Newspaper Page Text
I
RAILROAD STOCKS SUPPORTED
BY GOOD AND TANGIBLE ASSETS;
REPRESENT ACTUAL VALUES
In reply to the Indictment to often
made against railroads In halls of leg-
JslaUon and by public speakers and the
vress that the watering of tlielr stocks
out of all proportion to their actual
rnlno Is responsible for burdensome
charges upon the people, the neglect of
rolling stork and equipment, resulting
In the delay of freights and the de
moralization of schedules, the follow
lng defense, prepared by a staff con'
trlbutor and printed In The Railway
World Is Interesting ns affording a fair
Idea of the "other side" dt the question:
Talk of "Water” Flippant.
People talk as glibly about water In
railroad stocks as they do about a river
overflowing Its banks during a Jan
uary thaw, and no doubt many persons,
on account of their talkative habits,
have come actually to believe that
what they say of railroad stocks Is llt-
i erally true. No distinction Is made;
' all railroads shares are put In the same
class by the unthinking public. This
flippant talk, however, Is causing other
and wiser persons to ask themselves
what constitutes water In stocks, and
the more they reflect upon the Inquiry
the farther they appear to be from a
satisfactory answer. A company may
be operated for years without paying
anything to Its shareholders In the way
of dividends. Yeah after year earnings
are appropriated for Improvement^ for
second and third tracks, for better ter-
I mlnals, for equipment. In fact for the
thousand and one requirements of a
railroad whose management has a
care for Its condition In order that It
inny fulfil Its obligations to the pub-
.1 lie.
■4, At length as a partial restitution to
■ the shareholders they are given a cer-
■ ' tain proportion of new shares without
■ coat. Is the new Issue water? The
W public will say It Is, but the sharehold-
I era who have received not a penny of
’ Income upon their Investment will say
no. The shareholders will assert that
for every dollar of new stock Issued
there has been put Into their property
out of the earnings three or four dol
lars, that there Is good value In tho
way of tangible assets back of every
share Issued which represents new
capital just as much as If the share-
. holders hod gone down Into their pock-
etc to produce the money required for
the Improvements. Thus It is that the
new shares represent an actual Invest
ment of capital or a large quantity of
aqua pura, Just according to the point
of view.
Investor Worthy of His Income.
Just as the laborer is worthy of his
hire so is the Investor worthy of an
Income upon his Investment. Having
been deprived of the Income to which
he Is entitled. In order that tho public
may be benefited through a diversion
of earnings to tkii Improvement of the
properly. It follows that the Investor
is entitled to be made whole In some
mnnner. The simplest way to accom
plish this Is by an lasue of stock which
Is distributed pro rata among the
shareholders without cost. When In
future years the company has pros
pered so that It may pay dividends
the new shares Issued In the above
manner are Just as much entitled to
receive dividends as art the original
i shares for the reason that the new
i shares represent capital 'actually ln-
1 vested »
y An old method of "watering" stock,
not much In vogue now If at all In the
financing of railroads, was te Issue
shares as a bonus to aid the sale of
bonds. In those days railroads were
built out of the proceeds of bond sales
and It was due largely to this fact that
manv railroads had to be reorganized.
As an example, the subscriber for a
bond of 11,000 would be entitled to re
ceive five shares of stock of the par
valuo of 1100 each as a bonus. Thus,
for each 11,000 paid into the treasury
of the company there was Issued 31,600
of securities, of which 1600 might be
considered "water" pure and simple.
Day of Reckoning Came.
There was a day of reckoning for
such railroads and when the crisis
came the bonded indebtedness had to
be scaled down, the rate of interest
was reduced, the old shares of stock
were canceled and new stock Issued
only to such persons as paid assess
ments Into the treasury. A multitude
of railroads In the West and South,
and some In the East havo gone
through this process of reorganization
by which the water has been thorough.
ly squeezed out. Doubtless a careful
analysis of each of these roads today
would show that there Is no water in
their stocks, but In fact there are val
uable assets equal to the par value of
each Issue. But still the thoughtless
man will talk of watered stocks.
PORTED—ED PAGE Thursday ..J
Chairman Knapp, of the Interstate
commerce commission, recognizes this
error on the part of the public when
he says:
"I regard the.C9mmon talk about the
overcapitalization of railroads as whol
ly Ignorant and mistaken. I believe
that In far more Instances than the
people suppose a fair valuation at this
time would glvo figures exceeding the
present estimate. My thought In this
connection is, that an cfllcfal valuation
of railroad properties resulting,
believe It would in most cases. In an
aggregate not less than the present par
value of the stocks and bonds, would
give an assurance and credit to railroad
securities which they now lack In many
cases becauso of the widespread belief
that they represent a large volume of
water. I suppose It Is the element of
uncertainty which gives opportunity to
the gratification of the gambling In
stinct. It la difficult for ine to explain
the wide fluctuation In many railroad
stocks except by assuming that the
public la uncertain and apprehensive as
to the value they represent."
