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

expenditures for betterments and ex-
tensions which would cost more than
SO. 00o, 600 It was also essential TO make
provision for retiring the funded IL
debtedness Of the eompan~ which ma
tured within A couple Of years and bore
interest at the rate OF per cent or
Z Per cent Per auuun-an to issue seeur1-
ties in lieu thereof bearing a less rate
OF interest The finances of the com
pauE were ttereGpon reorg4uized- and
c0mmou stock. preferred stock 3 per
cent and az per cent refuuding bonds
issued A few OF the bonds were sold
but most Of the securities were divided
among the members Of the syndicate in
consideration Of the cash advanced by
them There Is nothing to show how
many Of these securities were after
wards sold, or If sold for what price,
but by taking the average market valu-
atoms. as shown by authentic market
reports, the market value Of the Secur-
tiles distributed among the syndicate
was $50. 500. eco
For these securities the net sum Of
$1,000. 900 was paid. leaving as profit
$6s0G0.G00 on 4 cash transaction in
voIv1ng hfty-seven millions Of dollars
i trIfIe over 10 Per cent
Watered Securities and Public.
But YOU fuqufre-what about the in
jury TO the public by the issuance Of
watered SecurItfes2 Let me say in the
first place, that the rates have not I
been raised one penny, and the public /
single dollar because of the increased I
capitalization Of the company
In the next place. II must be borne /
in mind that the new securities draw a 4
smaller rate Of interest. resulting in 4
the payment Of less sums Of money in !
the way Of dividends and interest than 4
was paid on the securities in existence
before the reorganization
To be more specific After deduc1-
ing interest on the amount invested n 4
permanent Improvements or better
ments subsequent TO the reorganIza-
ton. the total payment on GIV10eTleS
and interest for the year 1905 was
81 sos 409 81 No dividends have BEEN
paid on the common stock
The average interest and oIvldends
for six wears. December 81. 1s94- % Z
December 81, 1893. was $3.50 350-T-s
making an annual saving BY recsp Ital-
cation. year 1905, compared with
average for six years, 1884 60 1893 Of
1851 -945-41-
Il Is true 10 dividends were paid on
he common stock But It viii be IN
Ierstood- OF course that the company
vas under no obligation to pay them
InIesS II had the money % 90 So and
iobody could complain about Il CtheE
Ian the stockhoIder himself
importance of Railway Investments
There are many more things I would
Ike TO touch upon. but do not wish to
resume too much upon your patience
Allow ne 70 urge. however the m
ouragfug the investment Of moneys IN
he railroads OF Kansas You have
merely entered upon the Development OF
our great natural resources You viii
leed more railroads, and you now need
he expenditure OF large amounts IN
he bettermeut Of the railroads you al
eady have You need live railroads.
ct dead ones You should want the
Of your railroad properties
Interested in their continual growth
nd development and using their best
udeav0rs TO DOOM the best state in
he Union You ought not send them
0 Jail and leave the operation Of your
aTIr0ads TO statesmen whose theoretf-t
al knowledge IS al that could be de-
irsd hut whose practical experience IS
ery limited II is al very wei 10 reg
late the railroads but I submit that
ne power ID regulate should not De
sed as = device BY the state 10 be-
ONE their general managers And
rhiIe the people are regulating let Il
{ understood by the railroads that
heir interests also are to be consulted
I'd that investments in railroad pro-
critics VIII nat only be protected but
ucourzged