478 POPULAR SCIENCE MONTHLY. 



" It is claimed that tlie power of taxation Is one of the sover- 

 eign powers of the State necessary to its continued existence, and 

 that it was never contemplated, when the people through their 

 Constitutions delegated to their representatives in Legislature as- 

 sembled the power to make laws for the good of the people of the 

 State, that this grant of legislative power carried with it the right 

 to barter away with private corporations one of the essential pre- 

 rogatives of the Government, the very life-blood of the State." * 



How one of the States of the Union Connecticut has recent- 

 ly thrown away valuable public franchises is thus graphically 

 described by one of the leading and authoritative newspapers of 

 New England i. e., the Springfield Republican. We have here 

 the astonishing fact that over seventy per cent of the stock cap- 

 ital of twenty-six monopoly electric or " trolley " companies oper- 

 ated in that State has been issued for something other than money, 

 (cash) paid in, and hence may be said to represent nothing but 

 what is popularly characterized as " water." The bonded debt of 

 these roads amounts to 68,690,100, or over three times the amount 

 of their cash stock i. e., $2,671,240. This bonded debt, standing 

 in comparison with a total stock issue, strikingly illustrates what 

 has taken place : first, a gratuitous grant or franchise ; second, an 

 issue of bonds thereon to build the roads ; third, a share capital, 

 the product of the printing press, and representing no value what- 

 ever except as an instrumentality for obtaining extra profits and 

 exceptional legislation through its distribution. 



" This watered capitalization will iu time, of course, pass into 

 innocent hands, and the ' rights ' of the monopolies in the matter 

 of charges will all be gauged by the yearly revenue in its relation 

 to this totality of nominal capital. The stock waterers will have 

 sold their water at handsome figures and made off, and the pur- 

 chasers of the water must henceforward, of course, be considered 

 legitimate investors whose holdings are entitled to full considera- 

 tion ; and only until monopoly charges sufiice to pay eight and 

 ten per cent on all capital, watered or otherwise, will it be safe 

 for any community to demand a reduction of charges without 

 bringing upon itself the charge of being favorable to anarchy and 

 confiscation. 



"The people of Connecticut are preparing the way to pay 

 handsomely for their electric transportation. The penalty of 

 present neglect to guard and restrict closely the capitalization of 

 these monopolies will fall in ugly force upon this and future gen- 

 erations; and when the time is ripe for municipal or State as- 

 sumption of the monopolies, as may some time happen, the people 



* Burroughs On Taxation, from which authority the writer is mainly indebted in his 

 presentation of this important subject. 