Another Difficulty Met.
In an article In "Moody's Magazine”
for April, John B. Dalsh writes: "An
other difficulty which Is met Is to as
certain what Is the proper capitaliza
tion. Numerous theories have been ad
vanced but no one of them seems to
have received the, approval of the
courts. In considering this matter
some argue that there should be con
sidered the original cost less the depre
dation, If any, and an addition tor the
Improvement; others'argue that the
value should be determined by a con
sideration of the amount of securities
outstanding and their present market
value; others argue that the cost of re
production Is a safe guide; others say
that the matter should be determined
by ascertaining the fair market value
In the same way as the value of real
estate Is ascertained In eminent domain
proceedings; 1 others argue that the
value as a going concern ought to be
considered. Perhaps the real truth, if
we could get at It, lies In an appropri
ate consideration of all these heads to
gether with the constituent elements of
each."
It must be clear to the reader by this
time that the subject of "watered"
stocks Is somewhat complex; that all Is
not water that trickles.
Quite In contrast with the methods
noted abovo Is tho policy of some of
the larger and most prosperous rail
roads of disposing of new stock at a
premium. Bliares have been sold out
right to present stockholders for cash
at a premium of 20 per cent. They
have nlafi been given In exchange for
collateral trust bonds at a premium of
40 per cent, so that the railroad Issuing
the stock was receiving In Its treasury
money considerably In excess of the par
value of shares Issued therefor, a proc
ess just the reverse of watering. Dur
ing the past eight years the Pennsyl
vania rnltroad, which Is conspicuous
for following the policy last noted,
expended over 2300,000,000 of capital
upon Its roadway and equipment, a
large portion of this sum coming from
premiums upon stock Issued, from
profits obtained through the purchase
and sale of the stocks of other compa
nies and from appropriations from
earnings year after year for extraor
dinary expenditures.. Thus the Penn
sylvania shareholders have a large
equity In the assets over the par value
of their shares, an equity which makes
talk of water In Pennsylvania stock
seem absurd. It a valuation of this
company’s assets Is ever made It will
nrana
ROCKEFELLER GIVES
AWAY $2,000,000
TOCHICAGOCOLLEGE
Also Transfers $750,000 in
Real Estate to
His Son.
New York, April 27.—With advanc
lng age making dally Inroads upon his
health, John D. Rockefeller has begun
to turn his enormous fortune over
his son, and to dispose of his real es
tate holdings.
This fact was emphasized today by
the transferring of real estate
Cleveland valued at 3760,000 to John
D. Rockefeller, Jr., and a gift of real
estate worth 32,000,000 to the Unlver
slty of Chicago.
be found that there Is 3140 of value
back of each 3100 of stock and that the
7 per cent paid as dividends on the par
value of the stock Is equal to only 6
per cent upon the actual value of the
shares as represented by the capital
Invested. There are other companies
that will doubtless make as good a
showing If a valuation of their assets Is
ever made by the government.
As to Collateral Trust Bonds.
Iconoclasts who are Inclined to scoff
at all modern methods of finance have
paid their respects to the collateral
trust bonds, which they regard as one
method of creating overcapitalisation.
The Reading-Jersey Central 4s afford
a good example of this class of securl-
“THE FRIEND8 AT HOME.'
But, nevertheless, John Temple
Graves Is one of tbs elect. He can not
say anything that would spoil him to
thousands and thousands of friends and
admirers—those who have never heard
of the editors out there on the frontier
without the light of his presence—
Rome Dally Herald.
HE IS CONTENT WITH
"THE PEOPLE. 1
Again the parties are being led out
of bondage to the spoiler. The con
trast was scarcely more sharply drawn
between Moses and Pharaoh—between
John and Pilate. Here Is the hand of
the people to John.Temple Graves, the
new prophet.
Call It Populism or what you may, It
la genuine patriotism—the real broth
erhood. The nation will now bound
ahead—In wealth, science, education
and the development of the race—as
never before. There Is some Populism
In It. Between Bryan and Roosevelt
they have It all, but call It American
ism. If you please—If It Is more tune
ful. The people are marching forward,
and with such leaders party organiza
tions can no longer obstruct.—Joliet
(III.) Dally News.
