Elbert County tribune and Elbert County banner., 1921-05-13
GRAFT OF THE RAILROADS

A favorite thieving device Is the
watering OF railroad company stock
Every worker should know how this
chicanery is operated. Let us explain
II briefly. Suppose. for instance,
certain railroad is capitalized ut
s1OO,0 100000. To water its stock
the controlling capitalists on the
pretext of Improving che property
issue, say. another sf00,o0o,00o OF
stock thus the burden of the in
dustery is doubled. Thereafter IT
has to pay dividends upon $780,
600, 900 instead of s10o,0oo,ooo.,
The advantages to the crooks en-
cheering the hocus-pocus are many
Fer one thing they are enabled TO
steal scores of millions at a blow;
and another is that the resultant
cutting OF the dividend rate (Which
in the Gaze cited would be SO per
cent? puts the road in the position
OF being poverty-stricken and furn-
ishes an excellent excuse for beat
ing down wages and screwing up
passenger and freight rates When
however, through wagecutting, rate
raising and the natural increase in
buginess. the dividend rate rises On
the watered stock, then the crooks
inject more water and the whole
process is gone over again.
BY means of this watered stock
swindle every railroad system in the
United States has been used as an
instrument of extortion and robbery
Dozens of railroads have had their
equipment ruined and themselves
thrown into bankruptcy because OF
It. AT hearing few years ago
In connection with the hnanclai
wrecking of the Rock Island 1t was
found that the Moore and Reid NJ
terests had poured sS50,0oO,0Oo- Of
watered stock into the original cap
,taIization of s75,O0O.0o0. 1t IVES
more than the road could stand ana
II went under. In 1907 according
10 G. e. Russell, of the s40s,s46,S45
Capitalization of the Network CEN
trail. at the verY least s175, 0Oo,ooo
was nothing Dul Matei.
Nv watered stock and other CROP
ked schemes the infamous Credit
Mobilier gang ruined the Union Pa
ciec Then. when everyone thot
1t had been bled to death, Russeil
Sage and Jay Gould came along ana
stole another s1Oo,Ooo,000 from IT,
Later, Standard Oil. operating thru
Hartman. got the read and is now
exploiting it more vigorously 'hah
ever. Up to 1908 the Great NORTH
ern clique. grace to their various
land -grabbings and stock-waterihsp'
had taken in profits from that ricn
property and had values In sight u
tho enormous amount of 81 w.
s21 Investigating the New AorK'
Nav Haven & Hartford, which haa
collapsed financially, the Interstate
Commerce Commission found ,ha'
the bandits owning that concern mad
increased it's capital stock htteeh
hundred per cent in eight years, ana
had pocketed almost. all OF the
money.
The general result of the stock
watering, continual over many yea. D.
has been to enormously oyer-cap't-
i;ze the railroad industry. MANY
experts declare that all the ran
roads in the United States could DC
rep,aced for ten billion dollars bu'
the companies have them eapi'ai
,zed at nineteen billion, and ihsis
upou returns on that basis A"'
the powers that be are QUICK 70 re
coenize their claims. the ih,e'
stata Commerce Commission is NJ
ways very obliging in the matter >
rates. And the government doe
what it can, too. The INFAMOUS
Esch- Cummins law, which senate
LaFolette fittingly characterized a
marking the unconditional surreh
der of Congress to wall street.
guaranteed the railroads a return D
at least fve and one-haif per cen
on their. swollen capitalization dur
ing its term Under its provisions
the railroads were paid on the bash
of $40, 100000 year.or at the rat
of enough to rebuild all of them II
ten years Such price we are com
PEELED to pay for being dominated
and abused by our railroad autocrael
To share in theTgreat loot from
the railroads there were officially
listed on December al 1918, SAT
$50 stockholders But many o
this number are Implications, be
cause although one Individual may
hold stock in numerous companies
ha is ccunted senarately for eact