THE FARMER, THE INVESTOR AND THE RAILWAY. 41 



;K)0, which, with other enormous additions to tlie li;ilnlities, sire to bean endless burden 

 upon railway users and the warrant Cor the exaction ol' unjust tolls. 



The Santa Fe's recently acquired control of the St. Louis & San Franii.-iv' lines-- 

 which are to he operated as a distinct properly— is a remarkable instance of the lial pi..- 

 oess of multiplying securities without tlie addition of a dollar's worth to the world's 

 (took of property. 



The St. Louis & San Francisco controlled 1,329* miles of railway, capitalized for 

 the enormous sum of ?70,402,800, being $52,200 per mile. The Santa Fe acquired control 

 of this property by issuing $::6,lS5,175 of new Santa Fe stock, not to retire the stock of 

 the "Frisco," but to buy it and place it in the treasury of tlie Santa Fe and applyt such 

 .lividends as may accrue to the payment of current Santa Fe liabilities. 



The result to the railway user will be that, whereas the "Frisco" property has been 

 represented by ?70, 402,800 of "Frisco" and auxiliary stocks and bonds, it is now repre- 

 sented by that sum plus $26,285 175 of Santa Fe stock, which is an addition of fictitious 

 capital upon which the user is expected to furnisli revenue, and the owners of Santa Fe 

 shares have that amount of water iujected into their holdings. 



tThe Santa Fe holds 741,129i shares, of the par value of $73,112,950, of stock of 

 auxiliary lines built wholly from land grants, municipal aid, and proceeds of bonds sold, 

 and for this immense number of shares the only consideration — as shown by the Santa 

 Fe ledger— was |4,0::i), or a fraction over half of one cent a share. For 663,300* of these 

 shares, of the par value of $66,330,650, the only consideration shown is $15.00, being at 

 the rate of 44.22 shares of the par value of $4,422.00 for one cent. Such is the stuff 

 which passes current as railway securities and ou which the railway user is taxed to pay 

 dividends. 



The Santa Fe aflords a most instructive example of what may be accomplished in 

 the way of multiplying securities by the hoodooing? of accounts, by reckless construc- 

 tion, the payment of stock dividends ($18,000,000), the giving of vast quantities of stock 

 to the purchases of bonds, the payment of unearned dividends and the creation of $100,- 

 000,000 and more of fiat securities at one or two sittings. 



The seventy miles of the Columbus & Cincinnati Midland, built at a cost of about 

 $17,000 per mile— of which some $1,500 per mile was donated by the people along its line 

 — is capitalized at $57,000 per mile and earns nearly twelve per cent, on the money fur- 

 nished by its builders, yet appears to earn but three per cent., while in its immense 

 fictitious capital the foundation is laid for further exactions. 



The enormous profits accruing from the operation of the construction company, 

 and the unjust tax thereby forever imposed upon the public, is exemplified in the case of 

 the "Credit Mobilier" and other construction devices connected with the building of the 

 various Pacific lines, out of which grew no little corruption of legislators, the ruiu, po- 

 litically, of promising statesmen, and the amassing of so many great fortunes, typified in 

 the case of the four meu who built the Central Pacific and whose united worldly posses- 

 sions in 1860 are said tohave been but .•t;120,000. Now, however, their estates are estimated 

 at more than $120,000,000. 



Mr. Poor states that "the cost per mile of the roads making returns (1888) as meas- 

 ured by the amount of their stocks and indebtedness equaled nearly $60,732 as against 

 $58,603 for 1SS7," being an increase of .'?2,129 per mile, and at the price recently prevailing, 

 it would require 135,000,000 bushels of the farmers' corn annually to pay o per cent. <>n 

 the water absorbed by railway securities in one year, and by such waterings yearly itwill 

 take but fourteen years to absorb the entire corn crop to provide revenue ou the added 

 fluid. How long shall this process be permitted to continue? 



Mr. Poor also states that, in the eleven central farming States, railway earnings 

 have in eighteen years increased 175 per cent; yet he forgets to tell us that such has been 

 the shrinkage in the prices of farm products that the value of the wheat and corn crops 

 in these States increased but 57 per cent., showing conclusively that the railways are 



•Incluilesuch lines .as the Kan.sas Midland, etc., built at costs ranging from $10,000 to 813,000 per mile. 

 tKinaiicial Chronicle of jMay ai, leso. 

 Jl'oor's Manual , 18BU, page 7;3. 

 gAnie, pu^ea. 



