The mirror. (Stillwater, Minn.) 1894-1925, 1907-07-18
Che
Che
Transportation
Droblet11.

these companies is so great, even after
all fixed charges have been met, that
the directors have not dared to return
all the net profits to the stockholders
in the form of dividends, because the
rate would be so great as to cause an
outburst of indignation on the part of
the shippers that could not be con-
trolled, hence the stock has been
"watered" to meet the emergency. By
the term "watered" 1 mean that the
capital has been increased without in
any way increasing the cash resources
of the corporation. If for example it
were found that the yearly net profits
on road capitalized for one hundred
millions of dollars were twenty-one
per cent, the directors could quietly in
crease the capital to three hundred
millions, which would earn dividend
of seven per cent, and then call in the
old stock and issue three shares of the
new stock for one OF the original issue
returned.
This has been done in multitude of
cases and the stockholders pocketed
the entire profit, in this case amount
ing to twenty-one per cent on their
cash investment, while the dear people
.were led to believe that they were re-
ceiving but seven per cent which is
not considered to be an exorbitant
profit.
The owners of railroad stock and
bonds are entitled to a reasonable in
come from their Investments; labor is
entitled to and must receive fair and
living wage adjusted to meet the ex-
igencles of an increased cost of living;
a reasonable sinking fund must be
maintained to provide for repairs on
rolling stock and roadbed and to take
care of all extensions of trackage, etc.
but every cent above these necessary
fixed charges should be returned in the
: form of dividends, snd these dividends
ought not to exceed seven per cent
, When they do, the tariff should be
, lowered, and it is the prerogative OF
; the government, either state or nation
al, care not which, to see that this il
done.
, Speaking for myself do not believe
, in government ownership of public
utilities, particularly railroads, but
T do believe, emphatically, in fair
honest, vigorous governmental con
) troll of railroad systems; in this ont
: way alone 1 believe lies the solution
of the vexing questions which nov
> confront the business world. Ol
! course this means the death-knell o.
any future great combines, because
Q none of tho peoples money will re
f main in the railroad treasures for un
r principled men to employ in wreckinl
f and buying up competing lines or line
s entering territory coveted by tn
: wreckers; hence the fierce opposition
b of this plan.
al II is fact patent to all who rea'
= that railroad officials are combining
= to force up freight rates and to fight ii
= the federal courts much of the curren
legislation, in a number of states re
= ducing passenger rates. Only recentl
= the president of one of our great easter
trunk lines gave out signed state
. ment justifying the proposed advanc
in rates because of the increased cos
d of railroad construction materials an
}. operating expenses. On the othe
e-1 hand, the shippers who are organizin
o to fight the carriers show conclusiveI
o that the increased facilities for MANI
D. featuring railroad equipment mor
( than offset the advance in cost of ra'
20 material. Since / began thinking OF
1.-THE outlines for this paper have ha
asd the good fortune to chance upon
lt1 synopsis of the preliminary report Q
u railway incomes issued by the Int
ct state Commerce Commission which {
"a completely bears out this contentio
le of the shippers that cannot forbes
Is quoting from it, altho realize that, [
at q rule, figures are dry and dresry lite
re ature for most men.
Of This report shows that the operatir