74 HISTORY OF THE GRANGE MOVEMENT; OR, 



has never been invested or profits on stocks fictitiously 

 issued for the benefit of speculators. It is on this 

 ground that farmers can make their best fight, and if 

 they keep close to this line of battle they will be certain 

 of victory. 



" We have no means of knowing what proportion of 

 the capital stock of the railroads of this country is ficti- 

 tious. An estimate made some two years ago placed it 

 at 33 per cent, of the aggregate railroad stocks. The 

 proportion is certainly not less to-day, and probably is 

 much larger. If this be true then the average railroad 

 rates are 33 per cent, higher than they would-be if the 

 railroad stocks of the country represented the capital 

 actually invested in constructing and operating them. 

 It is the work of the people to ascertain the precise dif- 

 ference between the actual investments and the fictitious 

 stocks, and when this shall have been done there will 

 be a solid basis for determining what reasonable rates 

 are. 



" The way and means adopted for creating fictitious 

 railroad stocks are at once numerous and ingenious. A 

 popular method is to declare stock dividends. If the 

 Rock Island road, for instance, is earning more money 

 than it cares to have the people know of, it declares a 

 stock dividend. The capital stock is thereby increased 

 and the earnings appear to be less. The fact is, that a 

 means has been provided whereby the earnings may be 

 increased without arousing the suspicion of the public. 

 The new stock represents no investments of capital 

 whatever, but thenceforth it constitutes a basis on which 

 the railroads claim the right of earning the current rate 

 of interest. The rates of transportation are thus in- 

 creased to pay interest on stock originally issued for the 



