ILLINOIS STATE DAIEYMEN'S ASSOCIATION. 61 



dividends becoming large, instead of making a just reduction to the public 

 in rates, the stock is doubled or largely increased, upon which dividends 

 are demanded ; and then if times change, business declines, and dividends 

 are reduced, it is proclaimed that railroads are a bad investment and do not 

 pay. Take for example a railroad with a nominal capital basis of sixty or 

 eighty thousand dollars per mile, which could be constructed and equipped 

 for half the sum in money fairly expended, is it right in equity that the 

 public should be compelled perpetually to pay dividends on the larger sum ? 

 For instance, the Nev^ York Central Railroad is said to have had, through 

 the watering process, a capital basis of more than twice its actual cost when 

 Commodore Vanderbilt obtained possession of it, and all know how he 

 added eight millions thereto from accumulated profits over dividends, which 

 was an amount legally perhaps, but not justly extorted from the public ; and 

 now it is expected that dividends will be perpetually paid on such a basis. 

 Though there may be no legal remedy, yet is there any justice in this ? 

 Our express companies are also drawing dividends to an enormous amount 

 on a like false basis. Now is there never to be any remedy for such 

 inequities ? Are we forever to pay many millions on purely imaginary 

 capital, merely because certain men were granted privileges based upon the 

 principle of mutual and equal benefit ? These are serious questions, demand- 

 ing not wild passionate action, not action outside the law and in violation 

 of just rights, but of calm, earnest discussion and consideration ; not to be 

 put down by the mere outcry of vested rights — which are rather clearly 

 vested wrongs — if vested at all. They may be legal, but surely not based 

 on any principle of reciprocal justice. But again I assume, not only that 

 compensation should equitably be only upon a fair amount of capital, fairly 

 invested, but that that capital should be fairly and economically managed. 

 ' What right has one corporation to ask the public to make good its 

 losses arising from its own wrong, its incompetent or corrupt management, 

 more than another, a railroad more than a manufacturing company, or an 

 individual ? Should not the loss justly fall upon the negligent stockholders ? 

 What would be thought of an individual or a bank that sought thus to 

 recoup for such losses ? 



Now we all know how much more easy it is to criticise than to do 

 better, to point out a wrong than to correct it, or even to show how it can 

 be corrected. And here, when we attempt to show how these necessities 

 of the public are to be secured and wrongs righted, we encounter these 

 difiiculties in their fullest jfiDrce. 



For years this railroad question has engaged the most careful attention 



