Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1921-04-25
M|l|IlSM.ANACEMENT|
OF RAILROADS
SNOW CHARGED
Union Men File Exhibit
!, Showing Payment Of Big
Bonuses to Stockholders

Chicago, April 25.-Financial mis-
management of American railways in
volvinR the dissipation of tremendous
sums In bonuses to stockholders, un-
necessary costs Of marketings securi-
ties. interest and dividends on excess
capitalization and other losses was
charged in an exhibit filed with the
Omitted States railroad labor board by
the railway unions and made public
yesterday.
History of Twenty Roads.
The exhibit took up the history Of
the twenty roads in an effort to show
ton during the period OF 191O-191s
~totaling $500, 10000 During this
time 1t was also claimed hat they is
sued bonuses or stock dividends
amounting to 1880 and
through other forms of financial mis-
management sustained losses amount
ing to S123,0oo, 900. In addition it
was claimed that thirteen representa-
I v roads, during the period referred
to. dissipated, through improper
methods of marketing their. securi-
ties. the sum of ~s51,456.S7s.
Disbursements of interest and divi-,
said, were now costing the st. Louis
and San Francisco $2,432,661 annual
ly; the Reading company, $3.50. 900;
III New York Central. $5.34s,O0o
and the Baltimore and Ohio $6s2,230.
The exhibit declared that since its or
ganization in 1869 the New York
Central had %disbursed in interest and
dividends on fictitious capitalization u
total of $685. 09. 900.
Big Bonuses.
During the period from 1910 to
1919, thirteen railroads gave away in
bonuse to stockholders the sum of
$27.546,051," according to the report.
Because of the magnitude of the
immense bonuses issued to their
stockholders in recent months by the
Chicago Burlington and Quincy, the
Southern Pacific company and the
Reading company. these roads merit
special consideration.
These bonuses include a stock
dividend of s%6o.ooo,ooo declared by
the Burlington in March 1921, a
bonus of $76.0O0.00O distributed to
Southern Pacific stockholders In con-
nection with the segregation of it's oil
properties in December. 1920, and a
gratuity of se3. 900, 900 issued to
stockholders of the Reading company
IN connection with the segregation of
its coal properties in March 1921.
During the brief period OF four
months, in other words. three COM
pantes a presented their stock
holders with bonuses amounting to
$160,590,000 or about 16 per cent of
h total net income which all rail-
roads r assumed to earn during the
present year. :
Extra Dividends.
TN addition to the SO dis
stpated, h Union Paci8c's extra divi-
dend disbursement of 81 1-2 per cent
on common stock in 1914 repre-
scented a special gift to the company's
stockholders of $64,71S,0OO, and the
Western Maryland in 1917 conferred
on Its stockholders in the form OF
less than their market value, a gratui.
ty Of ~$8,250,000. Thus a total OF
2 3s,65s.0 900 was dissipated during
the limited period, ~1914-1921 as a re.
suit Of these five episodes alone.
These figures are merely illustra.
tive Of the financial practices which
have affected the ability of the rail.
roads to pay reasonable rates of com
pensation to their employees. The fl
nancial explorations referred to arr
exclusive Of numerous other OK
cesses which are a matter of oficia
record. such as wrecking of the. New
Haven.
without extending the analysis
further the facts which have beer
cited Are sufficient to indicate the ex
tent to which the financial practices
Of the railroads have resulted in tn,
dissipation Of the of thes'
companies which would have bee,
amply sufficient under proper fnanci
nj management for the payment o
reasonable rates Of compensation tt
fhefr omnlovea"