The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-02-21
Sounds Warning of Peril In
Rate Agitation.
is FOR FAIR DEALING.
Discusses Big Problem at Ban
Quet in New York City.
Gossip and Matters Of Interest
in Railroad Circles.

Iowa club at New York city, electri
fled that gathering by remarkable
speech. tc@
ffr Shonts came out, if not as g
champion of stock watering, at lAas
as a defender of that practice. But
this defense was only Incidental to a
solemn warning of the peril that lies
in the railroad rate agitation at pres
en-. sweeping the c9intry. He said:
If the various states continue ar
bitrarily to reduce rates as some OF
them are Going" he declared, land if
the various labor organizations con tin
ue to press their demands for increas-
ed wages and shorter hours. the next
unprecedented crop harvested in this
country will be a record-breaking crop
of receiverships. / wish 10 say, ana
with all possible emphasis, that in my
judgment the time has come to be fair
to both sides of this controversy. In
other words, the time has come for
what the president calls a Square DEAL
but we want it all around.
There is no doubt that in the build
ing up of these properties things have
been done which, though legally right,
were morally wrong, but because they
were legally right and cannot be legal
Iy disturbed, what is the use of ex-
plotting them when no result can be
secured except to furnish material for
the charlatsn and the demagogue and
to intensity class bitterness?
III any government, whether ma
tIona1, state, or municipal, permits any
injustice to be done to corporations,
simply because they are corporations
whether this injustice is the result cf
proper or IMPROPER motives; the real
sufferer in the last analysis is the
small investor
Let US compromise on the best avail
able and most practicable Let the
railroad managers lay aside all sub
terfuge and come out in the open. Let
there be a maximum of publicity and
q minimum of legislation. Let eminent
hnanciers and captains of industry CO.
operate with the president TO bring
about better corporate practice
Let them lay their cards on the ia
bic and say to the president: We will
uphold your hand not only in enforc-
ing existing laws, but in asking such
others as are necessary to prevent
wrong doing. But you in return must
protect p us from the irresponsible agi-
tator whoever he may be- Let us con-
vince the public that we will give it
the best facilities American ingenuity
can car devise, and in my judgment the
-Aszto labor. Treat it fairly, and it
will meet you half way. No sane cfti- |
zen or employe desires hard times, and
II they realize what our latest statts-il
tics absolutely prove, that the margin
between prosperity and bankruptcy is
no broader than a 10 per cent increase
in the cost of transportation, and a 10
per cent decrease in the revenue reeeiv- |
ed, they will join the conservative forces |
OF the country in seeing that no steps |
crisis
In leading up to these utterances Mr.. |
ShontS said:
Railroads have made possible our /
continental expansion and our indus
trial growth. Had it not been for rail-
roads our population now would only
fringe our navigable streams and our |
commerce would be limited to such
traffic as could be carried proftably on
a fGaTx Dbl
have been built without MONEY nor
could they be maintained without re-
rates Had the present
proposal to limit profits to per cent
On the capital invested held sway dur
ng the early days of railroad construc-
ion, but few miles of railroads would
nave been built.
The pioneer railroad builder. who
aced bankruptcy and who Iisuaiiv
ound 1t, was to larger extent en-
1tled to the increment resulting from
ne successful venture than the pioneer
armer who preempted government land
It so cents an acre and saw it rise in
Talue to $3.50 an acre because of the
of the railroads.
Conditions have changed Whereas
he struggle a few years ago was TO
ecure traffic to fill the railroads.
ABILITIES existing, the struggle TO-DAY is
o provide facilities to eproperIyr han
ne the traff1c offered. But does this
mango in conditions justify a COM
.Iete change in financial methods?
Tow that the growth of traffic has at
asst overtaken and passed the ca
ac1ty of the railroads to handle it,
nd has brought the earning power If
he railroads up to fairly remunera-
I've point on the securities outstand-
ng, is it just to say that the stock
Iolders who have stood firm through r
many years of storm and stress and
ought the long battle through to vic
DRY stand on equal footing with the
mere outsider?
Does public policy now require that !
heSe stockholders shall frelinul1iSh all | l
laims to preferential privileges and Z
How the public to bid for newlissues !
I securities on an even basis with |
themselves?
There are two sides to- this ones /
ion. It is no doubt true that some I
Inequalities and hardships- have grown '
ut OF allowing stockholders to sub l
cribe exclusively for new issues of Sc G
urities, but may it not also follow +
hat with the extra profit thus re- !
eived, taken away from them there I
nay be difficulty in raising funds to X
rovide money for the improvements v
ow demanded? S
1.-The question of whether outstand- a
lg securities are watered or not. de- a
ends largely on the point of view. S
by watered stock we mean that the p
securities do not repre-
emit cash paid in at their par value. ly
hen the securities of practically every e
are to a greater or less v
xtent watered- But If you look at s
lie situation from the point Of view b
lat none of the leading railway sys-
ems of the country can be duplicated n
Or the amount of money which their D
represent, then to a large e
1tent there is no water in outstanding a
ock. h
I'm view of the enormous risks
h1eh always come with the con- Il
ruction and operation of railroads $,
roperties, and of the vast sums re- F
keen Fa0 |
IT promptly handling the constantly if
rowing traffic, I personally doubt the II