Vermont farmer. [volume] (Newport, Orleans County, Vt.) 1870-1877, 1874-11-20
WATERING STOCKS.


This in many instances would bring freights
and fares down to one.half present rates.
But these corporations very readily find a
way to walk around the law. When their
profits are found to come too near to the
standard fixed by law, they issue more
stock. Thus the New York Central, while
it has not increased its length to any ma
terial extent since 1868, has a capital stock
three times as great as it was then, and is
trying to pay profit on this amount of
stock. There is no money invested to bal
ance this increase. The increase is only
nominal. The man who owned one 500
share, by q vote of the stockholders is credit
ed with three shares at 800 each, and thus
becomes entitled in the eyes Of the law to
draw profit on $500 before the rates must
be cut down. The Springfield Republican,
which it will be allowed is good authority,
asserts that on this road "the stock-watering
to say the least has doubled the dividend
claiming capital"
There is, however, one exception to the
general spirit Of imitation among railroads
and that is the Baltimore and Ohio road.
Under the heading ga Railroad that Didn't
Initiate" the Republican says:
The contest between the combination of
the New York Central, tho Eric, and the
Pennsylvania routes to the West and the new
Baltimore and Ohio route is not merely
contest between business rivals, working on
the same plan in common field. Ii is Il
contest between two entirely different prlnci-
Piles of railroad management Tho policy of
Vanderbilt in running the New York Ceu-
trail has been radically different from that of
John w. Garrett in running the Baltimore
and Ohio, and the result of these different
policies is now so clearly to the advantage of
the latter that it deserves attention, not only
from business men, but from every one ip-
terested in the application of morals and
mind to business.
The Baltimore and OHIO road has been
managed, not only with equal and probably
with greater economy on the road, but it has
steadily kept its capital and funded debt
down to the lowest point. Ii is about 500
miles in length and its capital and funded
debt amounted to about S27, 00o, 600 in 1868.
1t is about S36, 500, 900, to-day, and every cent
Oh lnlS tstG0SlOn HIS Dttn pau III hluNplbul-
ed in real improvements. The dividends
have been steadily paid 10 per cent; and u
surplus has been laid by besides, or eXpend-
ed in extensions and repairs and prepara-
tons for the great work which Garrett had
cut out for his road. 1t was never discover
cd that the stockholders had right to divi-
dends on improvements, and hence that
stock ought to be issued to cover the current
expenditure in that direction. 1t was never
found necessary for the managers to go into
Wall street and gamble with their own
stock, to announce new issues from tho pull
pit of the exchange, or even to ''call' the
stock ut all in that forum. Speculation,
which we are often told is rigldly necess ary
feature of all great enterprises, seems never
to have obtained with this stocl:, and 1t will
not be found, to-day, among the tock-lists
of any other city but Baltimore, whore it has
been quoted ut from ITO to 1870, by slow fluc-
tuations, for several years. IL is q home
stock in Baltimore and probably in favor
with small, permanent investors, like the
stocks of some Of our best New England
roads.
The Erie road is about rs long as the origi.
nal Baltimore and Ohio but il had, in 1868,
Il capital and debt of $1,000, 900, and now
has one of ) I26, 900, 900. The Pennsylvania
road staggors under u debt and capital OF
Sill ,00C 200. We do not presume that these
great totals of debt in every case represent
no more mileage than the investment of the
Baltimore and Ohio represents, but, making
all allowances of that kind, it is still proba-
bly, true that these roads are involved, mile
for mile, TO an amount double that of the
Baltimore and Ohio.
The Montpelier Journal tells the farmers
they have made mistake in electing Mr..
Denison, because he was not pledged to
work for them when he goes to Washington.
The od-iashioned party way was to elect a
man pledged to support the party through
thick and thin, and the Journal is an organ
of one of those parties. But the farmers Of
this district knew just what they were doing.
They were independent, and voted for a
man whom they believed to be. the same.
We don't want any pledges from political
candidates, except that they shall be earn
est and faithful in working for the interests
of America-not of a single town, county
district, state, party, or ring. Just such a
pledge Mr.. Denison gave to the freemen Of
the second district-not the republicans, mol
the democrats, mind you, but the treemen-
and the freemen of the second district elected
him. The freemen Of the district are going
to elect their man next time, too, we think
"Tho party" has elected party men long
enough. Let us have few men elected by
the free people of America.
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