The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1910-10-27

/ plSI0 ana II is Impossible LnlS GATE
| to say as to all its component parts
| just how it was financed. Doubtless
\ many of these parts were built by the
proceeds of bond sales with a bonus
| in stock, which was in those days Gas
now the accepted and only way in
which new enterprises could be float
| ed. No man would have bought bonds
| in such enterprises without expectation
of more profit than the mere interest
thereon. But in many cases the in
vestors not only got no profit but lost
a part of their capital, and in the re-
| organization of 1895 nearly all the
| bondholders submitted to a scaling
| down of their interest, the acceptance
| of junior securities and the payment
| of assessments.
You ask that I state what was re-
ceived for the $102, 100000 of common
| stock issued at the time of reorganiza-
ton. This stock was retained by the
| original holders on payment of an as
sessment of ten dollars per share: but
| at the same time the fixed interest
| charges were cut down five millions
year, and preferred stock issued for
substantially 00,000,000; so that the
total Capitalization remained practical
| ly unchanged. 1t is impossible to say
what the stock cost its holders-some
| of it I know cost more than par and
| some of it much less.
+ Old Company Earned Little.
But it is an interesting fact that in
y
of the old company the average return
on the capitalization was only 1913 per
cent on it's bonds and 2.12 per cent
on it's stock, or total OF 2.S2 per cent
on it's entire capitalization. Now you
may assume, if you please, that a con-
siderable part ~of the capitalization
represented only the hopes of the pro-
moters-even suppose that one-haIf OF
it was what you call water (wh1cn
would be a violent assumption). and
it appears that the owners of this
great property, which has been the
chief factor in making Kansas what 1t
is today have received totally made
ouate return for the use of their
money to say nothing of the risk they
took. The property was like dilapi-
dated house in an unpopular neighbor-
hood-everybody looked at it askance;
but those who believed it could be re
habilitated and who thought that the
street might some time develop into a
great thoroughfare have been reward
ed, but not unduly. and not at the ex-
pense of the public. The road has
prices and has welded them into a con-
solidated system which serves its pub
lie well and cheaply.
You ask if the public is not entitled to
this information from the government
itseIf?" Since the whole reorganization
nIan was given the fullest publicity and
is still a matter Of record in all its
details 1 fail to see why it should be
reproduced at government expense. II
was pending a long time and so far as
know was not objected to or ques-
toned by anybody.
Payment of Wages.
Your estimate of our financial condi-
ton is much overstated. Our social
ed surplus is all invested in the pro-
perty, and our cash on hand is merely
necessary working capital plus certain
monies remaining from our last sale OF
oil IF which will also he spent
in Improvement on the property. All
this has no relation to wages; every
business enterprise must be conducted
on business and not on charitable lines.
The Santa Fe pays current wages and
in addition does for it's employees much
that is not nominated in the bond. !"
If the party you mention has worked
for % years at $1.35 per day it is prtma
facie evidence that it was all his ser
vices were worth. But if he has
clear record he will be pensioned when
he needs it-and I have no doubt there
are many like him in other walks of life
in your state who have been equally
poorly paid who have no provision for
old age or disability; the limitations
of humanity are unfortunate but con-
stantly with us. 1 suppose most of us
think we are underpaid but railroads
as class pay better than any other
industry as everybody knows.
1 am disposed to admit the justice of
your criticism as to that part of my
letter which referred to your holdings
of national bank stock, as well as my
reference to your former activities as
a contractor; these matters are your
private affairs and have no proper
place in this conference.-the were in
troduced because of the feeling that all
railroad men share that their interests
are singled out for persecution under
the guise of regulation while all other
industries (many Of them far less
worthy are unmolested. 1 know all
about the regulation of the national
banks-if the railroads were as free as
the banks in the conduct of their af-
fairs there would be no complaints. 1t
is not regulation to which we object
it is the constant meddlesome interior
cnce with almost every detail of our
business-such as applied to national
banks would raise a howl from end to
end of the country.
I write this to you in the effort to
make you see wherein you are wrong
in your attitude towards the railroads
and not because 1 am anxious either
to affect public sentiment towards you
or get into the limelight'' myself.
If you care to do so you may send
an expert to examine these figures-he
will be given free access to our books
and every facility for his work; only
ask that you make his report public.
Yours truly,
(Signed) E. P. RIPLEY.