AN APPEAL FOR THE
KINGSTON GRAVES,
To the Editor of The Georgian:
Knowing the warm Southern splrl
that exists In you, I desire to call your
attention to a paragraph I saw a few
days ago In one of our Atlanta papers,
stating It as a fact that there was a
town within the state of Georgia that
contained the burying ground in which
there were sixty or more graves of
Confederate soldiers, without a head
stone or any mark to show whom they
were or from where. Is It not n dis
grace to the state of Georgia and her
dozens that such a thing should exist?
That after forty-two years, with all
the wealth and money that has been
spent by the state for various purposes,
she has not seen fit to care for her
heroes of the Civil war, burled upon
her soli? Take this up and see with
your mighty hand and power of your
paper that every gravq within the stato
unknown and unmarked should have
the attention It deserves from the fa,
there, mothers, sons and daughters of
the heroes of the Civil W{
Yours respectfully,
SERGEANT MALCOLM M’NEILL,
Forrest Cavalry, Eighteen Miss. Reg.
ties. These bonds were Issued to. pay
for stock of the Central Railroad of
New Jersey, which was bought by the
Reading company, and the stock pur
chased together with some other col
lateral was pledged to secure the cob
lateral trust bonds. Because this stock
was bought at 3130 per share, a price
which seemed high at the time, the
cry of overcapitalization was heard
when the bonds were Issued. Cei
Railroad of New Jersey shares are now
worth about 3185 a share, and they sold
last year above 323* per Share. The
dividend on the stock has been In
creased so that the Reading derives an
the value of the assets of the
Railroad of New Jersey, its large earn
ing power and the hlglwnarket value of
Its shares, who can truthfully say that
there Is any water In the Readlng-Jer.
sey Central collateral trust bonds'
And they are but a type of similar Is
sues sold by many other companies.
Open Until 11 Tonight
And ready to completely outfit you in stylish, dependable ap
parel. Come in and choose a new suit from our Hart, Schaff-
ner & Marx and Rogers, Peet & Co. lines.
New Shirts
We can’t say enough about
this shirt stock to make you
appreciate its immensity and
its excellence. Come and see it.
Manhattan shirts—$1.50 to
$3.50; other shirts—$1 to $3.50.
Best Hat Styles Here
You can’t go wrong if you come here for the new hat, for
only right sorts of hats are here.
Stetsons at $3 to $6; Miller hats at $5; and advance show
ings of Panamas and straws. ,
Daniel Bros. Co.
L. J. DANIEL, President.
45-47-49 Peachtree—Opposite Walton St.
Ties and Sox
See the smart new patterns
in 50-cent ties—silk and wash
able fabrics.
And a great stock of new
light-weight fancy sox—25c
to $1.00.
/ Jl 3 Af S & / f f 0. /
<3 A f ^
COMPEL. SUCCESS
— By Attending—
The Dixie Business College, Atlanta, Ga.
YOUNG PEOPLE, in these days, cannot succeed in BUSINESS unless skilled in Bookkeeping or shorthand.
BUSINESS MEN, in these days, refuse to employ those who constantly need instruction in their duties.
THE THOROUGHLY TRAINED BOOKKEEPER AND STENOGRAPHER GETS THE JOB AND KEEPS IT
INSURE CERTAIN AND RAPID PROMOTION BY TAKING OUR '
UP-TO-THE-MINUTE COURSES IN BOOKKEEPING, SHORTHAND AND TOUCH TYPEWRITING, BANKING, ETC.
Which Are Thoroughly Taught by Thoroughly Trained, EXPERIENCED TEACHERS at
The School For Thoroughness.
(Corner Peachtree and Mnrietta Sts.)
; ONE HUNDRED STUDENTS ENROLLED, THE FIRST FOUR MONTHS IN HISTORY OF SCHOOL.
THE DEMAND FOR “DIXIE” BOOKKEEPERS AND STENOGRAPHERS WAY AHEAD OF THE SUPPLY.
DIXIE BUSINESS COLLEGE GRADUATES RECOGNIZED AS TnE MOST HIGHLY TRAINED IN THE STATE.
SCHOOL ELEGANTLY EQUIPPED, BEAUTIFULLY 1 LIGHTED, CENTRALLY LOCATED.
EVERY STUDENT RECEIVES THOROUGH INDIVIDUAL INSTRUCTION AND ATTENTION.
WRITE FOR HANDSOME CATALOG AND SPECIAL RATES TO
H. L. Bridges or Bernard C. Ansted, Proprietors.
IMMENSE CROWD \J
ATISiGTQNA
\
Auditorium Packed to Its
Capacity When the At
lantan Appeared.
Special to The Georgian.
