30 IOWA DEPARTMENT OF AGRICULTURE. 



as ' 'watered stock," but this is not so. There has been some stock watering, 

 and some of it has been bad. The investing public has suffered by it more 

 than anyone else. But if the watering of stock is to be considered, it is only 

 fair to remember that the reverse process has frequently taken place. In 

 other words, the capital of many railway corporations represents less than 

 the actual money invested. Take, for example, the Burlington company. 

 Many miles of what now forms the Burlington railway were originally built, 

 proved unprofitable to the owners, went through a receivership, and were 

 finally bought at a greatly depreciated value, and put into the Burlington 

 System at this greatly reduced price. What is true of the Burlington is also 

 true of many other lines. The great Pennsylvania System and many other 

 great systems of the country have rebuilt and improved their lines without 

 equivalent addition to their capital account, so that their roads represent in 

 value more than the capital shown on the books, and so largely is this 

 so that our railroads in the United States show an average capitalization of 

 something like $65,000 per mile, although this represents, in many cases, 

 double track, three track and four track railroad, and this capitalization is 

 equal to about one fourth of the capitalization of most European roads. It 

 may be safely said that the few instances of stock watering, which I do not 

 pretend to defend, are insignificant as compared with the reverse condition, 

 about which the demagogue does not speak, and which as yet is not recog- 

 nized by any particular name or process . As against the railways which may 

 be earning covetously high rates of dividends, many railways can be cited 

 which pay no dividends whatever, and which have defaulted or are ready to 

 default upon their bonded indebtedness. 



Railway managers recognize that they are in the public eye. The courts 

 have repeatedly stated that while railways as capitalized in the United States 

 are private undertakings, they have public obligations, whch make them 

 Quasi-public , to use the legal phrase. Railway managers must expect criti- 

 cism, but the hardest criticism is that which comes from those who know 

 the least. We are all of us looking for criticisms and suggestions from those 

 who have really studied the question, and who know it. The difficulty is 

 that we have to take it very often from those who jump at conclusions with 

 very insufficient knowledge or data. 



' ' There is one feature of railway transportation which is of interest and 

 that is the effort that is being made to cheapen it, an effort which follows 

 along precisely the same lines which have been found necessary in ocean 

 transportation, river transportation, canal transportation, wagon transporta- 

 tion, namely; increasing the units of transportation, and efficiency of those 

 units." 



When I was a boy, the "Great Eastern" used to be spoken of as the 

 greatest ship that had ever been built; in fact, she was so much larger than 

 any ship then plying the ocean that she was considered unmanageable, and 

 it was supposed by many that her equal would never be built again. I pre- 

 sume there are today fifty to a hundred steamers entering the harbor at New 

 York which have very much greater carrying capacity than the ' ' Great 

 Eastern," and some of them considerably longer, as well as wider and 

 deeper. 



In order to reduce the cost of transportation on railways, it has been 

 necessary to reduce the gradients; to use larger locomotives, and make 



