The progressive farmer. [volume] (Winston, N.C.) 1886-1904, 1891-01-20

received from the capital actually invested
1t has encouraged extravaganza and cor
ruption; has been made the means of
swindling innocent investors out of mil
lions of dollars; has promoted stock
gambling and, worst of all, b IS imposed a
serious and continuous illegitimate burden
upOn commerce. In the words of +. B.
Tnurber, Excessive capitalization oper-
ates as a mortgage upon the industry of
the country, and as a machinery for con-
centrating wealth in few hands wherever
the power exists to impose rates for trans
portstion VIII CHI will yield dividends on
watere / stock"
By reference to the statement of Mr..
Poor Testimony, p. 228), he extent to
which this vicious practice has been in
dulged IN will be better understood. Mr..
Poor estimates that Of the capital stock,
bonds and other evidences of indebted
ness issued by the railroads of the United
States, amounting in the aggregate at the
close of 1883, to $7,495 All, 81, at least
81 500 900 900, represents what is known
as 'watered stock" Others have pro-
no 1nced this estimate too low and atten-
ton is invited to the statements of Messrs.
Poor, Sterne (p. 79), Thurber Opp. 274
and $3.50, O'Donnell (p. 49,, and King Up.
1900. for Illustrations of the effects of this
practice.
BURTON @. COOK, ATTORNEY NORTHWESTERN
RAILROAD.
Senator Harris-I should like to have
your opinion upon this question: Assume
that al these just and proper charges
-~l1oh haun inst onI1nnrStoH-f
payment of employees, a fund for keeping
the road in perfect repair, etc, have been
provided for. What, in your opinion,
over and above hese expenses upon the
actual capital invested in the road2
Mr.. Cook-I do 1T know of any reason
why capital SHOULD command any larger
return in railroads than it would in any
other enterprise about which there was
no more risk. Perhaps there should be
something allowed for risk.
Senator Harris-I would like to have
your opinion approximately, or as near a.
you can give it, as to what would be a
fair dividend.
Mr.. Cook-I should not have much
confidence in my opinion but if l had to
tx it I should fix it at 7 per cent.
Sc ator Harris-I understand you to
say that you would fix hat mount of in
come by the pr sent value of the roat.
Mr.. Cookies, sir; road and equ p
ment.
Senator Harris-Does not the question
of value change? For instance, if you
paid five times as much, or twice as much
for iron rails at the time you built the
road as steel rails now could be purchased
for, would not that affect the question OF
the present value of the road
Mr.. Cook-My idea would be that it
should be founded upon its present VGt~c,
irrespective of dts cost. I do not believe
anything that is fictitious is profitable to
the corp ration or to the people. would
get down if / could to a square, honest
rule which should be infexible every
where. l believe the prosperity of both
the pub ic ard the roads would be in
creased, and increased in yer proportion
Senator Harris-Your idea, then, would
be to ascertain the actual value year by
year2
Mr.. Cook-Whenever you want to
FIX rates; whenever there should be q
sufficient fuctuation to jus ify it.
Senator Harris-To determine the then
actual value of the road2
Mr.. Cook-YeS sir.
CAMPBELL WALLACE, CHAIRMAN OF THE RAIL
ROAD COMMISSION OF ORG
Senator Harris-Is the cost of the road
an element in fixing a reasonable rater
Mr. Wallace-What would be the cash
value of the cost I think would be proper