The times dispatch. [volume] (Richmond, Va.) 1903-1914, 1908-01-14
TUESDAY. JANUARY II, 1905.
No ambition II ever fully realized
here below mt least. No pnratttsc
becomes terrestrial in our day
Victor Hugo.

Victor Hugo.
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THE STATES "wATERED STOCK"
The statement of the Board of Sink
ing Fund Commissioners with regard
to yirsinia's interest in the F., f. q l.,
Railroad. published in The Times-Dls-
patch OF Sunday. must have come as
rude shock to the people. Inc com
missioners, who are Auditor Maryc,
Second Auditor Dew and Treasurer
Harn,an. tell us that Virginia orisi-
nally acquired by purchase 1852 shares
OF the stock of this railroad monopoly,
for which, she paid the sum of s213,2oe
But in 1881 the state also received
scrip dividend having a face value OF
siea,7oO in the shape of dividend ool'
cations standing upon the footing Of
and bearing. the same dividend as
stock. but without voting power. The
aggregate of this stock and dividend
obligations in 1881. therefore, amount
ed to s467,9oo The stock and dividend
obligations of the company steadily
the dividend obligations sold as high
as ssas for 500 of face value, and the
stock at still higher figure.
In 1906 the Sinking Fund Connlls-
sioners and State proxies applied for
I. further scrip dividend of so per cent,
but the stockholders thought that this
would be rather radical. and, therefore.
compromised on further issue OF 20
per cent, making an aggregate OF 20
per cent. in scrip Observation-Disclosures
known as '.watered stock"
The commissioners assure US that the
action OF the stockholders was con-
.ervativc and express the opinion that
the condition of the company would
JUSTIFY further issue OF "watered
stock" to the extent OF % per cent,
( making q total issue of 100 per cent.
E;ut even al the case stands, the state
now holds s275oo0 of the original stock
of this company, and sSos,7Oo OF Its
..watered stock" having, a par value
of S5s4,900 and an intrinsic value OF
more than S2,000,o00, and receives upon
upon the entire issue.
Can any anti-railroad ranter in the
state, or elsewhere. show q more radi-
cal case of stock watering than this!
Has any other railroad corporation IN
Virginia poured 70 per cent. of water
into its stock and then paid per cent
per annu1l upon the whole issue? 9e
the Sinking Fund Commissioners de
clare that the r., f. & p. Railroad ha
acted conservatively and that 1T woul'
be justified in adding moro water L
the extent OF % per cent. and in con
tinuing 10 pay per cent. dividend o.
the whole.
The Times Dispatch does not disput
that statement Tho Fredericksburg
road occupies position Of advantage
and by the growth and prosperity. .
5s. the country, its traffic has enormousl
Increased since the State became
stockholder. Large sums OF mono
have been expended In improving til
road and its equipment, and the con
pany's earning capacity has enormousl
increased, although it's rates have bee
+
lowered from time to time Accor,
ingly. the State of Virginia and 9TH
stockholders have the right TO recelN
greater dividends. and the compar
had the right to increase its capt.
stock in proportion TO the enhance
value of the property Or, 10 quo
again from the statement of the sin
ing Fund Commissioners, the company
condition justified it In watering t
stock" but the fact that the Sta
has sanctioned the action of the col
pany and participated in its distrib
tion of dividend certificates shou
forever hereafter debar her from pr
testing against tho acts of other ia
road companies which may water tn,
stock" under similar conditions.
I