The Elk Mountain pilot., 1922-05-04
PROFITS ON wATERED CAPITAL

and s5O.OOO,OOO.
PROFITS ON wATERED CAPITAL
DR.. Warne pointned out that per cent S1S,9O0,-
Commerce Commissions tentative val
uaton of the property of the railroad
sl134 100000 That the profit the railroads
authorized collect each year from those who
the roads.
1t is 100000 OF the received by
railroads during the period of control.
This rental the of the profits made by the
railroads during the three most of
1t high that Senator Cummins of Iowa
who be charged with hostility to the railroads.
said at shocked the moral sense Of mankind"
| Since the Commission placed the valuation of s1s,
the roads, it has been through its engineers
the of reproducing these properties
the basis Of time prices The work of valuation II
class railroads has been completed These roads have
book value of s1,520000000 but the Commissions en-
gneers report that they could be rebuilt and equipped
for ss77O00O00 tri6e than one-half the
amount upon which they claiming returns.
II the other railroads have been "watered" to the
same there ample evidence sustain that
heory-then the the railroads Of the Unit
ed States does not exceed sll,o00.OOOyOOO.
I That is about the price Wall Street places the
roads January 1922 every share Of and every
issued by railroad in the United States could
have been purchased at the prices quoted the New
York Exchange for s1064O 900
less than the tentative value placed the carriers by the
Interstate Commerce Commission.
In view of the foregoing DR.. Warne contended that
the first in railroad operation demanded by pub
lie policy the "un-watering" of the roads.
THIS WOULD EFFECT SAVING OF APPROXI-
y MATELY S4sO.OOO.OOO YEAR.
EXORBTTANT SUMS PAID FOR SUPPLIES
DR. Warne showed from the official records that the
paying extortonate prices for supplies of all
kinds and that these supplies purchased from inst
tutions which controlled by the financial in
that dominated the railroads In other words the
powerful fnancers milking the railroads through
o the supply houses
For example he showed. through the testimony Of
John SHELTON Williams Comptroller Of the Cur
that the Steel Corporation proteerng in rail-
supplies to the extent Of S35 a tor II that
'eak" had been stopped Dr. Wane said. the railroads
s would have saved S1sO.O00OO0 In 1890.
e The railroads coal bill increased per
1915 1920 going from 5000 100000 100000 The
railroad propaganss have had nothing say about this
because coal purchased from companies controlled by
the same interests that control the railroads.
Dr. Warne read into the record of evidence
showing the intimate relations between the railroads and
these coal mining companies One instance will suffice
The OGara Coal Company "n which the president of the
New York Central personally interested dscov
cred by the Interstate Commerce Commission be selling
coal to another railroad for much than
it charged the New York Central
THE fact is" said Interstate Commerce Commission
tha the connection of of the high officials
New York Central lines with these coal properties result
ed in small decentralization in the
belief on the part of minor officials that in permitting
these abuses to they promoting the
of their superior officers.
FAT CONTRACTS FOR "INSIDERS-
DR. Warne touched the deals between the railroads
e and the great equipment the Loco
motive Company, American Locomotive Company etc
u Testimony submitted to the Interstate Commerce Com
mission he said had proven beyond question that the
roads had paid these from as
much for repairing equipment work would have
cost In their shops. Millions had thrown away
d In this way
The roads were equally extravasannt in purchasing
new equipment. President Bddle of the St Louis and
San Francisco testifyng stated that his company had
bought freight locomotives in February 1916
I each Later in the year it compelled pay
$4,000 for the type of locomotive in February
of the following the price boosted S695O