The St. Louis Republic. [volume] (St. Louis, Mo.) 1888-1919, 1900-07-24
SPECIAL BY CABLE.

rail market. and what is fine exact financial
condition Of the United States. They have
| seen sudden rises without much apparent
| cause, and slumIs from no appar"n: reason.
| They have wondered and wondered. and
asked vainly. What does it mean
| There is. perhaps, no one to-day who
| could give such irquirers :" good. sound.
! well-founded n reply - J. r. k~ene, th" as
tute. cool-headcG fiuancier. who has 50
often gone the contrary TO the aA-G.revail-
! ing market ideas and come out the ricnt
| man. who boldly says I'm the face OF al
| proudly: Il belong Ia no clique; am 4
member of no combination. l am not In
! fluencei by any st # rrorncteIs-I slecu-
| late purely and simply
| \ fearless speoulat"r KCene is-tn fact
| one who knows every trj-k upon the com
| pucated chesshoard Of American business
| procedure-who could. were lie willing
| make disclosures of the shady methods
| practiced by some of those who have en-
rIched themselves Ivy selling wate-ed stock
TO shareholders. which would create 4. sen
| sation.
But he will not srsak-at sll events. not
| to-day.
| Mr. keene Is I'm London and did not en-
| courage the thought of giving his views for
ELb4itIticil bNl bIl't 'AtfNii4s- N''''7-''-'' -
| do SO, spoke with Il frankrcss and serious
| thoushtfulness which 20 all who know him.
is characteristic Of the man.
The conversation was opened by asking
Mr. keene's opinion for The Republic why
American rails are so low. whereas Amer!-
can fuanCiers who have been ever here
stated that trade was booming with the
railroads and that more freight was be-
ing offered than they could carry,
American rails" replied Mr.. Keene, ARE
not at all low now. In fact. l consider them
high
/ suggested that they were distinctly low
compared with what they were this time
last year.
They were ahnormaIy high then" he
said, but those were extraordinary lines
never saw such times. You cant keep up
q boom Of that sort. A reaction must oc-
cur
HAS IT taken place. then? DO YOU think
that the market will not improve" ] asked
Il don't see any reason" he answered
why II should not. There are good. ecund
railroads in the United States. but the ma
jority have been robbed TO death 10y Peo-
pie in connection with them. Only in ah-
normal times can American railroads re
made TO pay. 1t is one constant struggle
and only achieved ny the very best manage
ment in the reduction of working expenses
and so on which enables the payment of
dividends
After the Spanish War there was great
buoyancy. People thought new era had
come. hut that was not possible under exist
Ing conditions"
After pause, during which Mr.. keene
thought deeply, he resumed:
The whole thing lies in this. There is
not a railroad In America, except IN one or
two instances. which has not been ever
capitalized by mismanagement or by the
fraudulent practices of those connected with
II, and placed with the public at ~ per cent
over its value.
From that you see. q road must earn 30
rer cent before the shareholders begin 10
get anything"
Suppose they were TO raise rates.
at is impossible TO put rates hisher. was
the reply. There IS always the pressure OF
people. steamship owners and others, asking
for reduced rates.
"Our very distances are against hich Fa'e'
because people are living far away ana Gun
only send their produce to market uir'ti
very reduced rates. III they are u n'iAe
profit there Is competition
The case IS simply this You utTe 80.
s,b coo 600 capital for concern which oneh'
10 have been capitalized at Svo.rS"S. on
have the almost Impossible task Of earning
a dividend on the larger capital
IF the existing railroad miieage OF va
Tinted States represented fair. honest
outlay from the constitution of the fal;-
road there would he no more secure Ct
more desirable investment in the world hut
as IL represents. in my opinion, as eN'
dencad by the capitalization of bonds ana
stocks. outlay Of 10 per cent greater 'lla.
81 should have been. the struggle 10 pay
fair reasonable dividends Will always be
on, 10 exercise the ability and ingenuity OF
the management in order to FURNISH them
IN after years. while there Will be constant
DerpiexitIes IN solving the problem sat
isfac'orily.
.'If YOU look about you. you Will notice
pF railroad people WHO
account for all the large fortunes of the
United States have been intimately con-
nacted with the operation OF this excess |
of capitalization, placing the proflis To ,h1ir
credit In one way or another, they nave
generally become attached to transporia-
ton interests.
THAT being the case. II requires 2 great
dash of discrimination on the part OF buy |
ers in making Investments In American rail- |
read securities to find out the character OF |
the management of railway This must !
be taken into account. n correct lujg- !
mont as To the intentions OF the gentlemen /
composing a board and as to the character !
Of The board a whole, is just as I'm !
portant as the matter Of the investment (
Itself We must know, IL the directors pro !
nose TO put ten millions into their pockets. |
Some railroads have conservative. others |
speculative. boards
What do You say about the increase of |
trusts, Mr.. Keene?'
In America to-day. he said. we may !
saw 90 men control the manufacturing and !
prominent businesses OF the country The |
great question to-day has come 20 be that |
Of monopoly. No independent man can 20 !
into business without the monopoists com /
ing down and crushing him out. In this way \
il has come to be that he has much bet |
ter chance In England, where monopoly
tyranny-does not exist. or. at all events is !
not so strong.
with a few men thus in control they /
can fix wages end they make Il so |
that money is either easy or tight as they /
choose If any other man tries to compete /,
with them, ne is simply crushed. The re- /
suit is that today in the United States |
II gre are no more INDEPENDENT mon. except /
the farmers
Always bear In mind rs a Fundamental |
principle, when talking of the prospects e |
the United States that you must have good \
crops as a sine qua non. for such alone l
maintain traffic, for corporation stocks. and |
their welfare is their business. These are |
the fundamental principles for the pros /
perity of the United States
How do You view the business sItua-
tom asked.
Il do not replied Mr.. Keene. thought
fully, look upon the business situation in |
the United States as prosperous
Why
My particular reason is that We have ,
had a period of four years of extraordinary
excitement, which is now on the ehb. That
kind of business cannot live when the eX-
cltement is over. You have that overcapi- |
taiizatior to look at in the eye. Trade IL
always going on. but that is not going to
help you IL yot; have oyerca utalizatton"