The Washington times., 1907-03-20
UnSOund Meth DDS
Given as Cause for
Calamity.
Believes Roads Over
capitalized and Wall
Street Too Radical.
By VICTOR A. WATSON.

NEW YORK. March 2o.-For twenty
four hours. from Augusta, Ca, 10 Phil
adelphia, / rode with John D. Rookie
feller- During that time 1 learned:
That he is strongly opposed 20 the
overcaQitalization Of railroads and
other corporations:
That he believes i'm the conservative
English corporation methods as against
Wall Streets high finance:
That he believes the railroads have
reached a point where they cannot bor-
row any more money in this country
10 carry ON their improvements. and
that he feels certain the country is
Fastening 10 the shoals Of hard times
because Of unsound financial methods.
Further. he believes many of the
stocks on the market are uusound. or
they would not be allowed 10 20 or the
market by the men who control them.
Rockefeller slept for nine ont of the
twenty-four hours. but during the rest
or the time he talked almost constant
ly. discussing railroads. finance. religion
men, newspapers, politics. and charity.
RaPs the Spectators.
He summed up in short. succinc,
thoughts the financial troubles that are
creating feeling Of unrest throughout
The United States
Regarding tie stocks which seem so
alurinS TO the public. 1 have but a
single observation 10 make" he said
II a man goes into the Street and
inds a certain stock that is declinirr,
constantly, although iJ is paylUg Il d
Per cent dividend. u seems strange thatI
ne uoeSn stop 10 consider that If tba
stock is such . good comm06ftv H.
men back Of II. with plenty of ronrv
at thelr command, do not keep il in
their control.
rs il reasonable TO surposc that If
IN good, legitimate way the stock is
actually earning Der cent and y-III
continue 10 do SO, that it would be al
trolling interests
DO you think the railroads and 6+ber
Dig corporations are at their proper CAPT
taliZatiOn:' 1 asked.
Roads 0vercapitalized.
'No. they are vastly ova-caritaIizad
That is not "a healthy situation Tho
American railroads need 5000 900 to
carry on some of their improvements
They couldn't get II last summer in this
country. and they had TO let their notes
20 abroad at about 8 per cent. That
interest must be paid, no matter what
happens 10 the dividends" "
DO you believe IT Is a sound financial
proportion Jc Over-CapItaliZe2
Il most GsSureCly do not. [ presume
j should not criticize interests I'm this re-
spect for some OF these who have II
are friends OF mine. 1 may probably ~.
called an ola foSy for not agreeing
with these new financial methods"
presume there is q great deal
OF temptation 10 make money quickly
but personally, even if l wanted TO work
a big stock JCbbing scheme, / don't think
] would over capitalize. The penalty j.
too great
Il think that properties should be can
italized at only their legitimate value.
and If that were done there would be
such feeling Of security in them
among the general public that We would
ma men with little money holding
highly profitable stocks instead of al
lowing II 10 remain at small interest In
savings banks.
Cannot Suggest Remedy.
'T am, unfortunately, unable to sug-
Gest a remedy. For future corporations.
however, I would suggest the conserva-
tive plan II the property increases in
value let IL Increase. and # the volume
OF business IS great, let the original
subscrlDers get the large dividends. |
Then, If money is needed for the inn
proNemcnt of the plant the stOckhOld-
ers will be only too glad TO advance il |
rather than allow too mary outsiders
10 get In on a highly profitable invest |
4AAtllA
Would you suggest that the railroads
and other corporations reduce their
present capitalization? p"
NO, most decidedly no. 1t would in I
my judgment. be next 10 an imDossi- |
biiity to reduce capitalize ton
DO you think the roads are handled
I do think that roads are in a very |
situation. Labor has some
thing TO do with this. It costs q great /
deal more money now 10 employ labor \
than IL used to"
You do not mean that the increased /
cost OF labor is altogether respOnsibIe?' % /
No. but that is an importaut factor.
On the one hard, we have labor going 1;
up, which necessitates greater exrendi- !
lures. and on the other hand ar. State
legislatures cutting down the incomes /
of the roads
Alabama Flooring, Mostly Edge Grain,
reduced to $3.50 per 100 feet. F. Libbev
Co, 9Th st. and New York ave