MONOPOLY OF TRANSPORTATION. 589 



ment could refund the 6 per cent, bonds at 3 per cent, in 

 the interest of the people instead of in the interest of the 

 syndicate, as is proposed by Senator Hoar's scheme. 



* 'It will be impossible for Congress to shirk its full duty 

 in this matter now. The people are convinced of the 

 enormity of the swindle. A large portion of the stolen 

 property is in sight, and it can be restored to the rightful 

 owners if there are courage and honesty in our National 

 Legislature. ' J 



The history of the Credit Mobilier is instructive upon 

 another point. It presents to us a skillful and successful 

 instance of what is now a common practice with railroad 

 companies the fictitious increase or watering of the stock 

 of the company. 



Stock watering has become so common among cor- 

 porations of all kinds, and has been attended with such 

 success that it has, among many persons, become regarded 

 as a legitimate transaction. 



A competent writer has defined the practice as (< the 

 re-appraisal by its owners of a corporate property which 

 has, or is alleged to have, increased on their hands, without 

 any new outlay, and the issue to themselves of new evi- 

 dences of value equal to such supposed increase, ' ' or more 

 properly, the increase of the stock of a corporation at the 

 expense of the public, and for the purpose of earning divi- 

 dends on money never invested. 



By way of illustration, a railroad company builds and 

 equips a road at a cost of $6,000,000, which is represented 

 by 60,000 shares at $100 each. 



We will suppose the profits of the road will enable them 

 to declare a dividend of thirty per cent, per annum. 



This enormous profit on the investment the public 

 would not permit, but would, perhaps, by law, regulate 

 charges of transportation, reducing them to a liberal and 

 just basis. The corporations, anticipating this, proceed to 



