davidaulloa/AmericanStories huggingface dataset:
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22

value at the time of the reorganiza-
ton, was exchanged for the same
amount $102 0,000-of new com
mon stock. This new common stock
now draws five per cent a year in
dividends, and until the recent de-
plorable slump in stocks it sold above
par.
They will tell you that it would not
be fair to squeeze out the water in a
reorganization. For example, a great
many small investors had bought
Union Pacific, Northern Pacific, and
Atchison stocks during boom times.
Times turned bad. The roads could
no longer carry the overcapitalization
and the proftless branch lines with
which financial geniuses had loaded
them. Bankruptcy followed. But the
small, innocent investors must not be
frozen out. They must be permitted
to exchange their old stock for new,
and so given a chance to recoup when
good times come again. Such is the
argument.
AS matter of fact, it doesn It work
that way. The ordinary innocent
investor gets frightened when he
sees the road approaching insol-
vency, and dumps his stock on fall
ing market for what little it will
fetch; or he is pinched in his own
small business and has to sell; or he
can't pay the assessment. In any
event, he throws over the stock. The
opulent reorganization syndicate
or individual fnanciers scoop it in.
Thus Kuhn-Loeb and their reorganiz-
ing associates, including Hartman,
emerged from the Union Pacific reor-
ganization with great blocks of the
stock, which they had taken in at bot
tom prices. Northern Pacific reor-
ganization landed almost half the
stock in the hands Of Morgan, Hill,
and their crowd.
Always Wall Street Wins.
After the panic of 1898, about thirty
thousand miles of road underwent re-
organization. One might mention Bal
timore & Ohio, in which old first per-
ferred stock got SO 1-2 per cent of
face value in new preferred and rs
per cent in new common; the old
second preferred received 20 per cent
in new preferred and $50 per cent in
new common; and the old common got
20 per cent in new preferred and 100
per cent in new common. The gen.
eral effect Of the reorganization was
to infinite further capitalization that
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22
NAMESAKE CONTEST.

Subscriptions to both Weekly and
Magazine are accepted in this con
test. Read the advertisement, and
write to The Jeffersonians, Thomson,
Ga.
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22

The government and frst-mortgage
bonds covered the cost of building the
line. The other 100000 Of securi-
ties represented profits. Presently
Jay Gould took a hand in Union Pa
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22

SoohSl hou PGC,oUO,OUO VI COuuOu Il
stock-all water and of little current
value. He persuaded the directors
OF Union Pacific to buy these lines
and to exchange Union Pacific stock
at par for their bogus shares.
Overloaded Union Pacific went into
bankruptcy in 1893, and was reorgan-
lied. Holders of the old bonds re-
celved In most eases par in new four
per cent bonds with bonus of fifty
per cent in new preferred stock.
There was issued $75,O0O,00O of new
preferred stock, practically all Of
which was given in bonuses to the old
security holders and to the reorganiza-
ton syndicate. The $61, 100000 of
old common stock was converted into
the same amount of new common.
Dividends Of ten per cent a year are
now paid on this new common stock.
Some part Of this is due to Mr.. Har-
riman's brilliant speculations in the
stock Of other roads. The rest of it
is due to a heavy traffic carried at
rates higher than would yield fair
return upon the investment. Incl
dentally, the road received the gift of
an empire in public lands The moiety
remaining unsold at the time of the
reorganization was valued at $13,-
358,5OO.
The Northern Pacific Jared even
better in this regard The govern
ment gave it 100000 acres of pub
lie lands-a piece Of generosity which
in no wise restrained the stock-water-
ing proclivities of the builders and re-
organizers.
Northern Pacifc's Water Cure.
The road has been reorganized
three times, and is now capitalized at
more than $4,000 a mile, excluding
the bonds that it issued jointly with
the Great Northern to pay for Chi
cago, Burlington & Quincy stock. Ca
madam Pacific is capitalized at only
$4,000 mile. Northern Pacifc's
funded debt per mile, excluding the
Burlington bonds, is greater than the
entire capitalization per mile Of the
Canadian road. To understand how
Northern Pacifc's capitalization has
been boosted to this figure we need
only glance at the last reorganization.
There were $42,000,0O0 Of frst-mort-
gage bonds outstanding. In the reor-
ganization each 81 900 bond received
1880 in new prior lien bonds; all
second and third mortgage bonds re-
ceived 118 IL per cent Of face value
in new prior lien bonds, SO per cent
face value in preferred stock.
Each $1,000 bond received $1,685
in new securities.
The old stock, practically all water,
was exchanged for new stock of the
same amount.
The Atchison, Topeka & Santa Fe
has been reorganized twice. In the
last reorganization the old general
mortgage 4 per cent bonds received
rs per cent in new general mortgage
As, 40 per cent in new adjustment As.
Thus $129, 320,770 was converted into
S148718.983 in new q ner. cent. Old
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22
THE CHEAT OF OVERCApT-
TALIZATTON.

