Denver labor bulletin., 1916-09-23
Princely Poverty
By SCOTT NEARING

The railroads 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, gingerly, hat extended,
and humble well conned story Of
''high labor costs" increasing operating
ratio," decreasing ne. earnings and
-'receiverships." Some of the ablest men
in the country make this plea. Per-
haps you believe it. Anyway, suppose
we look for a moment at the poverty a.
it really is.
More than nine hundred millions in
interest and dividends were paid by the
railroads to their bondholders and stock
holders in the last year for which the
interstate commerce commission has pub
lished complete figures-l9l4. Unoffi-
cial returns show for 1915 and 1915 even
higher dividend payments than those Of
l9l4.
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. The interest
paid on the bonds amounted to four
hundred and thirty-nine millions; the
dividends paid on the stocks were four
hundred and fifty-two millions, and be-
sides these payments there were forty
six millions in miscellaneous interest
payment, making the total paid in that
year to the owners of American railroad
property nine hundred and thirty-two
millions. Nine hundred and thirty mil
lions 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 railroad stocks pay dividends"
That is true-and interesting, too.
The stocks of the railroads are divided
into two oclasses-"preferrcd" and com
mon" At the present time for 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"
confidence" and ''hope'-in short IL was
good old fashioned financial rain wa
ter.
People knew this only too well few
years back. In 1892 IA fairly prosper
Gus year, less than two fifths Of the
railroad stocks paid any dividends and
these averaged only five per cent. What
did this meant Simply that the future
hopes for railroad stocks were far from
realization, even in n good year of the
early nineties Then came the lean
years, 1895, 1895 and 1897, during which
less than threc-tenths of the railroad
stocks paid dividends. They have done
better ever since.
The tide turned in 1897. By 1901.
more than half Of the stocks were pay
ing dividends, averaging five per cent.
Today two-thirds of the stocks arc pay
ing dividends.
The Confidence" has been justified:
the hope" realized The average divi-
dend on the dividend paying stock IL
eight per cent on all the stock the div
idend equals five per cent.
The American people arc paying the
owners Of American railroads hundred
thousand dollars for each hour Of every
day in the three hundred and sixty five:
three millions for each working day;
nearly billion a year. in interest and,
dividends-paying them merely because
they are owncrs-and the railroads are
shedding crocodile tears over their pow
erty. Solomon. in all his glory. asking
aims; Dives. soliciting n copper from the
chance passcr-by, would not have been
more Imaginable, or morc disgusting eth
er. than the railroads Of tho United
States, with nearly billion a year in
interest and dividends. pleading their
prinocly poverty TO n credulous public