Willmar tribune., 1908-04-29
RAILROADS ARE BUILT WITH
BONDS.

0ONUSe
New York, April A.-When
Thomas F. Ryan was before the
special grand jury investigating the
affairs of the Metropolitan Street
Railway company he said that 95
per cent of the stock of old rail
road corporations in this country
never cost dollar.
There was great surprise and
many of the jurors questioned Mr..
Ryan, believing that they had mis-
understood, but the only one in the
room who manifested no surprise
was MIR. Jerome. who, before Mr..
Ryan appeared before the jury, had
carefully gone over all the testi-
mony with him.
Ryan's remark was made after
Mr.. Jerome had read to the grand
jury the statement prepared by the
witness. which Mr.. Ryan gave out
for publication last Monday even
ing.
Ryan had figured out that the
$52, 100000 Of the Metropolitan
street railway stock represented
cash payments of 834 per cent Of its
par value.
As Mr.. Jerome read this state.
ment, Ryan interrupted. saying:
Gentlemen, that is the answer
to the statement that has been made
for the last five years that the Met.
ropolitan Street Railway company
stock is all water.''
Mr.. Jerome promptly came tc
the witness rescue, saying:
''Mr. Ryan, you have been con.
nected with large number of cor.
porate ventures, both in the street
railways and in steam railways,
have you not?"
eyes, sir,'' answered Ryan,.
'And as a banker you have beer
familiar with the capitalization o1
many of the railroads of this coun.
try, have you not?"
eyes, SIR
How will that compare-that per.
centage of water, if you call il
such?"
"Ninety-five per cent of the stock
of railroad corporations of this
country never cost a dollar" was
Mr.. Ryan's declaration.
"You mean," said Mr.. Jerome,
"that IS per cent Of the stock OF
the railroads of this country is all
water?"
Yes"
please explain" said Mr.. Je'
rome.
"Well," said Mr.. Ryan, "the
railroads in the last of these great
speculative years that we have hac
have put up stock so that it wa.
easy to raise money on stocks ant
bonds, but up to 1885, IS per cen
Of all steam railroads and all stree
railroads, and all industrial corpor
ations Of this country never put il
one dollar on their stock except :
little organization expenses thai
were required for few shares o1
stock in the beginning
$50 then,'' said Mr.. Jerome
"your experiences in these matters
is that $3.50 cash paid in fo1
every 500 in stock is exceptional?'
eyes, sir. Up to 1873 there wa!
not dollar paid in on St. Paul
Northwestern, Omaha or any o
these railroads."
Mr.. Jerome asked Mr.. Ryan fo1
a further explanation, but the wit
ness waited until the district at
torney put another question.
IF you took these roads as the,
stand today, including the road:
that have been organized and sup
posed to be put on a sound basis
taking them as a whole, both il
steam railroading and surface rail
roading, would $3.50 in cash fol
every share of $100 par be large
percentage of CASH."
"A large percentage" replied
Mr.. Ryan. "Ninety per cent o1
them haven't had anything. MOI
only that, in the reorganization
that took place from 1900 to 1907
they assessed these stocks and gave
bonds" sasih
"Mr. Ryan," said one of the
grand jurors, I'VE understand ther
that the roads only cost about five
per cent of the capital issue? They
were built with bonds?''
Built with bonds," said Mr.. Ry'
an. The Union Pacific railroad is
built with bonds and got lano
grant worth $4,000, ,0O0."
And Atchison the same?' asked
another grand juror.
"Atchison the same.''