90 STATE BOARD OF AGRICULTURE. 



action |100,000,000, Mr. Hill said in his examination before the com- 

 mission that the Burlington stock was worth what they paid. In 1897, 

 March 31, the stock of the Burlington was worth .|72 a share. Great 

 Northern was worth |120. Stock of the Great Northern is worth now 

 $180 a share. On that basis Burlington was never worth more than 

 $130. The point is this, stock is entitled to whatever dividend it can earn, 

 and you have put up against those corporations an obligation to pay 

 $200,000,000 at four per cent interest. Who buys one of those bonds 

 holds the obligation of those companies. Who bought a share of Bur- 

 lington stock bought it with notice of what its value had been and have 

 notice of what its value might be. 



Mr. Hill has organized a Northern Security Co., and he exchanges the 

 stock of the Northern Security Co. for Great Northern at 180 and for 

 Northern Pacilic at $100 a share. When Great Northern was worth $150, 

 Northern Pacific common sold for |23, and Northern Pacific preferred 

 sold for |G2. They now go in together and a common stock is taken out 

 on the basis I named. That transaction adds to the capitalization of 

 those companies $50,000,000, and this is what has been done. You have 

 throughout that whole territory eliminated competition. You have 

 increased the capital stock of those corporations $150,000,000. Now I 

 suppose you all know what $150,000,000 mean, but it does not mean 

 anything to me unless I can put it in concrete form. 



it cost to build the Great Northern road $08,000,000. This addition to 

 their capital stock is as much as it would cost to build and equip the 

 Great Northern and half another road just like it. What is the object, 

 the purpose of this combination? Mr. Harriman told his story, and Mr. 

 Hill told his story. These gentlemen say they have gone into this scheme 

 for the purpose of benefiting the NorthAvest, for the purpose of reducing 

 freight rates in the Northwest. That testimony was a revelation to me. 

 I supposed they had gone into that for what there was in it, but instead 

 they are broadminded philanthropists. 



While Mr. Carnegie has been traveling over this country establishing 

 libraries with the proceeds of steel (steal), these gentlemen with just as 

 great hearts have gone to work to reduce freight rates in the Northwest. 

 Business propositions should be discussed on a business basis. 



Of course you know, and I know, and everybody else knows that they 

 are in that thing to make money. How are they going to make money? 

 Going to develop traffic. If you take a half dozen railroads that are not 

 good for anything, put them together, make a great system of them, 

 furnish the money to put them in good physical condition, you benefit the 

 community. But that is not the condition of things at all. There was 

 the Great Northern, a complete system by itself, all the money it could 

 use, one of the finest roads on this continent. The Northern Pacific, a 

 great system by itself. Such men as Morgan with all the money it could 

 use back of it. How are you going to develop any country by combining 

 these roads? The chances are that there would be better service and 

 lower rates if those great systems were operated independently than if 

 they are operated together. 



Then what is the purpose, how do they make money and how can they 

 make money? There is only one way if the traffic is to be the same. The 

 revenues of those roads can onlv be increased bv charging more for 



