The people's voice. [volume] (Helena, Mont.) 1939-1969, 1940-03-27
By J. B. BENTLEY

|
In the March issue of the Survey
Graphic is an article written by Burton
X. Wheeler after four years as mem
Der of a Senate committee investigat.
ing the railroads. "By 1895, when the
Senate committee on interstate COM
merce began its railroad investiga-
ton, the government had poured more
than one billion dollars into the rail-
roads, yet nearly one-third of the rail-
road mileage in the country was in
receivership. Railroad employment
had declined from 1,770,O00 in 1929 to
$4,000 in 1886. (Survey Graphic, p.
| D." The article goes on to explain
that the waste of operating and main
| tanning the railroads is extravagant
and negligent and gambling in the
stock market resulted in big loss to
the railroads. "Stock market opera
lions alone have resulted in losses by
a few eastern railroads of one-third
of billion dollars. One of the big
gest eastern railroads bought the
shares of two other eastern railroads
and has seen its holdings shrink by
approximately $100,000,000 An asso-
ciated holding company paid nearly
seven and a half million dollars for
the stocks of three southern railroads
which bought stock of a competing
road and lost between forty and fifty
million. Nearly eighty-two million of
the assets of this railroad have evap-
cfA ahao A
third railroad paid more than twenty
four million for stocks of another rail-
road on the basis of current market |
value Less than five percent of this |
investment could be salvaged. 0bid. |
p 2, col u" Holding company con-
troll has sometimes led to unfortunate
impairment of railroads themselves
and Their credit. In 1880 one of the
largest railroad systems in the coun-
try, valued at more than two billion,
came under the control of a holding
closely associated with large
banking and brokerage firms. To
satisfy the holding company's need for
cash, payrolls were slashed and divi-
dends were increased A milking
process was applied to the various
roads within the system.
In the case of one subsidiary, forced |
dividend exceeded the amount of its
heavy layoffs by al
most 100000. AS a result of I'M
sound practice the system collapsed
and the principal railroad within the
system became hopelessly bankrupt
(Ibid p. 2, col. 81 Senator Wheeler
suggests that the government reorgan-
lie the railroads and leave them in
the hands of the present operators.
and still he is crying to the high
heavens that they were inefficient.
The following quotation was COM
piled about forty years ago and pub
ished by Senator Pettigrew, and if
anything the railroads have been CEN
cred more closely and are in fewer
lands since that time. 1.-THE Inter-
state Commerce Commission has just
sued a report showing that, out of
,27, $50 stockholders in various rail-
'oads of the United States, the ma
ority of the stock Is owned by only
',031 persons or 1.3 percent of all the
The commission, through
is bureau of statistics, has discovered :
hat out of total of 97,475,776 shares I
# all the railroads 50,873,322 shares !
re held by the small minority an I
verage of 6,130 shares each. The
alance of 46,602,45 shares is owned /
y 1929 stockholders, an average of 8
5 shares each. The S,031 stockhold- C
RS who own the majority of the stock
lcude holding companies of railroads 4
S well as other corporations. 1t also il
lcludes the stock held by voting trus- Il
ses and estates. The Interstate Com Il
lerce Commissions report distributes 8
lese holdings as follows: G
Held by other railway companies, c.
1898, 407 shares; held by other cor a
1rations or partners, 11,565,938 t.
lares; held by voting trustees, 5,307,
10 shares; held by estates, 1,333,961 A
lares; held by individuals (males), pi