The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-04-12
". W. Cook Proposes Solution of Rail
road Problem Which He Believes Is
Safer Than Government Ownership
n, WILLIAM ". COOK.

s,rrd''r" wan Street corporation lar
mar he is the author OF q standard
,-orL on corporation lar, no,o III Us
,sre,i.h cdttioH. Ho Is general counsel
OF to- N1ctuy Companies. He states
thu, his object IL ~ prortnt Govern
,senf Ownership by proposing some
thing uhich he beHor,s is safer. caster
,,rd beftcr.--Thc Editor.
~oMMoDoRE VANDERBILT was
the first railroad king. He built
railroads. consolidated them.
ruled them as his own. He was
M a banker nor q Wall Street financicr.
ge raised the money by selling bonds
N Europe and America. The bankers
we're his agents. Huntington, Crocker.
Hopkins and Stanford were men OF the
nmc type. They built to the Pacific
soast. Hill did the same in the North
vest. Gould did the same in the South
west. These men dominated their re-
spective systems OF railroads and took
sheir profit in stock, representing the
surplus profits They paid Wall Street
only commission FOR selling securities.
| They were the d!ctators of their roads.
Then hard times came and created a
new dynasty of railroad kings. The
,anic Of 1898 swept away the watered
2ock. Great railroad systems were
forecosed. Bankers were the repre-
sentatives OF the bondholders and the
bankers bought In the railroads at fore
closure sales, using the bonds in pay
ment Bankers then reorganized the
railroads. and kept the stock. giving the
old bondholders new bonds, with per-
haps sprinkling OF stock. Even the
old railroads which survived had to have
vast sums or money and had To go TO
the bankers TO get that money. Grad
I. uslly the bankers acquired control OF
nearly oil Of the great systems Of rail-
roads In the country.
The bankers dictated who should be
the railroad presidents and who should
N on the railroad boards Of directors.
The bankers controlled the policy as well
As the finances of the railroads. The
bankers sold the bonds and notes and
,.r s,o,t ~ Tho railroads Tbo hani,ars
held the cash deposits of the railroads
Wal Street was the home of the bankers
ard hence Wall St-ee, 5oroiro.o1 III.
rn-,ads
ms second dynasty. however. has be-
ecMe uecidcdly unpopular. The bankers
have brought about great consultations
which the pubic do not approve The
bankers caused nurchases ~ railroad,
| ,,oi,avs "a s.o.-.,,,.,
:. ''eS " We '''"e
~ ""'' ti"t '"e oahkers might get
a!se COMMISSIONS. The bankers were
guilty OF lmprovidence. waste extrava-
rance and. some crookedness IN their
control NJ Tho railroad.
| 4, t.,
Us pointed out py MT Brandeis. we
hsd right To expect prudence and rea-
sohabiy good financing from the bankers.
but they We're guilty OF financial recb-
| tssnes. and fur,bor :, 10 No, the ,roro.
,,,sc,ior ~ - h,,r.ar
' u,ohoso w w VI
ope.dte rai.roao or 10
engage IN industrial enterprises. and
s1eh ne Goes so there arises conflict
S'ween his duty 10 the corporation and
Is interest as a banker.
lNoTE-The statist. great English
arancal journal in It's Issue OF Januarv
| IL, 1914 said
p.
A,,,.rs nave u'sciosed la'en'
...a.i CIV u'a" DacKs from SO close an
n ,rtYs,.iaJ W oahNers WIN railway ana
a~a,,.,'' e"'s' p',ses' that errors OF man
~. r',t VI VI 'uusineht are attributed by
"a w. ''a.r nI' 20 tne MANAGING stan or
,s,,os,,,iI, ppis OF directors upon whom
...pohshilty rests but TO individual bank
re.,ors 70 "Nose REPRESENTATIVES, are d.
m,.t,r,,, W anuer'akinss suffering from
.rxn '. Vi o,'e k'lo or announcer
IA, -" nc ,vire ma IN iact demonstrated
| Sort, "n'ns house can perform the
sSrb,r. n OF rare'u!y ana iinpar,iaily
savings OF the investing public and OF al.
Ncting the affairs Of every large bor-
ss er IL assists 10 obtain capital from the
S". u Is now realized that for Issuing
mean ,T, ~ L. Do,n oanHers anu directors
Of the nurnher ~ na-sors n,hr co. oh.ai,,
tie capital they need. and that the under.
asings lucky enough TO secure as direc-
ore representatives of the great Issuing
cp,ai s,,a,,n. an u,aue snare OF the new
",, ia =, ,,,,a,
re.are mat ha,uars 1917, pu .,ns
~ 20 a limited rumber Of undertak,nrs
or should be able to consider on IT.
merits any and every application for new
$500 from whomsoever IL may be re-
ma, ia oruer that all sound enterprises
q ,nvss,,,,o aseo anu that tne savings
S,a,lons ,',,nsy pe saieiy p'aceo IN cor
Nd the most prostable return n is the
eNy Of bankers TO act impartially as be.
s-. borrowers ana investors. and to
m,,.. WIN me sreatest care the Sc
ss.ors -soo-. a,iu tno prices uemahueu
he investing r,,hI,n $1,000 ~ II
~ directors OF enterprises which need TO
Nrrow largely they Internationally throw
vel Weight on the side of the borrower
''"s' '-e investing public."1