The Roswell daily record. [volume] (Roswell, N.M.) 1903-current, 1907-05-29
WALL STREET "VlEWS
ADDRESS WITH ALARM

ADDRESS WITH ALARM"
New York, May 29.-Rumors that
President Roosevelt's address at In
annapolis tomorrw will deal, not with
patriotic themes, but with railroad
and corporation matters, has caused
.reat alarm among the financiers OF
Wall Street, who profess to fear that
any attack on the oVer-capitaliZatiOn
80 common among railway companies
would lead to a disastrous panic. Ma
ny prominent financiers have made
hurried trips to Washington recently
Tor the purpose, it is believed, of at
tempting to dissuade the president
from making an a1ti-corporation ad-
iress.
Rate regulation and similar restric-
tionS the railroad magnateS can bear
With comparative equanimity, but any
threat at an investigation of the sub
;ect of over-capitaliZatiol is a red flag
o the bulls and bears of wall street.
1t is the one supreme matter in the
conduct of railway systems that Wall
street does not want investigated. Ma
ny prominent railway officials candid
" admit that a comparison of the ac-
Lual values with the capital stock aid
funded debts of most, if not all, rail
roads would promptly result in a
slump in the value of securities and
a consequent panic.
Recent investigations have conclu-
sively shown that all railroad stock
are largely watered, some companies
being capitalized at as high as eight
or ten times the actual values of their
properties. These facts the magnates
Of Wall street are overly anxious to
hide from the investing and gullible
public, which in the past has purchas
I'd many millions of dollars worth OF
wild cat railroad securities almost
worthless as fake mining stocks.
f President Roosevelt should advo-
cate the appointment of a federal com
mission to probe railroad values, as
is rumored that he will, the result
will almost certainly be disastrous to
he financial interests involved in the
watered stock deals.
While nearly all important roads
are over capitalized, this sort of Fl
nancial legerdemain has been most
southern states, wnere the process of
injecting water into inflated securities
has been carried on to a remarkable
extent Experts estimate that many
of the leading Mississippi Valley and
trans-contine1tal systems are capital
ized at not less than ten times their
cash worth-in other words, that for
every million dollars of actual invest
ment there is $4,000 900 water.
This fixing of the actual value of
railroads is highly important in the
work of rate regulation undertaken by
the interstate commerce commission
which at the present time is circum-
scribed in its value to the public by
the necessity of figuring interest a1d
dividends on value largely ficticious.
With the capital stock of the roads
of the country corresponding to their
actual value in cash, it is estimated
that freight and passenger tariffs
might il many instances be cut in two
and still allow a reasonable profit on
the investment to the owners.
Whether the president will dare to
risk the anger of Wall Street by de-
manding an inquiry into over-capftal-
ization is a matter of eager discus
sion in financial circles. IF he does,
it is almost certain that captains of
industry a7d finance will Immediately
begin another panic. in the hope of
turning public sentiment against the
president as rude disturber of the
nations prosperity.