Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1919-08-13
plumb ALLEGES
RAILROADS HAVE
WATERED STOCKS
Attorney for Brotherhoods As
SertS Extravaganza Under
Government Was for Pur-
pose of Creating Prejudice,
nr MORNING JOURNAL SPECIAL rr.srO wr..,

Washington, Aug. 12.--Charges that
eighteen representative railroads OPP
Grating in all parts of the United
States gave away stock bonuses ag-
gregating $450.414.O00 from 1900 to
1910 and have paid millions in divi-
dends on these bonuses were made
before the house interstate commerce
committee by Glenn E. Plumb of Chi
cago, author of the Plumb plan for
tri- partite control of the roads.
Mr.. Plumb charged further that
these railroads. which have so in
creased their property investment ac-
count at the expense of the public,
are now controlled in whole or in
part by the Morgan interests, the
Rockefeller interests and the Gould
| interests"
| ION behalf of all of the employees
of these systems of transportation and
the public" said Mr.. Plumb, 1--WE de-
mand that congress shall make a
| thorough investigation of the charges
herein set forth so that the American
people may know to what extent it Is
sought to subject them to exploitation
under the plans proposed to this COM
mittee of congress, plans which would
1
on the now unlawful aggregate prop
erty investment accounts of these
systems"
| Makes Specific Charges.
Specifically. Mr.. Plumb charged
that the Chicago, Burlington &
Quincy, the Chicago, Milwaukee & St.
Paul, the Chicago Northwestern, the
Great Northern. the Illinois Central
and the Southern Pacific railroads
gave away ~ bonuses to their stock
holders more than $250.000,000 dur
ing the ten year period mentioned, and
that the actual dividend disburse-
ments on this excess capital for the
year 1913 alone amounted to more
than $11,000,00O."
He alleged also that the Pennsyl-
vania. Baltimore & Ohio, New York,
New Haven & Hartford, New York
Central & Hudson River railroad,
Boston & Maine and the Delaware &
Hudson company ISSUED new stock
for $101. 100000 less than its market
value, or gave away this enormous
amount in bonuses to stockholders, u
and that the dividends paid on these
fictitious stock issues in 1913 alone
amounted to over $4,317,000.
Chairman Esch said after the
statement that some of the charges
had been covered in previous investi-
cations. He did not indicate whether
the committee would ask congress to
make an investigation.
Eleven Separate Charges.
Plumbs statement to the commit
tee embraced eleven separate charges
The first was that the nearly COM
pleted survey of the entire transport
tation system contained in the reports
of the valuation division of the Inter.
state Commerce Commission showed
that the actual cost of reproduction
new, was but so per cent of the ag
gregate property investment account!
of the railroads.
Another charge was that the cost Of
reproduction new Appropriated il
amount the investment account a:
stated to the commission by the car
rier it would be found in most in
stances that this approximation wa.
because vast surplus earnings hat
been expended on or ploughed int
the property in such way that the
! actual cash investment including the
) surplus earnings had brought thu
5 level of cost of reproduction new VI
, to the property investment account.
PayrolIs Purposely Increased.
, Investigation of recent statemen
I by President Underwood of the Fri,
: railroad, that payroll expenses of thu
t railroad should be increased undel
: federal control to build UP a politica
8 machine, would show, Plumb said
: that If there had been wastefulnes
( of money in swelling payrolls 'it ha(
: been at the instance of railway man
2 agements to make the expense ac
l count under government control ap
pear extravagant and wasteful."
Plumb also charged that when tn
roads were taken over by the govern
8 ment they were in such depleted con
Y dition as to maintenance and repair
. that 1t had required hundreds o
D millions of dollars advanced by tn
e government to place them in effectiv
!, operating condition"
9 another charge was that in max
s ing expenditures "the railroads oper
n ated and controlled by men under tn
e influence of Wall street directorates,
/, spent vast sums in unusual expendi
: lures for maintenance and supplies t
n place the properties in perfect operat
d ing conditions against the time o
e their return to private ownership.
n Alleges Big Land Grabs.
s IT charge" continued Plumb, "tha
f the records disclose that an area o
It land exceeding 296.S75 square mile
Z has been given by the United State
government and the various states
/. our railroads to aid in the construc
ton of our national highways" add
\ ing that 1.-The value of the grants S
made has either been appropriated
the private property of the railwa
promoters or they have been capital
lied as a part of the valUe of thes
properties upon which the grantee
now demand of this congress the RICH
to exact returns from the public"