Washington, Ga., April 27.—The Me
morial day exercises held In Waxliing.
ton yeeterday afternoon, were con'
ceded to be among the most Inter
esting ever presented on a elmllar oc
casion and the crowd In Washington
to hear the address of Hon. John Tern-
pie Graves, of Atlanta, could not be
accommodated by the large auditorium
In which the exercises were conducted.
All the stores closed their doors from
12 o'clock for the remainder of the day
In honor of the occasion.
Editor Graves reached Washington nt
o'clock from Greensboro, where he de
livered an address In the morning at 10
o'clock. The exercises which were under
tlie direction of the Last Cabinet Chap,
ter of the Daughters of the Confederacy
were commenced at 2 o'clock With the
song, "I Am An Old Time Confederate,"
whtch-wns sung by the veterans. Mr.
Graves commenced speaking at 2:16
and for nearly an hour entertained olfe
of the largest audiences that has as
sembled In the court house auditorium.
Editor Graves left Washington at 4
clock,, to be present In Thomson at
I o'clock Friday night, where he de
livered Ills third address In one day.
CROWD WAS TOO LARGE
FOR THE AUDITORIUM.
Greensboro, Go., April 37.—Hon. John
Temple Graves addressed the largest
audience ever assembled In Greens
boro yesterday, the occasion being Me
morial exercises. 8o great was the
crowd that no auditorium could be
found in the city large enough and 3lr.
Graves was compelled to speak In the
open air from tho steps of the court
house.
Mr. Graves was at his best and
thrilled his large audience by his
matchless eloquence. He was Intro,
duced by Hon. J. B. Prose as "the
silver tongued orator of the United
BtltN."
After the address, hundreds of the
old veterans, as well as the ladles,
rushed forward to shake hands with
Mr. Graves. For twenty minutes he
held a most enthusiastic reception.
Mr. Oraves left here for Washington,
where be delivered a memorial address
In the afternoon .
Veterans’ Graves Decorated.
Special to The Georgian.
Buford, Ga., April 2?.—The Daugh
ter Confederacy held approprl-
memorial exercises at the city
cemetery hen yesterday. The address
of tbs occasion was made by Rev. A.
S. Harris and abort talks were made
by a number of the old surviving Con
federates who wen pnsent. The
graves of those who an burled at the
city' cemetery wen decorated with
flowers.
WOMAN SHOOTS
HUSBAND AT RACES
Raltlmore, Md., April 27.—During the
st I'lmllco yesterday, Mrs. Nina King shot
William Dunn, s betting comnilulouer,
whose home Is understood to be la Elmirs.
She slid she was bis wife.
Will Locate In Brunswick.
Special to The Georgian.
Brunswick, Ga, April 27.—Tl^s Urge
cigar factory which Is now located at
Jesup, will be nmoved to this city os
soon as the change can be brought
about. The factory will have a month
ly pay roll of 32,000.'
GUATEMALAN EXILES
PLAN NEW REGIME
Mexico City, April 27.—It Is rumored
that another revolution Is Imminent
In Guatemala, and If It la successful
the Guatemalan exiles In Mexico ond
Central America expect to organize In
thle city a provisional government for
Guatemala.
LIE IS PASSED IN
U. S. SUPREME COURT
No bad
after effects
from drinking all you want of
POSTUM
FOOD COFFEE
“There’s a Reason.”
wimMnMnHl
Washington, April 27.—In summing
up the Herrmann ca*e yesterday before
the United Statea supreme court the
lie was passed between District Attor
ney Baker and Attorney Worthlngtcn.
The latter resented an alleged Insinua
tion.
HAD OPEN KNIFE
FOR POLICEMAN
P. E. Andrews, a mill foreman who
live* at '393 South Pryor street, went
home with too much whisky on board
Friday at noon and threw all the bed
clothing down atalrs. When Call Offi
cers Buck and Coker answered a call
from Mrs. Andrews, they found an open
knife on the bureau, which looked dan
gerous. Mrs. Andrews said the knife
had been Intended for the "first police-
man who came In.” Andrews was
locked up at the police station.
OOOGOOOOOOOOOOOOOOOOOOOOOO
S STUDENTS TIE UP
O CONTRARY JUDGES. O
O O
a Alton, III.. April 27.—Having O
O decided In favor of the enpho- O
O morn in an oratorical tent at O
O Shortllff College, Professor M. O
O Magun and E. M. Day, two of the O
0 three Judges, were seized by the O
O freshmen, tied on the campus and O
O left there until this morning. O
O00QOQ0O0O00000000000009QU
ROLL OF THE DRUM
GIVES YOUTH TO VETS
Continued from Page One.
fifteen hundred of them In line. That
Atlanta has so many of the younger
generation In her borders was a fact
S mknown to many who saw the little
ellows marching with the dignity of
true soldiers In the long line of the
parade Friday afternoon.
