Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1908-05-07
Tho Merger Bill.

'RallWayS demand always, IL is tlic
fundamental idea of their existence
that they must have sum that VIII
pay the cost of operation. the cost OF
maintenance, and dividends and inter
est upon their stocks and bonds. With
the exception of one or two states,
and now fortunately Iowa is one of the
number there is not state In the
union that fixes the limit or restricts
the issuance of capitalization. Our
system of railways, 100000 miles In
the aggregate, is capitalized at Sl6,-
600 900 900 II the railways are worth
$4,000 100000 you and | ought willing
ly to pay compensation for the serv-
ices that would return to them inter-
est upon $4,000, 100000.
Vast and magnificent as our rail-
way system is. it neither costs nor is 1t
worth more than 00,000.0O0.
And six or seven billions of this
capitalization is pure, unadulterated
water do not mean that, l mean
impure and adulterated water.
Nov / am not here for the pur-
pose of destroying the basis of our
markets. 1t is too true that a mistake
once made may never be undone. Much
OF this capitalization has passed into
innocent hands, and we ought to bear
the burden of our Indifference to the
public veal forever, If need be, rather
than invade by one hairs breadth the
safeguard of the constitution and the
protection Of the law. But l mention
for the purpose of indicating to you
how important it is to have a tribun-
al that fix q railway rafp Take
one or two instances in our own state.
when Mr. Hill bought the Chicago
Burlington & Quincy railway, or when
the Northern Pacific and Great Nor
thern bought this property, it doubled
the securities without adding a spike
to the property, as l said before, or a
single dollar to its treasury. Its stock
was then above par, altho 1t did not
represent an actual payment into the
treasury Of the company. They doubled
the capitalization and reduced the In
terest. Why didn't they reduce the in
terest upon the original capitalization?
You will be expected some time to
make that capitalization just as valu-
able as the FORMER was.
THE Chicago, Rock Island & Pa
cific Railway company, after 1t had
completed it's great consolidation had
$75,O00,O0O, common stock. This only
happened five years ago. I never was
so Inundated as citizen of the COM
monwealth in my life as was when |
found that under the laws Of this state
must stand by and see the crime
against honest business perpetrated by
these reckless promoters; $T5O00,OOO OF
common capital stock originally ex-
listed, the country had grown, the bus
mess had multiplied until the stock
was at the time to which I refer worth
70 cents on the dollar And then two
eminent men, one lawyer of genius,
the other a manager without con-
science, sat down and without the
payment OF dollar except to the Of
ficers in the states in which fictitious
ard sham corporations were organized
without the payment of penny for
the increase, they converted the $751;
coo, 900 of common stock into $402,-
500, 900 of stocks and bonds. And now
they expect their business to support
and pay interest and dividends upon
large part Of this capitalization.
81 nave heard 1t rumored that there
was DANGER LuttL Lue SlllCdSO. NUN 10
land & Pacific railroad would pass In
to the hands Of a receiver and if it
does, which God forbid, there will be
people who will say that Roosevelt did
it or that Cummins did 1t. 1t will be
good while before that road will be
able to earn dividends and interest up
on all these millions, but there will
come q time when it will be, and then
instead Of decreasing transportation
charges as they ought to be decreased,
the capital stock will again be doubled
or trebled or quadrupled.
"But venture that it will not take
place in the state of Iowa, for the leg
islature of last winter passed law
which forever makes it impossible for
any company of men to SO transgress
the fundamental laws of Iowa and all
new capital stock that is issued must
be paid for at par, and if paid for in
property the value of the property must
be fixed by an independent tribunal,
the executive council of the state OF
Iowa. 1t is because of this ceaseless
over Republication that it became nee
essary, as it was apparent to every
thinking man that we should have
some tribunal that can fix railway
rates. and one charged with the duty
of fixing them not upon the basis Of
the actual value Of the property of the