The Wichita daily eagle., 1894-03-14
TIE BITTER BIT.

Simon Sterne of New York has well
written paper in the March Forum MAX
ing some timely criticisms on the pres
ent system of conducting American rail-
roads. His intimate acquaintance with
railway projects and management, as
well as his known integrity and national
reputation as writer, gives particular
force to bis pertinent structures, as well
as to the remedies suggested for abuses
but too well known to every investor in
railroad securities. He portrays, in
somewhat caustic terms, the modern
method of procuring a construction
fund by the issue of first mortgage
bonds. after which the projectors issue So
called common stocks" which is placed
on the exchange list to be sold to
to the unsuspecting dupe, whom they
never fail to draw into the scheme by
the articles and bats Of cunning adver-
tisements. This stock, together with
the excess got from the mortgage bonds
oyer and above costs, represents the
profit Of the deal. and the greater the
issue the more abundant the harvest.
The projectors of course manipulate the
corporation so as to elect themselves to
the management of the property. and
future profits depend largely upon the
time the project can be kept a1oat, and
the rate of interest it can be forced to
pay on the real dollars invested in its
paper issue of wind. This item being
secondary to the interest on first mort
gage bonds and officers salaries, is not
always obtained by legitimate earnings,
but there are devices and the never fail
ing remedy of extra charges and rates
which only require arbitrary methods to
supply the needful. These abuses are
as common as household words
in all the newer systems OF
the west, hence the penalties
of extortion which the west has had to
suffer. 1t is the failure, as set forth by
this writer, to perpetuate these schemes
that has forced over 10000 miles of
western ind southern roads into the
hands of receivers during the last year;
but here the writer is most unfair In his
statement of facts, and even prof1igate
in his conclusions as they relate to the
west. With bare assumption he con-
cludes that much of the responsibility
lies at the door of TIE sscrude legislation
of the west'-denominating laws which
have been passed for self protection as
"confiscatory and communistic legisla-
ton" If the efforts of the Iowa legisla-
ture to bring the freight charges on grain
and live stock down to the schedule rate
made for Illinois was "communistic
legislation" then is the universal
autonomy of states humbug. II the
laws enacted in Kansas to prevent the
collection of double the rate in force inn
mediately east of an imaginary
line be confiscatory then may
the organized plunderers and
blood-suckers of the east prepare for
a change of ownership of their subsidiz-
ed properties. We may be culpabie our
selves in SO far as we have voted local
aid and turned every one of these roads
over to soulless corporations; but in this
we have not given title deed to our
right to the only available remedy.
Claiming 1T as right on their part
to perpetuate this jobbery, is the bald
that one class of American
citizens are the born slaves of another.
This we are not ready to grant, and if
these self-appointed censors of our laws
and doings expect to intlmidate western
people by Billingsgate, and charges of
tendencies, they are
without their host.
We will attend strictly to
the making of our own statutes without
or fear of intimidation from
any quarter. Had Mr.. Sterne taken the
trouble to look over a rate sheet, he
would have seen ample cause for all that
has been done or attempted toward reg
ulating these inequalities by Kansas
laws. Failing in this he shows a desire
to cater to popular prejudice, rather
than, even to make the trifling attempt
to ascertain the cause Of our protests.
1t is rare gift to elucidate an intricate
business problem, it is better to be con-
sistent.