The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1909-02-03

It may be wise TO RESTRICT r- -ae-r.fst,=
ne issuance OF fictitious securities. but
sne history Of the past demonstrates
that the sale Of railroad stocI<S ar a
large discount or the Offering Of stocks
as a reward for the purchase OF bonds
vas one Of the influential factors IN
promoting the speedy construction of
railroads through sparseIy settled re-
g1ons- A banker could not be induced
10 ogy stock at par IN a speculative
ra1road enterprise through a new
beyond reasonable rate of interest on
rs face value He could invest his
funds in many different securities
upon equally as good terms where there
w ~s,uio pc aosotueefy no opportunity for
loss If he were to take chances on the
success of the venture which might or
might not be a good one, he would be
dIlFftfk1g to buy stock unless he could
get II al large discount, or as a. bonus
IN connection with the purchase of
bonds But for this practice many Of
the important railroads Of the country
would not have been built to this day.
and the development Of the west would
nave been retarded many years and
II must be remembered that stock sold
today for . cents may 80 days hence
De selling above par Union Pacific
started IN at - cents was Increased
to . cents by 10 per cent assessment
and is now in the neighborhood OF $50
Railroads Not OvercapIfaHzed Now
Whatever the past may have been,
the fact remains that the. railroads Of
today taken as a whole. are not over
capitalized II you will bear with me a
a moment while give you a few fig
ures Z believe I can demonstrate the
correctness Of this statement
According to Henry G Adams stats
tIcian Of the Interstate commerce COM
mission, the mileage OF railroads in the
United States on June Goth. 1906 was
216S03 miles After deducting securi-
ties of one railroad held by another. (
Of the United States including stocks
and bonds was S12,5S5. 45d ,554 or s5S.-
$50 per mile The commercial value of
the railroads Of the country. estimated
by Mr. Adams as OF June Goth. 1904, two
years earlier, is 81 244 So, eco Using
the formuIae of Mr.. Adams, and taking
into consideration the business of 1895 4
and 1866. their commercial value would I
be SI7-24s, $40. 900, nearly five billions I
more than the capitalization value Their 4
market value as shown by the quoted 1
prices Of securities would run from /
eleven TO fourteen billion and up
wards I
Tax Basis Above Their Capital
true value Of al property in the United
States, as reported by the federal cen
sus bureau the assessment OF Amert- I
can railways for the purpose OF taxa
ton is 81. $50. 000. coo. or more than $500
10 600 in excess Of their total capital 1
iZztiOn including stocks and bonds /
Again, the average capitalization per
mile Is S5S. 050 Union Pacific railroad 4
in Kansas from Kansas City TO Topeka
Is assessed At $15s1e3 per mile Topeka 4
to SaIfnA SIS, 005 and Salina TO Colo |
RADIO state lire 81 19. or an average,
main Hne, Of s5S.362 per mile
The average assessed value OF the
Union Pacific in Nebraska, including
main line and branches, is $4,000 per
mile, or s1ss per mile greater than
the average capitalization Of all the
in the United States
To throw another side light on the
consideration of this subject, let US
compare the Capitalization of American
and European roads
United states. s5s,o50 per mile
British $Z73,zSf per mile. nearly AZ
times as much as ours
Germany (Govtl, S1as.eO0 per mile,
nearly twice as much as ours
France, $4,000, or nearly 21z times
Belgium. s1ss,oee. or nearly times
Trs-
senator Bristox and alton Case
The attention Of the people Of kan f
as has recently been recalled by one
Z its distinguished citizens 70 the re-
rganfzation Of the Chicago & Alton
abroad and the men who were con
1ected with IT were referred TO in h
arms which could scarcely be called
onplfnentary- l do not have the time
0 auaIyZe al the facts neither do I i:
are TO provoke q controversy with re- Il
pect 70 this transaction. but do wish
D present Z few salient facts in re-
ard 70 it. It IS one Of those matters
bout which only one side has gone tot
ne public
II Is generally supposed that the pro-
rs of the transaction whatever they
lay have been. were received by four
romfneut New York gentlemen As
matter OF fact those four men were
citing for q syndicate Of log different
rms and individuals
At the time Of its purchase the pro-
erty was worth something more than
5s, 00e, eco The syndicate paid for it
q, or. AS in cash From this should
z deducted q 80 per cent dividend So
S, $50, leaving q cash investment Of
81, 404 245-
The road WIS uudsrca pitaHzed- Ac-t
ordfug to Mr. Blackstone for many !
ears its president the line was CAPT :
allied for less than 60 per cent Of its
ctuaI value II was by him deemed
upOrtant that the capitalization
1ouId be increased to correspond with !
le enhanced value Of the property j
It was also necessary 10 make large I