 -- strictly a government land grant fiasco -- which precipitated the worst and longest financial depression up until 1933. What did the granting of land have to do with the Panic of 1893? The dishonesty which precipitated the bankruptcies was the cause of the panic; that the government granted the land was not the cause.
ICLandAside from two bankruptcies for the NP and one for the UP, ripping millions out of the US economy, and particularly when both simultaneously bankrupted in 1893 -- strictly a government land grant fiasco -- which precipitated the worst and longest financial depression up until 1933.
What did the granting of land have to do with the Panic of 1893? The dishonesty which precipitated the bankruptcies was the cause of the panic; that the government granted the land was not the cause.
Well, let's see: Government handing out "free money." Nothing to see there. No cause of anything.
Wow.
Wikpedia actually gets this right:
If anyone wishes to start an appropriate thread, that is indeed perhaps more appropriate.
In Chester, SC, they have opposed a CSX intermodal yard that decidd to stay in Charlotte as well as a freight car builder that instead built in Alabama. The latest NIMBY action was against a proposed incernerator that they think they have defeated. There's no rationale here; they had no problem with a prposed ethanol plant six miles from the city limits. The ethanol would move out via 18 wheeler. The 18 wheeler traffic was, they said, the main reason they didn't want the intermodal yar. But those 18 wheelers would have carried mostly non haz mat products (ten miles fromthe city and mostly going the other direction) while the ethanol would be passing through the city limits in some cases.
Didn't seem the matter and now the point seems to be oot as the funding never came on for the ethanol plant.
President, Mackinac Center for Public Policy
Midland, Michigan
Delivered at the Durell Colloquium on
“The Role of Markets and Governments in Pursuing the Common Good”
Hillsdale College
October 28, 2006
This goes back about 20 years. I live next to the tracks of the now non operating for sale Minnesota Zephyr. They USED to have a steam engine operate on this line until neighbors complained of the noise. Some people at a city council meeting said the engine scared their children. They were made to no longer use the steam engine in their operation and I think it went up to Osceola Wi. If not for that I could have been lucky enough to see a steam engine go by the house 2-4 times a day from 1997 through 2008 when it stopped. If it had steam who knows, maybe it would still be operating today.
Modeling the "Fargo Area Rapid Transit" in O scale 3 rail.
Flashwave marcimmeker Presumably that "useless" resource was worth something to the people that were living there (you know, the ones called Indians and later Native Americans or First Americans). Otherwise they would not have felt the need to fight those who came and stole their land and put them in concentration camps, sorry "reservations". If I understand his point correctly, the land's value is a relative term. It grew crops, it fed animals, it fed the indians, but what's the point in having a million dollars if there's no place to spend it? There was such plentifuls amount that could be sold, but no way to do so. Hence, the waste or "Useless". The railroads created their way to that market, and what Americans called value increased. And since the Indians' interest was in themselves, not market greed, they did not need the railroad, and the land was fully valuable already. [snip]
marcimmeker Presumably that "useless" resource was worth something to the people that were living there (you know, the ones called Indians and later Native Americans or First Americans). Otherwise they would not have felt the need to fight those who came and stole their land and put them in concentration camps, sorry "reservations".
If I understand his point correctly, the land's value is a relative term. It grew crops, it fed animals, it fed the indians, but what's the point in having a million dollars if there's no place to spend it? There was such plentifuls amount that could be sold, but no way to do so. Hence, the waste or "Useless". The railroads created their way to that market, and what Americans called value increased.
And since the Indians' interest was in themselves, not market greed, they did not need the railroad, and the land was fully valuable already. [snip]
Old story - perhaps apocryphal, but here goes:
Erie RR Right-Of-Way Agent negotiating with the hard-nosed Chief of an Indian tribe in the 'Southern Tier' of NY state, for the Indians to just give or donate the ROW to the railroad: "But, Chief, look at it - the land is rocky, it's no good for growing crops, there's no animals there to hunt, there's not even any water - it's just not worth anything to you and your tribe !".
The Chief, after a moment's reflection: "It pretty good for railroad !".
The Erie paid.
I believe that Carl, Johnny, jeff, and maybe a few others here will recognize the source(s) of that account.
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