, 1873-10-21

yANpERBILT's WATERED-a -aTocK,
We reproduced in THE TRIBUNE Of yesterday |
aomo circulars prepared by Mr. Rufus Hatch, Of |
Now York, somo two yours ago, giving the actual |
figures Of tho stock-watorlug operations Of tho |
New York Oentral l. Hudson River, and several |
othor railroads. Thoao circulars show tint tho |
total amount Of atook-wntoring, in ono form |
or another, Of the enumerated roads, Ia
s135,1o5,d38, or enough, 81 Mr.. Hatch easi-
mates, to build and equip tirat-class, double
track road, with steel raila and iron bridges,
from Now York to Omaha, including D line
to st. Paul. Most Of these roads pay divi-
donds not only on tho cost Of thor property, but
| on the full amount OF tho watorod stock which
| represents no Investment. Some of them, how
| ever, oYeraid the business 30 tremendously tint
| they hayo mover becn able to pay dividends on
| nnything but their preferred stock. Theac divi-
donde come out Of the pochcts Of tho peoplo.
There Is no othor Hource from which they could
como. Tho fictitious capital would, therefore,
If actually invested, supply what many able men
haye decided would bo the bost relief TINT could
DO afforded tho people, riz: double-track,
stockrall frolght railroad from tue intorior to
tho soaboara. Tho o1coBs Of freight charges
which shippers now pay Oh this fictitious capital
would pay fair dividend on tho cost Of such
road.
Mr.. Hatoh's circulars aro q complete nnswcr
to those who oauuot or will not see any connoc-
tion botwcon watered- stock ind freight charges.
Iu tho caao Of Now York Central, there WAS d
atocl-watoring operation on tho consolidation,
in tile year 1854, tho various roads from which
tic Now York Contral was mado up-conncctinS
liueg running from Buffalo to Rochester, Nocll-
ostor to Syracuse, Syracuse to utica Utica to
Schenectady, and Schenectady to Albany
Since thcn thore layo boon periodical additions
to tho capital stock (at Time to tho amount OF
90 per cent? whenever Dir. Vanderbilt conceived
that lo could collect from tho peoplo enough
money to pay dividends upon larger amount; Of
capital The total fictitious capital ct tho Nov
4 York Central l. Hudson River Railroad is 857.-
$4,000, On which the people are required to
my an annual Tux OF a3,22s,o o3o. This Is at the
rato Of s190, ,2G4 Of watcr for every milo Of tho
road, and every milo ID made to earn 0,000 q
yoar ovor aud above the interest on the amount
Of ita actual cost.
The Lake Shore l. Michigan Southern Roaa,
the Western complement Of tho central, makes
almost as bud d showing Consultations which
brought the line from Buffalo to Chicago under
ono organization furnished tho principal pro-
texts for increasing the capital without addition
al Investment. In the oleyclaud, Painosville
: t. Ashtabula Road, which forms part
: of this line, the aggregate dividends. fo1
Six years. including bonds aud etocks, WORK
L 23211z por cent, or 10 per cont per annum. Or
n the basis Of the original stock, $4,000 Fro"
into S32 GOO in these six years., hesidea earning
!, $1,000 III cash. Tho total Watering Of tho stool
:, Of tho present Luke Shore organization is S20,'
r. OG5,s70. This sum added to tho fictitious stool
!, Of tho Now York Central 4 Hudson River Rail
J, road makes total Of s77,G41,670 Of wator, ol
10 which tho people pay annual tax Of 5G,2 IL
|, 10 koep.np tho dividends. It the roads earned
t. Dor cent dividends on their actual cost, which
): about s85 600 O0O pBtcad Of tl,oir nominal capl
10 te. which ia 9103, 100000, tho freight charge
ky might be reduced noar1y ono-half TUG presen
g. ratc MY. Hatoh figures out thnt all tho graf
10 transported over Vanderbllta roads pays trlb
r. nto Of 10 cents d buslel III order to rnatntai
Il. the value Of tIe fictitious stock and bonds.
II wo should Include tho Union Pacific Raj
roaa among tho Vanderbilt roads, the flctitior
capital account would bo measurably increased
Tho entire capital stock Of this road Is 1ctitlor
On siucc 1t was neyor paid for, and since tile actu
70 cost of tho road will not reach tho aggregate
4 the bonded indebtedness. This would add $50
30 346, 900 to tho fictitious capital aceoun
DO demanded Us soon as the cou
10y try groEa rich enough and populous enoul
lor to pay them. If wo d,duct from the nomin
ho capital Of these roads, which, by tho wey, 2
'k- not ainnors above all others, tho amount
7rs STILL ,79G, is there any wondor TINT tho nm
ho kot yaluo OF thca6 stocks Aas loolinod at auoh
on fearful rate during tho paat four wcolsa
l4 there not rather reason to wonder tlat they 81
o.. aell at such q high figure? 30 far rs New Yo
at1- Central and Iaho Shore aro concerned, If th
'ug were stocked ut their actual cont, they would
ut q premium even In tho hardest times, and
'a' W0ulQ not pp HceedaaF1 W uttus y" ha "fo4 "
oy, more than hull what they earn now to keep tn
@ep thoye.
as :-==--.-----
ill., It lB gonoraily understood thas tho Nesl
an- party count upon hugo oampa'gn~!tuna1 to
ops mado up from throo SOURCES ~ FROM tho
aap loon p-keeporn (2) from certain Wholesale Aq,.
nan merchants o2 other .ciioa who soil in Chlcag
re- and (8) from tho ga1nblsro, who. aro expected
OF make up tho largoHt pool OF a@l. " course Il
)oss necessary tor tho combination to ho hbars