The labor world. [volume] (Duluth, Minn.) 1896-current, 1916-09-30
RAILROADS ADEPT IN
PLEADING POVERTY
High 1ae. 81; s,s.,r r.:..,,.s:, other
Bunk Hanu~~ ~ottoS ,aas x
Common People. =
HUGE DIVIDENDS PAID
BY ROADS LAST YEAR
Many Are Deceived Because
Rain Water" Does Not
Yield Dividends.
By SCOTT NEARING.

The realroads have learned the
trick of pleading poverty. In the
Jolly Roger days of their youthful
exploits they spat upon Mr. Common
People. Now they approach him,
ginserly, hat extended, and humble
welcomed story of high labor
COSTS increasing operating ratio,''
decreasing net earnings and 're-
ceiverships." Some Of the ablest
men in the country make this plea
Perhaps you believe it. Anyway,
suppose we look for a moment at the
poverty as it really is.
More than $9OO,OOO,OO0 in interest
and dividends were paid by the rail-
roads to their bondholders and stock
holders in the last year, for which
the Interstate Commerce commission
has published complete fgures-1914.
Unofficial returns show for 1915 and
1916 even higher dividend payments
than those Of 1914.
The paper value, or capitalized
value of the railroads in 1914 was
eleven and a half billions of bonds
and eight and a half billions Of
stocks. Tie interest paid on the
bonds amounted to 439 millions; the
dividends paid on the stocks were
453 millions, and besides these pay
ments there were 46 millions in mis-
the total paid in that year to the
owners of American railroad property
932 millions. Nine hundred thirty
millions paid in one year to the
owners of the American railroads in
return for their bare ownership!
STILL" cry the friends of the rail-
roads, don't forget that only two
thirds Of the roalroad stocks pay
dividends.'
Stock Only Grain Water"
The stocks Of the railroads are di-
Vlded into two classes-"preferre
and common" At the present time,
tor each dollar of preferred. there
are about six dollars of common.
People who know railroad history in
the United States tell us that the
great bulk of railroad common stock
represented originally good WILL"
future earning power" "confi-
dence" and "hope"-in short, it was
good oldfashioned financial rain
water.
People knew this only too we'll a
lew years back. In 1898 Ga fairly
prosperous year) less than two-fifths
OF the railroad stock pai.. any divi-
:. dends and these averaged only S per
cent. What did this mean? Simply
that the future hopes for railroad
stocks wee far from realization, even
IN a good year of the early nineties.
Then came the lean years, 1895, 1896
and 1897, during which less than
three-tenths of the railroad stocks
paid dividends. They have done
better ever since,
Tide Turned in 1897.
The tide turned in 1897. BY 1901,
more than half of the stock were
paying dividends, averaging S per
cent. Today two-thirds of the stocks
are paying dividends.
The "confidence" has been justi.
fed; the hope realized. The av-
erage dividend on the dividend paw.
ing stock is per cent; on all the
stock the dividend equals per cent
The American people are payins
the owners of American railroads
SlOO,O0O for each hour of every t]:,
iii the 365; 100000 for each
working day; nearly - billion q year
In interest and dividends-payine
them merely because they are owner:
and the railroads are shedding
crocodile tears over their poverty.
Solomon, in all his glory, askins
aims; Dives, soliciting a. copper
from the chance passer-by, would mo-
have been more laughable, or more
disgusting, either, than the railroad.
of the United States. with nearly q
billion year in interest and divi.
,dends, pleading their princely Dow.
erty to credulous pubic. i