which he proceeded was thus ex-
planned by an admirer: "In reor-
ganlzing road Mr. Morgan takes
care to cut down fixed charges to an
amount within the minimum earning
power. After that is accomplished
everybody can pretty much help him
self"
In defending the capitalization of
the hard-coal roads in 1901, Mr.. Nc
Leod pointed out that four of them
namely, Reading, Erie, New York, On
tario & Western, and Lehigh Valley
had outstanding 1882, $4,000 of stock
upon which no dividend had ever been
paid and which had merely nominal
value in the market.
So, if this was water, who was hurt
by it-no dividends being paid and
the stuff being Of little value? Why
bother about the old-rags heap? But
today dividends are paid upon all of
this stock with the exception of Erie
common. Last year the prospect OF
dividend on Erie common seemed
so bright that the stock sold at above
$50 a share, while Readings watered
common sold at 1854 share
The Baltimore & Ohio and the Lake
Shore roads have jointly bought over
sixty million dollars of Reading stock.
out Of total Of $14O,000,O00-there-
by passing it on toward a form If
capitalization with fixed charges. The
New York, New Haven & Hartford
has bought $29,OOO,OO0, or one-half,
OF the common stock of the New
York, Ontario & Western, thereby
putting it also in the way of becom-
ing a form Of capitalization bearing
fixed charges-for these purchases by
one road of the stock of another are
generally financed in the end by an
issue of bonds.
The Loot in Union Pacific.
How could all this watered stock
be so handsomely supported and be-
come so agreeably valuable unless the
railroads were charging the public
for coal and for transportation much
more than enough to yield reason
able return upon the actual invest
ment?
It is true, as Mr.. Stickney says,
that the average investor in railroad
securities gets only moderate return.
The railroad monopolizes the COM
modify and charges more for it than
it is fairly worth; it issues four per
cent stocks and bonds to the full
amount that the monopolistic earning
power will support, and sells them to
the public; then it argues that the
charges can not possibly be too high
because the investor is getting only
3.65 or 1902 per cent.
After the Credit Mobilier scandal,
Congress investigated the Union Pa
cifie and found that it had cost the
contractors little under $51 900, 900
to build the road.
For this there was issued,
S 27,00O,000 Government Su BIS idy
Bonds
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22

Renew your subscription now. If
you don't, we must cut you off when
the time is up.
The Jeffersonian. [volume] (Atlanta, Ga.) 1907-1917, 1909-04-22
DROPSY

cure. Trial treatment given free to sIif-
ferers; nothing fairer. For ciScular, tesfi-
DR. I'll. Fl. GREEN'S SONS, Box K.
Atlanta, Ga.
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
MURRAY ADVOCATES
BANK COOPERATION
Comptroller Has in Mind
Standard Form of Exami-
nation and Report.