Three Generations.
As keeping perfect step to the music
and with their long lines held In almost
perfection, they passed the Confederate
soldiers In review, many expressions
of praise were heard on every side and
repeated cheers burst from the throats
of the old veteran*. To Dr. Toepel,
physical director of the grammar
schools, and who has taken on active
Interest In the preparation of the chil
dren for participation In the parade, Is
due the wonderful showing they made
Friday \afternoon.
But not only did the appearance of
the children prove Inspiring and Im
pressive, but tbe whole parade elicited
applause
At Oakland, where the exerclsee
rare held, one of the largest crowds
dilch ever assembled on a similar oc
casion was present. Not even the par
tially cloudy condition and the threat
ened rain served to keep the people
away, and for hours before the head of
the parade died between the massive
gate posts of the cemetery great
throngs of people crowded the spacious
area on the Inside.
At Oakland Cemetery.
The speakers' stand was prepared
upon the base of the monument to the
Confederate dead. Chairs were placed
on either aide of the stand for the use
of the prealdent and ladles of the
Memorial Association and others who
were to take part .In the exerclee*.
Around the base of-the monument
an Inclosed space woe reserved for the
veterans of the Confederacy.
After a selection rendered by Wede-
meyeris band. Mrs. Edward G. Warner,
president of the local chapter of the
Daughters of the Confederacy, an
nounced that the crosses of honor could
not be delivered on account of the
rallure of the factory to eupply them
at the proper time. Orand Marshal
Joseph F. Burke then Introduced the
orator of the occaalon, Hon. John T.
Bolfeulllet, of Macon.
Address of the Day.
Mr. Bolfedlltet's address was deliv
ered In the characteristic style of the
eloquent Georgian that he la. With a
fund of adjectives scarcely paralleled
he paid glowing tribute to the women
of the South who, during the dark
days of bloodshed and carnage and the
atjll darker days of the reconstruction
period, Inspired and encouraged the
defeated and all but disheartened war
riors to beat tbe sword Into plowehares
and to build up the new South from
the ashes of the old.
Jn Inspiring colors he pointed the
picture of the Incomparable Lee,
. JE IN BLAZE,-
MUSICIANS ESCAPE
The Love Family Awakened
Barely in
Time.
The family of H. Love, member*
of the well known Love band of musi
cians, had a narrow escape from burn,
lng Saturday morning at 4 o'clock Is
a Are that almost completely de
stroyed their home, a two-story framt
dwelling at. 16 Highland avenue.
The family Was awakened by neigh
bors after the flames had gnlned greal
headway and when the roof was al.
most ready to fall In. Tho frightened
musicians rushed through thick vol
umes of smoke Into tho street and had
time to eave only a few of their ef-
fecte.
By the time the firemen arrived oe
tlje scene, the house was almost de.
strayed, as the blaze had been burn
ing for some time before discovered.
The fire Is supposed to have started
In'the kitchen.
dauntless arid victorious In the blood)
battles around Richmond, when h<
fought with the ferocity of the lion at
bay and hurled back, crushed and
broken, the attacking forces of McCiel.
Ian. He pictured the redoubtable Jack-
eon, as he recklessly rode at the head
of hie column and with unparalleled
daring attacked whole armies with but
a handful of men.
But tribute wee not only paid th<
leaders of the famous conflict by the
speaker. With eloquent tongue he earn
the praises of the men who bora tht
ark of the Confederacy upon the points
of their bayonets end whose quick and
daring execution of the orders of theli
leaders made possible the longest
struggle against overwhelming odds
that history records.
The address of Mr. Bolfeulllet was
frequently applauded and was one ol
tbe ablest erer heard In Atlanta.
The exerclsee were concluded with
the song, "God Be With You Till W<
Meet Again," after which the bene
diction wae pronounced.
After the salute of twenty-one guns
was fired, taps wee sounded over the
graves of the sleeping soldiers by Fas
Wilson, of the Governor’s Horse Guard.
Aged Negro Found Deed,
Special to Tbe Georgian.
Griffin, Oa.. April 27.—Mack Wil
liams, an ante-bellum negro about 10
years of age, was found dead In a shal
low brunch In tbe northeast corner of
tlie county.
v
4%
Interest Compounded, Allowed In Our
SAVINGS DEPARTMENT
On and After January 1,1907
TH E NEAL BANK
E. H. THORNTON, President.
W. F. MANRY, H. 0. CALDWELL, F. M. BERRY,
Vice President. Cashier. Ass t Cashier.