The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1907-01-21
WHY THOSE BONDS
General Manager Hurley Meets
Railroad Board.
Enlightens the Legislature on
Question OF Finance.
THEY NEED THE MONEY
Why Capital Stock and Bonds
Are to Be Increased.
Make Needed Improvements Of
the Company Property.

| appointment General Manager J. E.
| Hurley of the Santa Fe, and received
from him a formal statement of the
| Santa Fe railway in relation to the
proposed increase in the capital stock
and bonded debt of that road.
| This meeting was arranged by the
| state board of railroad commissioners
| at the command of the Kansas house of
representatives in the following resolu-
| ton:
Whereas, A meeting of the stock
holders of the Santa Fe railroad has
been called to meet in Topeka on Jam
| uary' 80, 1907, to vote on a proposal to
increase the capital stock of that COM
pany $98, 900 600 and also to vote upon
proposal to increase the bonded debt of
the company $sS, ,0000, 900; therefore, be 1t
Resolved, That the board of railroad
commissioners be requested to furnish
the house of representatives with such
information as they may have or can
procure explaining fully the object of
this increased capitalization and in
creased indebtedness, and this report be
made not later than Monday, January
21, that this legislature may take such
further action as it may deem wise and
necessary"
The report of the board of railroad
commissioners to tn house will be made
at o'clock this afternoon. when the
reply of the railroad company will be
purely a formal one, reciting that the
$500. 100000 additional money is to be
used for making necessary improve
ments in the company's property
The board of railroad commissioners
is not very well pleased with the job
which the legislature handed to them.
and have made no special effort to OBJ
tain any inside information. They will
simply take General Manager Hurley's
word for it. and let it go at that.
The resolution calling for the infor-
nation was passed last Thursday, and
was introduced by C. L. Davidson of
-Sedgwick county. The commissioners
have had only about two or three days
in whichssto get information, and they
do not consider that they are supposed
| to be. in a position TO hand out inside
tips on such subjects.
What Is the Real Cause?
Of course nearly everybody believes
that there is some reason for the big
proposed increase in Santa Fe stock
back of the reasons which may be pub
licly assigned The big railroad corpor-
ations are not in the habit of telling the
public just what they propose to do
with the money they get from sales OF
bonds and stock.
The real reason for the Davidson
resolution is no doubt. the suspicion on
the part of many that the new stock
and bonds are merely water which is
being poured into the Santa Fe for tine
purpose of cutting down on the per cent
of earnings, which have been showing
up too we'll.
There are some who believe that Pres
ident Roosevelt's message to congress,
in which he urged the enactment of
law to prevent over capitalization is
directly responsible not only for the
Santa F'e increase, but for the increase
proposed in the stock of the Great
Northern of $50 900, 900; the Northern
Do IA mi
900, 900, and the Pennsylvania, $500. .00O,-
900. 1t looks as though there might be
something in this suspicion.
The New York Commercial, one of
the leading financial newspapers of the
country,says concerning these increases
in capital:
"A reason has been advanced as an
explanation why stockholders in rail-
road companies have been asked to au-
thorize mysterious increases in capital,
some of the latter mounting up into the
scores of millions.
There is a movement in the west
and it has been gathering force for
some time past, to compel railroads to
go before state commissioners and
give detailed information concerning
all proposed Increases in capital. If
such laws were passed by the various
state legislatures it would add to the
difficulties already experienced in
building into the territory of a rival
petitive line.
"The announcement. made not long
ago, that the shareholders of the Chi
cago & Northwestern had authorized
an increase of 800. 600, 600 in the cap
ital stock of the company. without be-
ing told why. such large addition to
the securities already out was neces-
sary, reveals similar action taken by
other railway corporations.
1.-The shareholders of the New York
central it will be recalled, were asked
to authorize the issue of $10O,00O,Ooo
of new stock "to be issued from time
to time at the discretion of the di-
rectors.'' Neither the shareholders of
the Union Pacific nor those of the ST.
Paul were informed al to the reasons
for the increases to capital stock of
S1O0,OO0,000 to $3.50, 100000, respec-
lively, or to what use the extra money
was to be put.
'.Of course. it is among the possibi-
ntfes that the Northwestern may de-
sire to initiate the st. Paul and build
a line to the Pacific Ocean; also that
the Union Pacific may have some de-
signs on the Atchison or some of the
other roads which have business 1t
would like to get.
d. w. Blaine of Pratt county. and
o. L. Lennen of Ness county, the two
independent members of the Kan
sas house of representatives. expect to
be the media through which the
rumored legislative alliance of the
"Souare DeaT, Democrats in the house
will be accomplished.
The Square Deaf Republicans fear
that they do not have enough votes in
the house to put through the antipass
law, the 2-cent fare law, the primary