The Connecticut labor news., 1921-10-28
RAILROAD STOCKS
 WORTHLESS, REPORT
 OFT. (. (: DISCLOSES
Final Value Placed on Corporations Makes No Allowance for Half
 Billion Securities.
Gv GLENN F.. PLUMB


 Washington Oct 28.--I have received from the Interstate Commerce Commits sion their final determination of value or some l50 railroads AftersOrting out all of those companies which had capital lia- biliticS of less than a million dollars there remain |l corporations whose CapI- tai obligations are in excess of a million dollars. From these reports l have tabu- lated the amount of capital stock issued and outstanding of each corporation, the amount of it's funded debt, the amount of its other liabilities, and the final value as fixed by the Interstate Commerce Commission.
 l find that these 71 corporations have issued capital stock of a par value of $544, ,580,00O, bonds of a par value of S844,377 ,0OO, and have incurred other in dcbtcdncss amounting to $131 ,086, ,000, makink a total liability on stocks, bonds and other forms of indebtedness, $1 ,52O,- 000000
 The final value of all of these proper ties as fixed by the Interstate Commerce Commission IS $S77, 100000. This would just pay their bonds at par and leave S230000 900 over with which to meet their other indebtedness of S131 100000, leav- ing nothing to represent the stock, except
  The total value fails to meet the bonds and other indebtedness by this amount.
 Value Half of Liabilities.
 The total value found to exist in these properties is but 58 per cent of the total liabilities of $1,52000O0 0OO. It is but @ per cent of the par value of the stocks and bonds, disregarding the other liabili- ties. i the same percentage were applied to the S20O0O,O00,O00 capital liabilities claimed by the railways, it would sub stantiate only $ll.600,O00000 of that total amount as being represented by as ccrtaincd value, if the 58 per cent be adopted as the test If 6 per cent be capitalization of $2O,OOOO 100000 would be represented by actual value.
 The railroads taken for this test are not hand picked. They are the mine run of the lot. They come from every part of the cOuntry-from Maine to Califor- nia, from Florida to the State of ash ingtonW. Those in the New England States are most COnservatively capital ized. Those in the South Atlantic States have values closely supporting their capi- tai liabilities. But in all of the rest of the country, the practices followed i'll the case of the Rock Island, which 1 dis Cussed in last weeks issue of Labor, seems to obtain, and properties have been capitalized for 40 per cent in excess of the actual values upon which the securi- ties must rest.
 1 find in these valuations further proof of my lott-repested assertion that at least $8,0OO,00O,0OO of the $2O,O00,OO0,0O0 railroad capitalization now out standing was not supported by an legitimate prop crty value.
 Stocks Are Entirely Water.
 These 71 corporations have capital stock of a par value of $544 100000, or upwards of a half billion dollars. Some of these stocks have real value behind them Others have less than nothing, but i'll fact, actual liabilities. If they were all consolidated in one system, the liabilities would exceed the values, and there would be nothing to support these stock securities. We have here only about 713 per cent of the total railway capital zatiOn of the country, and yet 1t would 00000O0 which the railroads are now asking Congress to grant them, to inject real value into the stocks of this 712 per cent of the total stock issues of the country
 If the people are to be asked to ap- propriatc out of the Treasury enough to restore the values" of all railroad stocks. 1t means that instead of $50000O,- GOO, we will eventually have to make gifts totaling some $8,000,000,0O0 if we are to ''preserve the credit of these fictitious securities.