I Careful and detailed cooperation be-
tween the Federal and State bank s,i-
reTvisory authorities is proposed bv
Comptroiler of the Currency Lawrence
/ .. Murray in a letter which he aas
addressed to the State authorities I'm
charge Of the matter. For a long tlne
Mr.. Murray has had in mind the per
lection OF such a project. and be be-
'ieved. from his studies Of the experl-
ence Of the past, that great benefits
may be secured through it.
TIE fact that TWO classes OF banking
anstitutio0s operate side by side IN the
same cities. some under Federal and
some under state supervision. Snd some
absolutely without any supervision. has
made it extremely difficult in many
cases 20 get at the truth about the con-
diJion of institutions. The same per
son OF firm may be a borrower at a
state institution and National The
National Bank Examiner. unable to
determine the extent Of the liability 20
the State bank, may be misIed into sup
posing that paper Is perfectly safe
when, if he knew the aggregate or the
borrowers obligations. he would be
moved To- insist on steps toward lioui-
datiou.
Therefore the Comptroller has prOpos-
cd 20 the State authorities, that il they
have no means for q detailed study of
lists OF borrowers IN various localities,
they proceed TO acquire them. In this
cooperation between the state and Ma
tiou9l autF0Hties would be OF especial
value Only by such Joint action would
IL be possible to get at the accurate
Facts about borrowers financial condi-
tiOns But with complete lists OF bor-
rCWerS in each district. from both State
and uatiC1dl banks. available for the
use Of both classes OF examiners. accU-
rate conclusions could be reached con-
corning the reliability OF all borrowers
with such cooperation. moreover. the
possibility If shifting funds and secur-
tiles anon banks. in authorization OF
examination, would be lesseued bal
aUccs due ack and forth among banks
could be compared and aEalyZed ana
ln general much more accurate check
could be maintained against any pos
the examiners.
There have been a good many de-
inonStrdtlOnS IN actual experience. of
the need OF such cooperation So far |
ms possible. the State authorities I'm va /
Hpus states have cO-Operated with the /
'duOuM supervisory authorities in
Identical dates for eXau1ina-
ton Of banks. but this Is frequently I
provide for a different number of ex- ]
'mlndtous per annum - sometimes /
greater and sometimes lesS-than the 4
4 ederal .horlties impose.
The Comptroller believes that if an |
The State supervisory authorities would /
come 10 Washington for conference /
with the national dcpdrtemnt much i
benefit would result from the exchange (
If ideas. He has IN mind the develop /
ment. II possible, of a standard form OF /
sanitation and report FOR All banks. !
under whatever supervision, which !
may later be worked out
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
NEW YORK DAZED
BY GRAND PAGEANT
All Past Efforts Eclipsed by
the HudSon-FuIton
Parade.

NEW YORK. Sept 2s-TEe' FIRST big
land parade Of the Hudson-Fulton eel
ebration which traversed the streets Of
Manhattan this afternoon was the most
spectacular event planned tor the week
Arranged originally with the educa-
tiOnal feature in virw, the parade grew
out Of the first Planned narrow limits
until when Major Gen. Charles T. Roe
grand marshal. gave the command 70
march soon after j o'clock, a new rec
ord for display iu a street demonstra-
ton had been made.
There were more than 10000 men.
members of every national and patu-
oUc society iu line. escOrtinE nfty-four
floats repre- sentlug The Indian. Dutch,
Colonial and modern periods Of this
countrv's history. the floats presenting "a
mass of coloriug that
Cazed the eyes.
Long before the hour 90 start. the line
from lo0th street 90 Washington Arch. a at
the bottom Of Fifth avenue was
iammed with spectators, the crowd be-
ing masscd so deeply that there was
grave danger Of accident at many
points. n was not a poor mans dem
onstration, as nearly every foot OF the
way. even the broad stretches alouE
Central Park. were filed with grand
stands tnat had been erected and ad-
mission to which ranged all the way
from s. 90 whatever the curiosity seek
cr was willing 90 PAY
Before the Start.
Prior 10 the start of the parade the
floats were ranged along luth street.
Zach float mounted on especially de-
signed trucks was preceded boy "a banner
which bor'. the name OF the particular
character OF event represented.
Leading tho parade as lt started south
this afternoon WAS Mayor Mcclellan and
Herman Ridder vice president OF the
commission. Then came Major General
Roe, witt Ills chicf-ot-stam. Lieut. Col.
George A. Wingate. and bis aides. all
drawn from the ranks of thc NstionaI
Guard. They were followed bv "a body
Continued on Fifth Parcl
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
SIX STOCKAEN DIE
AS TRAINS CRASH
Fire Adds Horror to Wreck
When Flyer Strikes
Freight.

