1910. 
THE RURAL NEW-YORKER 
103 
FIGURES OF THE RAILROADS. 
When the railroads planned to increase their rates 
last year a so-called “Freight Rate Primer” was is¬ 
sued. This contained a number of statements which 
were intended to show that the American railroad 
men are great public benefactors. Here is one of 
these statements with comments by The R. N.-Y.: 
There has been much wild talk as to the over-capital¬ 
ization of our railroads. The census reports on the com¬ 
mercial value of the railroads of the country, together 
with the reports made to the Interstate Commerce Com¬ 
mission, tend to show that, as a whole, the railroad prop¬ 
erty of the country is worth as much as the securities 
representing it, and that, in the concensus of opinion ot 
investors, the total value of stock and bonds is greater 
than their total face value, notwithstanding the “water'’ 
that has been injected in particular places. The huge 
value of terminals, the immense expenditures in recent 
vears in double-tracking and improving grades, roadbeds 
and structures, have brought the total investments to a 
point where the opinion that the “real - ’ value is greater 
than the “face"’ value is probably true.” 
What is the face value of railroad securities in the 
United States? The Interstate Commerce Commission 
report last published, that for the year 1007, shows 
the following figures: 
Stock securities . $7,356,681,691 
Bond securities .• S,725,284,992 
Total .$16,0S2,146,683 
In round numbers the railroad se¬ 
curities of the country to-day are six¬ 
teen billion dollars, about equally div¬ 
ided between the stocks and bonds. The 
bonds alone probably represent the cost 
of the roads. It has been a well-settled 
principle among railroad incorporators 
that no larger assessments should be 
made upon the stockholders than is 
necessary to float the company’s bonds. 
A company, for instance, is organized 
with a capital stock of, say, $1,000,000. 
Five per cent of this sum, or $50,000, is 
paid in to defray preliminary expenses. 
The road is then bonded for perhaps 
$2,000,000, but as the bonds are sold for 
only 80 per cent of their face value, 
and as the incorporators allow them¬ 
selves five per cent for the negotiation 
of the bonds, only $1,500,000 is realized 
for the construction of the road. The 
incorporators now vote themselves a 
contract to construct the road for 
$1,500,000, and at once sublet to a con¬ 
tractor who is ready and anxious to con¬ 
struct the road for $1,200,000. The in¬ 
corporators thus realize $1,000,000 worth 
of stock, a portion of which is unloaded upon unsophis¬ 
ticated investors, and $300,000 in cash at an outlay of 
$50,000; and the road, which cost $1,200,000, is made to 
pay interest and dividends on a total capital of $3,000,- 
000 , and this is subsequently watered indefinitely if the 
road proves profitable, or a consolidation with some 
other road justifies the belief that its earning capa¬ 
city might be increased. Nor is this an overdrawn 
picture. On the contrary, instances might be cited 
where only one-half of one per cent of the company’s 
stock was paid in by the shareholders. 
The Interstate Commerce Commission, in its de¬ 
cision in the Danville case, said of the $120,000,000 of 
common stock of the Southern Railway: “This common 
stock was issued as a part of a reorganization scheme 
under which the Southern Railway Company came 
into existence. It does not appear that the persons 
to whom this stock was originally issued ever paid 
one dollar in actual value for it. It simply appears 
that the stock is outstanding.” 
At the time of the reorganization of the Atchison, 
Topeka & Santa Fe Railroad Company, in 1896, 
$102,000,000 of common stock realized ten dollars per 
share of the par value of $100, there being paid into 
the treasury of the new company only $10,200,000 in 
exchange for $102,000,000 of stock. Therefore $91,- 
800.000 of this stock was pure water. 
The Moore Brothers and their friends, after secur¬ 
ing control of the Rock Island system, increased its 
capitalization from $70,000,000 to $189,000,000 and did 
not add one single dollar of value to the property. 
Through the legerdemain of “high finance” this syn¬ 
dicate watered the capital of the Rock Island road in 
the enormous sum of $119,000,000, and now claims 
it has the right to charge such freight and passenger 
tolls as will force the public to pay dividends upon 
that amount of fictitious capital. The amount of 
water in the New York Central, Erie, and Reading 
companies is variously estimated at from $200,000,000 
to $300,000,000. 
Only recently the Alton Railroad securities were 
increased by $S0,000,000. Of this amount only $22,500,- 
000 , according to Mr. Harriman’s own testimony, was 
incurred for betterments or extensions of the road. 
The attorney-general of Illinois said: “Over $57,- 
000,000 of this indebtedness, created by this syndicate 
upon the properties of these companies, was not cre¬ 
ated in furtherance of any legitimate purpose, for 
which a railroad is, or can be, organized under the 
statutes of Illinois.” 
Thomas F. Ryan, in his testimony, published April 
BRINGING! HOME TIIE HUMUS. Fig. 37. 
24, 1908, made the startling statement that 95 per cent 
of the stock of all the railroads of the United States 
is “water,” and has only a bare percentage of intrinsic 
value. He says: “Ninety-five per cent of the stock 
of all railroads of this country never cost a dollar.” 
