THE FARMER'S WAR AGAINST MONOPOLIES. 75 



purpose of covering up excessive earnings. Another 

 favorite way of issuing fictitious stock is by the leasing 

 of other railroads. But the most common means of 

 obtaining fictitious stock is by what is known as the 

 Credit Mobilier plan of building railroads. Starting 

 with a land grant from Congress, or subsidies from State 

 or municipal governments, the construction company 

 issues sufficient bonds to cover the cost of building the 

 road, outside of all shrinkage from depreciation, brokers' 

 commissions, etc. These bonds are sold, and the road 

 is built and equipped from the proceeds. The construc- 

 tion company then have the capital stock of the road 

 intact. Whether it be $1,000,000 or $10,000,000, it 

 has not cost them one dollar. They then commence 

 operating the road, and claim that it should not only 

 earn money to pay the interest on the bonds, but also 

 enough to pay dividends on capital stock that does not 

 represent a single dollar of actual investment. The 

 cost of the road is entirely comprised in the bonds that 

 have been issued, and the capital stock is altogether fic- 

 titious. How large a proportion of the 63,000 miles 

 of railroads in the United States has been constructed 

 in this way, it is not possible to say. But the time has 

 come when the people will undertake to find out. The 

 people are willing that the railroads shall earn a fair 

 profit on actual cost, but they can no longer be forced 

 to pay a royalty on fraudulent issues. That time has 

 passed, and the sooner the railroads make up their 

 minds to it the better it will be for them." 