CHICAGO, Sept. 2S.-At least six per-
sons were killed and a score more or
less seriously injured early today when
the Panhandle'S Cincinnati Flyer crash
ed into the rear end OF special stock
train on the milwaukee road near the
Union stock Yards
SIX bodies had been recovered at .
clock this morning and two more were
DeheVed 10 Dc dead undt' the wreck.
al OF the dead were Nout,na or North
Ia. l'ehola ,., S5lockmen, none OF the passen-
gers ON the passenger traiu was injured.
gers on the passenger train were injured.
The recovered dead are.
JOHN POSTAL, Wiuoua, n. D.
The Dead
JACOB NOTZ Pullman. Y. -.
FRANK KOCH Dickinson. y j..
II. II. POTTER Diamond, Mont
DANIEL SCHLONGER Fwette "
ID.
Ii. y. HAMILTON, Minnesota, y. ID.
The Injured
w. w. Mcdonald Elgm, H.. spine in
jurcd, scalp wound
G., IT, Hamilton, Livingston. 5 u. cut
and bruised.
Edward Aompc. right hand broken
while assisting in rescue work.
Henry r. Bond. Milwaukee, conductor
on the Chicago. Milwaukee and St
Paul train, right leg broken.
Herman Worth. stockmau or Hapin-
son. y. D.. right foot broken
The dead and injured were huddIcd i'm
the cabOOSc of the stock special when
the wreck occurred. The yyrc-Iztt-c
caught fire when the stove iu the caboosc
ovcrtumei. Two cars OF stock were
burned 20 death before the hrcuneu
could cxtiuEuish the blaze
The wreck occurred near RpckucT
street on the Panhaudlc's right of way
As soon as the FIRE was controlled the
hrcmcU and policemen who responded
10 an alarm began giving attention To-
tho dead and injured.
Shricks from the mon buried under
the wrccha-c told the TcocuCIS where
to work Many victims were uiuinupd
under The cars. and the burning flesh
Df the cattle The passenger ifaiu had
plunged into the cabo1sC of the stock
train. and the caboOsc had been showed /
clear through the car of cattle directly {
ahead. Three other cars were tclescop-
ad hv the shock. The caDOoss and stock /
-ar were burning hcrccly when the FIRST 4
engine company arrived
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
PRESIDENT TAFT
SPOKANE GUEST
Will Visit Places of Interest
and Then Go to North
Tacoma.

SPOKANE, Wash, Sept. 5s.-THe train
bearing President Taft. Secretary Ball
niger. and John Hayes Hammond reach
cd Spokane At $50 o'clock today. A
large crowd was At the station 10 greet
Mr.. Taft when he arrived under an
escort Of a committee of the chamber
Cf commerce.
The President and his party had
breakfast with the trustees of the
chamber and later went for motor
ride AROUND town and reviewed "A milf
tary and civic parade.
The city is filled with persons inter
cStcd I'm forestry and irrigation who
have come 90 near the President speak
on conservation today.
After the address Mr Tart will talk.
luncheon with the local committee aus
90 on 'u automobile ride tD Hayden
lake through the Spokane valley.
a visit So Couer dAicnc forest and
CUUer dAlone viii complete the DAYS
program and President TAFT wiIl leave
tpr North Tacoma az Q o'clock
Too Much for President
President Taft is showing symptoms
today Of going ON "A strike He Is chat
Ing under che additional work given him
by the committees at tho various places
visited and unless the enthusiastic
gentlemen quit giving him extra stunts
TO do he will give their towns a very
forceful evidence OF the Presidential
5ispleasurc. cutting short their pro
gram iu its midst
Mortrose. Col. came near being the
last straw to break the back OF Ttfrs
patience. The original program arang-
C6 FOR MOutrOse thrOggu Secretary Car
pCatcr at Beverly was strenuous enough
1OT TIE President to go through. but
when he reached the town ue discovered
bat the local authorities had arranged
iDg extra speeches aud suppt- IeI
smiled grlmlE. hut went through tEc|
whole program. extras and aiL When
~ got back Co. zine train at i0.3O instead
oi about . o'clock. ar Doc had uouDd. hp
WAS nearly exhausted and 'r8it u few
things more vigorous than polite and
Paid his compliments Go local commit
-eemoH iu general.
A. ogden, Utah. yesterday. the towns
people had 90 sorts OF pleasant Things
.ur him 10 do that was not on the orig
nal program, and when Ec got half
Continued on Fifth Page)
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
BARGE SINKS IN BAY,
CREW IS RESCUED
w E Barker, Bound for Norfolk,
Founders in Chesapeake
Gale.

BALTIMORE. Md. Sept 2S-TEe
barge w. T. Barker. which sailed from,
This port. m company with the barEes
Vulcan and Neptune U tow of the
Southern Transportation Company tug
Dixie. fog Norfolk. foundered ina the
Chesapeake. The barge parted her tow
during the gale that swept the Chesa-
peakc and Delaware capCs, but the crew
was rescued 10y the Dixie. The ". T..
Barker Is owned by the Dempscys. OF
Philadelphia.
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
Dust-CoveredVeteransWiI
Lead the Chambers
Floral Parade.
Cars Arrive In Ar moon.
Bulletin to Give Ad-
vance Notice.