THE HEAD OF THE FARM HERD. Fig. 38. 
What about the “huge value of terminals” going to 
make up the value of railroads? In the Spokane 
Rate Case the value of the Northern Pacific Company 
was stated as $350,000,000. Of this amount $107,- 
000 ,000, almost one-third of the total value, is set down 
UNTO THE FOURTH GENER ATION. Fig. 39. 
for right of way. Much of this right of way was 
given to the Northern Pacific originally by the Gov¬ 
ernment and by individuals. A considerable part was 
acquired at large expense, but still the. cost was but 
a small fraction of the value given to it by the com¬ 
pany. Should the public pay rates based on this 
enormous value? The terminals in Spokane, Wash., 
are located mainly on the right of way of the rail¬ 
way, and cost the railway nothing whatever, being a 
donation from the city and yet they are extended in 
their estimate of value at $7,000,000, and the people 
of Spokane are paying rates based partly on this gift 
of property to the railway. 
A considerable portion of its terminal property in 
Seattle, Wash., has been purchased within the last 
seven or eight years, but the prices paid for this were 
nothing like the values placed upon it in the Spokane 
hearing. Some of the terminal lands they placed at 
600 per cent above their cost eight years before. 
Whatever may be true to-day, in the near future the 
structures of the railways of this country will be less 
in value than the land upon which the stand, esti¬ 
mated as the value of the right of way and terminals 
in this case. Whether, under the laws and constitu¬ 
tion of this country, our railroads can demand a 
return not -only on the money which has been ac¬ 
tually invested in these properties, but also upon this 
value, which has grown from almost nothing to vast 
proportions without the expenditure of money or the 
assumption of risk, is a question of tremendous im¬ 
portance. 
GOATS FOR THE DAIRY. 
As you appear to be somewhat interested in the 
goat problem, I send you a photo¬ 
graph of one of our goats, Fig. 36. It 
is now five years old, brown in color, 
hornless and gives when fresh, 3 ]A 
quarts of milk. Milk was tested by the 
Goat Breeders’ Association and tested 
5.8 per cent butter fat, with 15.46 per 
cent solids. She comes from some im¬ 
ported stock, but what breed, we cannot 
find out. A Swiss family brought over 
a herd of six, lived here on Long Island 
a few years, and then went back home 
and gave the herd to a German woman, 
and from htr Jenny was bought. Be¬ 
sides her we have another goat, black 
and hornless, showing traits of Spanish 
blood, also a three-quart milker; then 
one of Jenny’s kids by a part Toggen- 
burg buck, nine months old, not yet in 
milk, but giving fair promise of becom¬ 
ing a big. milker, and a hornless brown 
buck, sired by the black goat alluded to 
above. 
With another good milking doe, if 
rightly managed, it would be an easy 
matter to produce four to five quarts of 
milk the year round. Jenny gave steadily 
three quarts of milk per day, for over six 
months, and as people are slowly commencing to 
find out that goats’ milk is not to be despised, 15 
cents a quart can easily be realized for same, 
especially near the big city. As to cost of Winter 
keep of above herd, the first week in October a half 
ton of wild hay was bought at 30 cents a hundred, 
supplemented with about 500 pounds of hay cut on the 
place. They are fed morning and evening hay, so 
much that they will not eat it clean. Generally the 
weeds and herbs are picked out first, and the other 
grasses left, and with such wasteful feeding, the hay 
will last till grass grows. At noon time two large 
beets (table, not mangel) supplemented with a few 
potatoes, apple or other vegetable peelings, are all 
they will clean up and with that food they are in 
good flesh and looking fine. When fresh, they are 
fed, mornings and evenings a pint of bran and 
cornmeal; that is all they will clean up, and if given 
more, they will only waste it; 100 pounds bran and 
100 of cornmeal will last five months. So you see, 
the keep of a small herd is really insignificant. What 
doe kids are born will easily bring here on Long 
Island $5 apiece, at eight weeks old, and all buck kids 
that cannot be sold give a fine carcass of lamb(?). 
So the goat question for us, sums up this way: 
Cheap milk, cheap cream cheese of extra fine quality, 
a few carcasses of meat, some butter, and last but 
not least, a nice porker for Winter killing. 
Long Island. _ c. b. d. 
We have received over 50 letters from people who 
want to know where they can buy Alfalfa hay. It 
is almost impossible to obtain it in bales. Eastern 
farmers who grow Alfalfa seem to think they would 
about as soon sell manure as to let the Alfalfa leave 
their farms. In the West a great business in cutting 
and grinding Alfalfa has been developed and some of 
this Alfalfa meal comes East. It is mixed with 
ground grain and sold at such a high price that the 
buyer usually pays about $25 a ton for it in this 
form. In the section around Syracuse, N. Y., much 
Alfalfa is grown, and in spite of the great, quantities 
fed on the farms, about 100 carloads of baled Alfalfa 
were shipped away last season. It is now practi¬ 
cally all sold, though the demand is greater than ever. 
No man need fear that he can raise too much Alfalfa. 
It would be one of the surest crops for sale. 
