The Birmingham age-herald., 1907-07-14

 guaranteed, without purchase connec- ton with the Central Pacific upon terms as favorable as might be given to any other connection.
 In the construction of these roads the people had in view the protection of the frontier in time of war; the settlement or a great wilderness west of the Missouri river, and the development of its re- sources
 In no other portion of the country Is the federal government expending such large sums for the purpose of development as in this great western region tributary to the Union Pacific and the Southern Pacific, and in no other part of the United States is the commerce of the country dependent upon so few railways covering so vast a territory and controlled by so few men, and in no part of the United States could such control have such far reaching effect The body Of trans-continental and foreign commerce through Pacific ports has grown to enor- nous proportions, and its encouragement and development is of vital interest to the American people
 It Is claimed by the Union Pacific that the principal reason for acquiring the Southern Pacific was to obtain the Central Pacific connection from Ogden to San Francisco. It is undoubtedly true that this is a desirable connection for that company but, as we have seen, whether purchased or not, the Central Pacific Is required to form a through line of trans portaton with the Union Pacific and not to discriminate against it in the receipt and transportation of freight and through traffic The public Is entitled to all the advantages of this line, as a competitive line of transportation with other trans continental railroads.
 The various lines which now compose nK-1rp prag to California wer also built under the patronage of the federal government by the donation of many millions of acres of government land and formed an inn
 portant and separate route.
 While Congress did not prohibit in ex- press terms, the union of the great fed eral railroad systems, it Is hardly to be believed that such prohibition would not have been imposed had 1t been thought that in the course of time they would have ben brought under a single control.
 The report then details the steps taken to secure control of each of the roads be- fore mentioned, and concludes with the famous Alton deal Part of the report follows:
 It developed during the inquiry that the Union Pacific railroad in the year 1903 became the owner of 1O3. 431 shares of the preferred stock of the Chicago and Alton Railroad company and the commission
 therefore deemed it important to inquire into the reorganization and capitalization of this company.
 Prior to 1898 the Alton road had been for many years under the control of MT.
 T. B. Blackstone. president, and had paid an average dividend exceeding per cent per annum, and In addition had ex- pended large sums out of earnings In
 the improvement of its property. | As appeared by its books on December | 31, 1907, the cost of its road and equip
 ment was s34, ,153,927
 l It had other assets amounting to $5, | 7S1, ,960.
 Making the total value of It's property | $39, ,SS7.
 It's total stock outstanding was s22, ,2SO,- | 500.
 It's total funded debt. s1o779,s5 It's other liabilities were $940 957. | Total, $33, ,951, ,407.
 | About this time MT. Edward H. Harri-
 man. MT. Mortimer L. Schiff. MT. George | J. Gould and James Stillman formed a 1 syndicate to buy this stock and bought
 ir for $20o a share for the preferred,
 and $175 a share for the common, mak- | ing a total cost of the shares purchased | SS9, ,042, 200.
 n about seven years to June 30, 1906, l the outstanding capital indebtedness of | this company was expanded from $33, ,951,- 1 40l to $11+610,937 or an increase of about | $S0660,000 and there was expended in
 actual Improvements and additions to | the property out of this capitalization
 only about $1S,o00OO0, leaving an increase l of its stock and liabilities without one | doAar of consideration of about S62, 660,- l OoVsor s66.19O per mile of the road owned | June 80 1906.
 | By way of Justification or excuse, we l are told that the methods of the finan- | cling of railroads which prevailed in the l year 1900, are now obsolete, owing to q | higher degree of conscientiousness among | tlnanciers and, moreover. that the Chica-
 go and Alton should not be regarded as | an isolated instance inasmuch as 1t was
 dealt with much as many other roads | were at that period.
 | The first of these statements Is, we | trustf true; the latter statement Is not | calculs ted to uphold the value of Amer | ican railroad securities. The commonu stock of the Chicago and | Alton road has since evidently been sold | on the market, for 1t appears by the l testimony of w. H. Moore and D. G.
 Reid that the Rock Island owns the 19l,- 1 500 shares of common and preferred, most | ly common. As before stated in 1904, the | Union Pacific Railroad company pur- | chased 103,431 shares of the preferred