162 THE PARMER AS A BUSINESS MAN. 



the outstanding stock represents a very large dividend upon 

 actual investment. Upon the outstanding bonds, interest to 

 the amount of $249,624,177 was paid. There were, however, 

 bonds to the amount of $515,029,668, upon which no interest 

 whatever was paid; upon 7.83 per cent of the total out- 

 standing bonds, three per cent was paid, which in all cases 

 doubtless indicates partial default. The bonds of a railroad 

 are supposed to represent actual investment, but do not always 

 do so. In some cases they represent, practically, " bonuses," 

 given to certain security liolders in the process of reorganiza- 

 tion, and in other cases exorbitant profits to constructors, often 

 obtained by collusion with officials supposed to guard the 

 interests of stockljolders. 



The above figures show that the question of" watered stock," 

 which so largely occupies the attention of farmers, is not a very 

 important one, the fact being that watered stock, except in the 

 case of old railroads in rich communities, seldom pays any 

 dividends. It is valuable, first, as a means of controlling the 

 properties by those who expect to make profit by their control, 

 and, secondly, upon the chance that it may sometime be made 

 to pay dividends. 



The people, in 1896, paid for transportation of persons and 

 freight the sum of $1,150,169,376, or about three and one-half 

 times as much as they paid for the support of the general 

 government, and over $100,000,000 more tiian the combined 

 federal, state, and local taxation in 1890. This great revenue 

 is best considered, when considering the subject from the 

 standpoint of the public, as a tax, levied by an assessment 

 upon the immediate beneficiaries, and by them passed on, so 

 far as possible, to the public at large, as other indirect taxes are 

 passed on. This makes clear the interest of the general public, 

 even although that term may include persons who never saw 

 a railroad. 



In their early history railroads were regarded as private 

 property, to bo. administered according to the will of their 

 owners, subject only to the provision of the common law that 

 as common carriers tlieir cliarges for service must be "reason- 

 able." It is obvious, however, tliat a road bed, constructed 



