The Washington herald., 1907-12-30

hour with the railroads. for when the
statute says that they shall not be "di-
rectly or indirectly interested il makes
the law 50 sweeping that 10 do b. indi-
rectiOn what cannot be done by direction
becomes about as dangerous as the open
and-sbOve-board policy.
When II Is remembered that every car
may carry a dozen shipments in half as
many months, and that each shipment
exposes the railroad 10 a five thousand
dollar fine, IL viii be seen that such fnes
would bankrupt the road which would
dare haul much coal in contravention OF
the law. And yet, the depression Of the
money market that has swept over the
country makes il practically impossible
for the railroads 20 get rid Of their hold
ings in the four months that remain
Their representatives asked Congress last
year to put the operation OF this pro
vision Of until May I. 1875. so that rail-
roads could close out the holdings. direct
and indirect. But with few notable
exceptions they have allowed TWO sum
mers 20 pass without raising a hand IN
that direction.
Il IS true that the railroads have COM
paratively small direct holdings Of coal
properties. An investigation Ct the East
ern bituminous situation b. the Inter
state Commerce Commission no. long ago
showed that only a very small per cent
% coal stock is held by the railroads
themselves. II is ali carried by the COM
munity OF interest plan, and while 70
every intent and purpose except for the
scrutiny OF the law they are one. there
is perhaps little chance 10 prove il. One
OF the most striking instances of this is
the case Of the Reading Railroad The
average welI-informed man would tell
YOU that the Reading IS one OF the lead
ing anthracite operators in the country.
And Yet, according 10 its views. II has
no interest IN anthracite operations az
all. There is a Reading Railroad Com
pany and q Reading Coal Company An
other company. a holding corporation
known as the Reading Company, controls
both through stock ownership When
The law gets after the railroad for min
ing coal il says al once that IL has no
interest in the coal company. and when
II gets after the holding corporation f0r
sending its coal over its railroad. that
company replies that the mere fact that
Z
not make II q common carrier. In other
words, the holding corporation sets up
the claim that controlling the stocks %
a railroad Is not controlling the railroad.
This proposition has not been passed
upon fully by the Supreme Court. but il
that tribunal should SO hold. IL would be
! a very easy matter 70 get around the
law. AL that would have 70 be done
would be 70 organize a holding company.
which would keep the stocks Of the coal
company and the railroad company TO-
gether. yet separate. and the difficulty
would be overcome.
The railroads believe this 20 be a per
fectly legal arrangement. and IL is not
improbable that the Reading plan VIII be
generally copied But at the same time
they VIII think We'll and Try every other
expedient before doing so. There never
was q time when the railroads were 50
afraid Nof public sentiment as they are
to-day, and the Leading lawyers are
counseling that every other expedient be
carefully considered before this one is
invoked. They point out that while such
an arrangement might hold good in Law.
il would not satisfy the people. and that
the railroads cannot afford 10 ignore the
views Of the people any longer.
One of the other expedients that has
been proposed is the organization OF a
holding corporation 10 take over the
stocks Of all the coal companies in which
the railroads have q direct or indirect
interest Those making the proposition
assert that il viii require a corporation
with capitalization Of a billion dollars
10 take them over. Yet by consulting
the recent data collected by the Census
/ Bureau II is found that the stocks and
bonds issued by all coal companies in
! the United States amount 20 less than
$500 o.C3.oCo- Thus i is apparent that a
holding company capitalized az a billion
dollars 10 take over those mines in which
the railroads have an interest. would
I have a vast deal Of water in IL. or else
the railroads must own practically all
/ the coal lands in the country.
That they do own a very heavy per
| centage Of the anthracite lands IS quite
generally known. Five years ago they
owned more than % per cent OF the
anthracite land. and Wall street now
/ figures that they own directly or indi-
/ recJly 81 per cent of these lands They
are valued at hundreds Of millions OF dol
l
tiOn would meet the demands for anthra-
cite coal in this country for some eighty
years Probably one-haif Of the anthra-
cite deposits of the country are on the
line OF the Reading Railroad
The average individual does not realIze
into what a comparatively few hands the
principal coal interests IF the country ar.
concentrated. One may select twenty
eight companies which control 20 per
cent of the entire coal production Of the
United States. Thirteen companies in
Pennsylvania have an aggregate annual
output OF 100000 tons. This is nearly
. per cent Of the annual output Of all
American mines. And the bulk of these
stocks are held by the same people who
own the stocks Of the railroads in whose
territory they are situated.
The railroads probably. will appeal 10
Jove TO, save them from their predIca-
ment. They are in that position where
the harvest is past. the summer * end
ed, and they are not saved from the no.
cessity for doing something. So they will
ask Congress for a stay of proceedings
! in the assessment Of fines until they can
ascertain what the Supreme Court saws
about the matter. They believe the law
IS unconstitutional, and Yet the fines are
so heavy that they are not willing to
risk going ahead until the matter is set
tied They point out that il is impossible
for them 10 sell their coal lands at once.
that many Of these lands are a basis for
securities which are held in every corner
of the financial world. and that without
the consent Of these bOndhOlders there is
no legal way for them 10 get rid Of their
coal properties. They realize that shis