The representative. [volume] (St. Paul, Minn.) 1893-1901, 1897-03-31

$l1, ,241, ,569, ,5e5.
Startling as these figures may seem
the limit to the capitalization Of the
roads has not yet been reached, for
upon investigation it will be learned
that their capitalization increased
$644 per mile over the previous year,
while there was only 1867 miles Of
road added to the total mileage. This
increase was brought about by increas-
ing their capital stock 1854 ,517 1882;
funded debt, $50. 166 1903; floating debt,
$35, SIT, ,:5S; showing an increase of liza
bilities Of 1925, 261 343,, and all of this
vast sum goes towards the payment
OF interest on bonds and dividends on
stocks, the traffic being no longer suf
ficient to meet their enormous fixed
charges.
The enormous capitalization of the
roads is now havinga telling effect up
on the stockholders, minor bondhold-
ers and the persons who have extend
ed them credit. The roads can no
legations out Of the earnings Of the
roads. because of the falling off in the
traffic and the mpoverishment Of the
people brought about by our present
ruinous financial policy, and one by
one they are resorting to receivershiPS
as last resort, and finally winding up
their affairs by mortgage foreclos-
ure, forcing out the stockholders and
minor bondhOlders. and repudiating
their debts in legal form, while the
bOndhOlders who purchased the roads
will be the beneticiaries in the end.
or the 1923, 1876, ,404 which constitut-
ed the net earnings of the railroads of
the United States in 1895, $239, ,944 ,229
went towards the payment of interest
and $S1, 375, 744 to the payment of divi-
dends. In the interstate Commerce
Commissioners report for the same
year we find that the amount Of stock
paying no dividend June 80, 1894, was
So, ,066, 15), ,094, or 63 53I0O of the total
amount. The bonds paying no inter-
est was $3.50, 573, 1877, or 14-17. 100 of the
total amount. The amount Of miscel-
lane0us obligations paying no interest
was $53, ,426, ,264, or IL 77-10O, and the
amount OF bonds paying no interest
was $2lO, ,554, or Sc 94-1OO per cent,
making a total of SO. 3SO, 9O7, 7O1 of liza
bilitieS that are in doubt, while it is
only question of time when this
doubt will be removed by mortgage
foreclosure, and the people who hold
these securities will be robbed OF their
equities.
The Topeka, Atchison & Santa Fe
is fair sample of how the holders of
these corporate securities fare at
times Of foreclosure. This road, con.
tanning nearly 1-17th Of the mileage Of
this country and capitalized at $780,,
0OO, O,000,wa recently sold for $50 900, ,OU0,
less than $4,000 per mile, this being
about the average price per mile that
road brings when sold under the
hammer. The bondholders being the
principal bidders and buying the prop.
erty at a low valuation, make millions
out Of the transaction.
This low valuation Of the Santa Fe,
as we'll as that Of the other roads that
have gone through the same process
lately did not cause the freight and
passenger rates to be reduced to con-
form to the new valuation, giving the
passengers and shippers the benefit Of
the reduced rates. A move in this di-
rectiOn would have precipita ted a rate
war that would have bankrupted the
great bulk Of the railroads of the
country.
These manipulators of stocks and
bonds, as we'll as the bond holders who
purchased the roads at greatly re-
duced valuations know that if the
rates were reduced to conform to the
new valuation they would be denied
the privilege of amassing to their al
ready fabulous fortunes.
No relief can be expected for the
shippers, planters and wheat growers
of the Mississippi valley as long as
these railroads belong to private par
ties and are operated for personal
gain, irrespective Of the great wrongs
done the people.
Since an acre of wheat has fallen in
value 1887 between 1891 and 1895, corn
$4.O7, oats 1921 and other cereals in
like proportion, the transportation
question, like the financial Ques tion,
will be one of the leading and FORE
most questions to be discussed by the
people OF the United States for several
years to come.
The transportation rates on ton Of
merchandise, wheat, corn or oats
in 1890 or 1891, was not too high,
considering the prices at that time.
but since that time prices on these ar
ticles have fallen at least 40 per cent,
while the average freight rate per ton
has only fallen 9-100 of cent per mile,
and the shippers and producers Of the
country are clamoring for relief.
In 1874 the Senate of the United
States appointed special committee,
COuSlS UlIS VI Wlllldm w luUOuI, VI WI
nesota; John Sherman. Of Ohio; Ros.
coe Conkln, of NewYork; II. g. Davis,
OF West Virginia; John H. Mitchell, of
Oregon. and S. B. Conover, Of Florida.
This committee spent the entire sum-
mer of 1874 Investigating this subject,
and they reported as follows:
'In the matter Of taxation, there
are today four men. represe nting the
four great trunk lines between New
York and Chicago. who possess, and
who do not unfrequently exercise,
powers which the Congress Of the
United States would not venture to
exert. They may at any time, and for
any reason satisfactory to themselves,
by single stroke of the pen, reduce
the value Of the property of this coun-
try by hundreds Of millions Of dollars.
An additional charge Of five cents per
bushel on the transportation OF GER
eals would have been equivalent to
tax Of $45. COO 0OOSon the crop Of 1873.
No Congress would dare to exercise so
vast a power except upon necessity
of the most imperative nature, and
yet these gentlemen exercise it when
ever it suits their supreme will and
pleasure without explanation OK apol-
Ogy. With the rapid and inevitab BILE
progress Of combination and conSOli-
dation, these colossal organizations
are daily becoming stronger and more
imperios. The day is not distant, II