The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-08-01
RAILROAD NEWS.
Presidens Ripley Writes to
Senator Cummins.
Calls Attention to Statements
Made at Peabody.
FACTSABOUTRAILWAY
Discusses the Question q
Watered Stock.
Explains Why Companies Must
Put So Much into Lines.

Chicago. Aug. President E. p Rim
ley of the Santa Fe has written The
following open letter to Senator Cum
Minis:
Chicago, July Is. 1910.
ALBERT b. Cummins, Des Moines. Ia:
speech y D at psa lhmn your ehautauq paa
inst, you are reported as saying:
Il am not opposed to the railroads.
No man who values the public welfare
can be hostile to the railroads. but JUS
tice to all means to paw the righteous
dues as fixed by the laws of trade by
competition or through society. The
railroads of the country are capitalized
at ST.. 000.000,000. The highest estimate
have ever heard placed on the actual
their roads was $4,000. 900, 600. There is
nearly nine billion dollars of impure
and adulterated water. You have to
pay more than you ought to pay for
the service you get in order to pay
dividends on this vast capitalization.
The railroads charged excessive rates
and accumulated surplus and this
they put back into the roads in inn
provements, and they now ask you to
pay additional interest on this surplus,
secured by extortionate rates. In ten
years the railroads added $4,000, 900, 600
to their capitalization in better1nents
and extensions without the investment
of a single penny of Independent cap
ital.
when congress met a bill came
from the attorney general. I regret to
say that the attorney general forgot
that he was attorney general for co.
000, 900 people. But he remembered his
long law practice in New York, when
his chief business was to tell the cor
poration how to evade the law. This
bill provided for the repeal of the anti
trust law under which the traffic as
sociations were broken up and allowed
all agreements to go into effect at once.
This was a. plain reputation of the
Republican platform. Aldrich in the
committee room said the bill should
pass without changing of a letter Or
the dotting of an IL but as the bill
passed the senate its own mother
would not recognize it. If it had not
been for men like Senator Bristow the
bill as it came from the. committee,
would have passed the senate.
Senator Aldrich has vigorously OPP
posed all regulation of the railroads by
congress ever since the bill to create
the interstate commerce commission
was introduced in 1887. / was born and
always have been a Republican, but
cannot and will not follow the leader
ship of a traitor to his party and the
people," s
Doesn't speak for AIdrich.
I hold no brief for Senator Aldrich.
The bill he introduced in congress was
IN no sense IN the interest VI Tie ldli-
roads-on the contrary it was intensely
disliked by them. According to your
account he has sins enough to answer
for and he certainly should be alb
solved from the sin Gin your eyes) or
having in any manner favored the rail-
roads-it is true that the so-called lad
ministration bill' was shown to some
of the railroad presidents after it was
drawn-and it is also true that they
unavailingly protested against its
terms. Also, the attorney general
should be eliminated from the condem-
nation which attaches in your opinion
to every one who is disposed to be fair
to the railroads; if Mr.. Wickersham
has favored the railroads in any way it
has not been observed by those most
affected. There was in the bill only
one thing that could by any possibility
be considered as favorable to the rail
roads, viz: the right to make legal
agreements as to rates-a proposition
recommended by Roosevelt. by the in
terstate commerce commission, and in
serted, 1 believe, in your party plat
form. right, also, which all I'M
preiudiced students of railway eco
nomics realize as being a necessity.
This.-the only desirable feature of
the administration bilI-was eliminated
by you and your friends.
The capitalization Question.
You Sly that the railroads of the
United States are capitalized at seven
teen billions and that you have not
heard it claimed that they represent
an actual investment of over eight bill
lions; that the remaining nine billions
represents money earned by the rail-
roads ("extorted from the people, is
your way of expressing it) and invest
ed in the properties. Also, that in ten
years (you do not say what ten years.
the railroads issued securities of the
face value of three and half billions,
without the investment of a single
penny of original capital.
If you had cared to make a fair
statement instead of an inflammatory
and partisan speech you would have
stated that of the seventeen billions OF
nominal capitalization only thirteen
and a half billions is in the hands of
the public; you would have stated that
substantially 20 per cent of this capt.
talization paid no return and that the
entire return on outstanding capital
was 35-100 per cent. These figures
were just as readily obtainable from
the reports of the interstate commerce
commission as those you selected for
your purpose,-if you had cared to
tell the whole truth / do not think it
would be possible to ascertain at this
date just how much original invest
ment'' has gone into our railroads.
Millions on millions have been lost.
sight of; millions wiped out by fore
closure Yet I am willing to venture
my opinion against yours that this
original investment" far exceeds the
eight billions you allow, but even if we
admit this distorted view the earnings
were less than 10 per cent on this eight
billions. We know (and you know, be-
cause you have admitted it, that the
existing capital probably does not ex-
coed the cost of reproduction. Your
idea therefore seems to be that the
railroads alone of all the industries oe
L.
share in the country's prosperity and
growth, though they have been the
chief means of creating it; that these
who risked their money in railroad Sc
curities in the early days are entitled
to no profits beyond simply interest;
that although the Kansas farmer has
seen his land advance in value four or
i've hundred per cent, due to the build