Evening star. [volume] (Washington, D.C.) 1854-1972, 1907-05-19

The most interesting feature of the Union
Pacific underwriting Is that the underwent
ing syndicate makes very frank state
ment of the details of its contract with the
railroad company. The letter sent out by
Kuhn, Loeb & Co. inviting bankers to join
in the $75, 600 syndicate states that an
arrangement has been made with the rail-
road company whereby the syndicate Will
receive commission of 2 per cent of the
par value of the bonds, and the managers
will receive a bankers commission of an
other " per cent. And SO it is seen that
this railroad agitation has accomplished
some good along this line. In the old days,
when the ''public-be-damned' policy was
more popular with the railroad managers
and bankers, it was considered very imper-
tinent to ask an underwriting syndicate
what 1t was making out of an issue of Sc
curities. This Is purely a private trans
action between the syndicate and the ran
road was the usual answer, anu we do
not see that it is of any interest to the
public to know what price we paying
for the securities 1t has taken long
time to prove that 1t is a matter of public
interest for the stockholders of a property
to know what payments are made by their
company to bankers and underwriting syn
dlcateS for services performed. The chief
complaint that has been made concerning
undertakings has not been the size of the
commissions paid, but the secrecy auout
these commissions. A banker is worthy Of
his hire, and there is no reason why any
SSSict SIlOulu DC HldOe OF tno exact UetdllS
of the payment for the bankers services.
~
Any Union Pacific stockholders who have
any fault to find because of the juicy COM
missions taken. out of the property by
Kuhn, Loeb 4 Co. now have a chance to
deprive this banking house of what the
reformers have seen tit to call graft. The
stockholders have the privilege of taking
the whole issue of the new bonds. Any
bonds that the stockholders don't take
will be taken by an underwriting syndicate,
headed by Kuhn, Loeb & Co., that will
make the usual underwriting "rake-off.
Now here's a chance for the stockholders
to shut the bankers out.
The spectacle of an ordinary stakeholder
getting up in a railroad annual meeting
and questioning the wisdom of acts of the
directors is unusual enough in this coun
try to arouse comment. 1t is not consider
ed coed form for railroad stockholders to
attend annual meetings. If they do attend,
it Is considered very bad form to make any
disturbance. Annual meetings only
held because the law requires them. They
would be dispensed with if it were not for
the legal requirement. Judge Cowing so far
forgot himself as to attend the annual
meeting of the Delaware and Hudson and
to make some remarks not exactly lauda-
tory OF the board of directors.
Over on the other side of the water rail-
way shareholders have the inalienable right
to attend meetings and speak their piece.
An English company meeting really
amounts to something. If the directors
have been running things with high hand
they know what they are going to get at
the annual meeting. The result of this is
that. the directors of public companies in
England are more careful in their conduct.
1t may be that further good result of
the anti-railroad agitation will be the ex-
tension of the publicity idea to company
meetings
Another one of the big New York dailies
is going to censor it's financial advertising.
This is one of the newspapers that stands
very nea- the top of the list of the Ameri-
can publications receiving an immense year
ly revenue from financial advertising. Here
tofore this newspaper, following the gen.
eral practice among the leading newspapers
of the country, has accepted all financial
advertising offered to 1t SO long as it was
sure of getting paid for it's space And, as
a result, II has occasionally accepted adj
vertising that 1t knew was not honest and
1t has very often accepted advertising that
1t knew was going to cause certain losses
to the readers of the paper who invested
their money on the strength of the adver-
Using The policy of this newspaper here
after will be to refuse absolutely all finan-
cial advertising that is offered to 1t by
get-rich-quick artists of known bad records
The magazines, too. are waking up to the
necessity of censoring financial advertising
One of the popular monthly magazines that
reaches a million readers recently decided
to reject any financial advertisement that
would not stand the most rigid test. The
first result of this policy in this particular
magazine was to cut out page advertiser
who has been spending in the neighborhood
of $40, 900 year with this publication. This
magazine refused last year $75 600 worth OF
advertising, other than financial, that It
considered Objectionable