, 1873-09-25
THE RAILROAD PROBLEM.
Letter from Josiah Quincy

"a the Editor n the Ne,o l'ork Grnphte
~; ;DosToH, Sept: II. 1873.-ln your favor Of the
IN the Daily Graphic. suggesting tho purchase
OF tho Eric Hallway BY tho State Of Now York.
Az abHenco from the city has proventedmy scoing
the paIorH to Which you ano, can only state
many yoars been of opinion that those immonso nm m
powers, go oaaonstal to tho well-being OF tho
community, should ho managed by tlo peoplo
aenstRsp ior iS RSep9t e. Ss poi9poa e
Boston / Worcester and Woatorn Railroads BY
paying tho shareho1ders tho s,ama thoy lad
originally paid, with intorost at 10 por cent (de-
In my argument | show that their joint cost
would amount to loss than s15, soc, 900, aud that
by making tho purchase, tho State would pro-
vide for paying tho interest on its dobt. and at
tile sano timo rod1ce tho cost Of Transportation
to Its citizens.,-tho truth Of all Of which has
interest opposed mo, and, BY retaining the ablost
lawyers and using Its vast influence, prevented
my SUCCESS. But many who woro induced to
oppose petition which was sustained by tho
QUO hayo ainco confessed that thoy miado great
mistake.
The position held by Massachusetts in rotation
to her railroads is moro favorable than thnt oc-
cnpied BY most Of her slBtor states. BesideH the
powor OF purchasing them at a fixed price, eho
has reserved tho right ito alter, amend, Or ro-
poa1" thoir charters. Sho has also forbidden
any increase Of stock without Bpocinl permission
Of tho Legislature. This has prevented " water
ing" except in Bnglo case. Tho Directors OF
the Western Railroad potitioned tho Legislature
for leave to inofeaHo thoir capital stock, in
ordor" (aH they stated In their report to tho
shnreholdorn IN 18G7) ITO provide funds for tho
completion Of tho second tracs," :" otc. Az soon as
tho Legislature adjourned, they divided it.
as watered Hsocl among themselves
and their shareholders, and in thoir
next annual report stato that "it was
tho Intention of tho Directors from tho first to
issue to tue stockholdors, at an carly day, tho
tion, by arouaing public attoutsou, produced
como benofcial results. Our Legislature inme-
diatoly passed. law subjocting any Director who
thereafter Bhoudvote for ouch an Issue, to i'll
dictment and heavy fino, aud doolarod that the
stock 30 issued should be entirely value1eas.
This was not all. Previously, Whenever new
stock WAS created, it was issiod to tho shnre-
tho difference botwoou par and the market price
to tho shareholders. This, In case Of this road,
amounted to about 80 per cent, and, as they
had tho right to add 55000,0 900 to their
capital, i'll fact dividend Of u, ,50O0 600. Our
Legislature passed. a 1aw requiring thai all addi-
tiolial shares, when It WAS necessary to issue
them, should bo sold ut public auction, and that
moro sllonld be issued than wore sufficient to
meet tho amount required for actual oxpondi-
turo This relieves tl!e public from paying 10
por cont for tho benefit OF stockholders on moro
shares than arc necessary for tho required OBJ
ject.
70 atato my views concisoly: II wore citi-
zen OF New York, should advocate for that
State wlut our Board of Railroad Commissioners
railroads through the State ownership Of one."
JOSIAH Ou1Nny.