Tulsa daily world. [volume] (Tulsa, Indian Territory [Okla.]) 1905-1919, 1915-01-03
Fiction In Fiction Charges.

flcuOn III f1ctlOn CnargcS.
The appeal OF the railroads for re-
lief cannot be brushed aside lightly.
Decent regard for the rights OF in
vestors and wise consideration for our
own self-interest forbids us to ignore
1t, Ancient prejudices and knowledge
or suspicion OF overcapitalization do
not warrant an attitude or indiffer-
ence or hostility.
There has not been so much over
capitalization as has been suspected
and asserted. For such overcapitall-
zation as may have been committed
the public is at least in part response
BILE. Both of these propositions are
susceptible of proof,
A comparison of the capitalization
OF American railroads with that Of
European railroads indicates the fair.
ness of the former. Railway capital
ization Is rigidly limited in Europe,
especially In France, where the gov
ernment has regulated 1t from the
beginning of railroad construction in
that country The average stock and
bond debt per mile of railroads In
England Is $265,000 In France, $751;
600; In Germany S109,000 in the
United States, $50, 900. The European
railroads are, In some respects, bet
ter than ours, but the comparison
upon the whole negatives the idea that
our railroads are greatly burdened
with fictitious capital. In this con
nection 1t should be remembered that
France granted subsidies to railroad
companies, guaranteed bonds, stocks,
etc. At least a portion Of the alleged
overcapitalizatlon of American rail-
roads represents bonuses, in lieu of
such state aid, and discounts which
1t was necessary to make In placing
the. securities of new companies in a
new land.
Some Evidence at Home.
A comparison of regulated Amer-
can railroad capitalization with un-
regulated American railroad capitali-
zation more conclusiyely shows that
there is no extensive overcapitaliza,
ton. A number of the American states
now have laws regulating and re-
stricting railroad capitalization. In
these states securities can be issued
only upon the approval Of the re,
spectiYe railroad commissions. 1t
must be assumed that there is no
overcapitalization of the lines con-
structed under such laws. And yet
the capitalization of the older rail-
roads compares favorably with that
of the newer railroads, quality Of
plant considered. This fact. may be
illustrated by some concrete examples.
Texas was the pioneer in the regu-
lation of railroad capitalization in
America. 1t has had 21 years ex-
perlence of its railroad stock and
bond law. Most of the trunk lines
of the state were constructed In ad-
vance of the enactment of this law.
CONSTRUCTION since that time, with
three pr four honorable exceptions has
been confined to branches, extensions
and short lines. Nevertheless, capi-
talization Of the old lines compares
faVorably with that Of the new, quail
lty of the railroads considered.
Old and New Texas Lines.
For example, compare the capital
ization of the Trinity & Brazos Valley,
constructed after the enactment of
the Texas stock and bond law, with
the Texas Il Pacific (the most highly
capitalized of all Texas railroads), the
Houston & Texas Central and the
Gulf, Colorado & Santa Fe, construct.
ed before the enactment of such law,
and consider In this connection the
undisputed fact that these older lines
are very greatly superior to the Trim
ity & Brazos Valley.
Per mile T&Bv TAP H&To Gc&sF
Stocks and
bonds, s4e.757 s52,aa4 s2s, ,sla s42, ,4aa
s., b. &
other dbts57,s s59 57,427 3O.635 44267
That Fictitious $500, O,OOO, 900.
Notwithstanding such evidence as
this. Texas politicians still insist that
the railroads of the state are bur-
dened with 100000, 900 of Fictitious"
stocks and bonds. For the basis of
this assertion, we must go back 20