The Frank A. Munsey reliability
cars, sprinkled with dust particles
representing the roads all the way
between Boston and the Capital
will lead the Chamber of Com
merce automO5,s floral parade day
after tomorrow.
The cars viii reach the Capital
early tomorrow afternoon. The
time of arrival will be bulletined in
The Times window in the morning.
Believing that the spirit of the
days when Rome flourished. and
triumphal marches were accorded
returning heroes would be re-enact-
ed in modern setting by thousands
turning out to witness the men and
machines that have done strenuous
things, the committee on arrange-
mentS for the parade last night
voted to a man TO have the Munssy
cars placed at the head of The
pageant.
COMMITTEES REASONS.
The decision was reached al the
conclusion Of several enthusiastic
speeches made by members of the
committee who declared thar from
the standpoints of automobilists and
the public it was essential that the
reliability cars should be given the
most prominent position in the pa-
rade, since they would be OF no
more interest than any other ma
chimes entered.
AT the outset, there was a slight
opposition to mdecorated cars lead
ing decorated ones. This was yoicsd
by members who stood out for en,-
oodying only the esthetic feature
in the parade. 1t was scarcely ex-
pressed, however. before a volume
of arguments against it BEGAN. IN
be expressed by members favorinS
first place for the Nunsey entries.
and, when the question was finally
put to a vote, il was found that
the opposition had been entirely
quashed.
Stoddar3's Report.
The discussion over the place TO be
given the Munsey cars led of with
report that Joseph Stoddard. deputy
grand marshal, who. after having con
.erred with officials OF the reliability
contest. said he had been informed by
hem that they would not ask the en-
rants in the reliability TO participate
IN the par1de unless they could be given
irst place or the position immediately
pack OF the electric section.
Mr. Stoddard declared that the posi-
non OF the Munsey officials had been
piper HeIdsieck tobacco Is a gentle
mans chew and gentlemen chew Il. Do
,ou2-Advt-
The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1909-09-28
Cheered by Hundreds Cars
Leave Gotham Just
After Daylight.
Drivers Realize That All
Depends on Results of
Final Dash.

NEW YORK, Sept. 28.-Cheered
BY hundreds of Sightseers who are
here for the Fuiton-Hudson celebra-
ton, as we'll as by crowds of New
.4erkerS-Who got up before break
fast 10 bid them good-by, the cars
in the Frank A. MunSey reliability
run trailed out Of New York city this
morning just after daybreak.
IF they would start at , a. H..
there would he a crowd to see them
off, >" remarked an official of the
American Automobile Association.
Members of the association as well
as Of the Auto Club of America 1ysrc
on hand to see the start.
The scene was impressive. Bv )
o'clock most of the drivers and OBJ
servers had gathered at the Munsey
run headquarters to arrange the Last
details before the start.
is CRUCIAL TEST.
Every man seemed to realize that
the run from New York home is the
crucial test, and that on that test
the success or failure of his
record depends.
IN preparation for the sarlv morn
ing start, tie party at 7 the dinner
given the contestants last evening
by Frank A. Munsey at the Waldorf
broke up early.
Almost as early as those directly
in the run were the spec
tatOrs. They were not of the small
boy type. The persons who get up
at 8 a. m. were those who we're
vitality interested in automobile runs.
and in the Munsey tour in particu-
lar. Many Of the personal friends
Of the owners of cars, representa-
tives Of the factories represented
in the run, and others interested
directly in various phases of the
contest have seen in New York dur
ing the motorists brief stay there, /
and these were all on hand TO see
the getaway
Start on Time
The cars started for their run to Phil (
Idelphia at exactly o'clock. Chairman !
rreso was on hand. and was kept busy /
shaking hands with the auto officials
resent He was congratulated again /
md again for the part he has PLAYED in
making the early stages OF the run a i
success
There was an unusual air Of expect
nev among the drivers this morning.
Through Gotham's streets enough peo-
BE were astir to give the tourists a
ousing send-oH every few blocks. The
anne excellent police protection that
Continued on Second PageD