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THE ATLANTA GEORGIAN AND NEWS
SATURDAY, APRIL 27, 190T.
railroad stocks supported
BY GOOD AND TANGIBLE ASSETS:
REPRESENT ACTUAL VALUES
'in reply to the Indictment so often
made against railroads In halls of leg
Ertatl«n and by public speakers and thi
„ re «s that the watering of their stocks
Jut of all proportion to their actual
vslue Is responsible for burdensome
charges upon the people, the neglect of
rolling stock and equipment, resulting
In the delay of freights and the de
moralization of schedules, the follow
ing defense, prepared by a staff con-
hbutor nnd printed in The Railway
World Is interesting as affording a fair
idea of the "other side” of the question:
Talk o{ "Water” Flippant,
people talk as glibly about water In
n ilroad stocks os they do about a liver
overflowing Its banks during a Jan-
nnry thaw, and no doubt many persons,
on account ot their talkative habits,
have come actually to believe that
vhat they eay of railroad etocks It lit-
emllv true. No distinction Is made;
•II railroads shares are put In the samo
Class by the unthinking public. Thle
flippant talk, however, Is causing other
uni wiser persons to ask themselves
v hat constitutes water In etocks, and
the more they reflect upon the Inquiry
the farther they appear to be.from a
jiilifactory answer. A company may
he operated for years without paying
anything to Its shareholders In ttje way
of dividends. Year after year earnings
are appropriated for improvements for
iccond and third tracks, for better ter
minals. 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
may fulfil It* obligations to the pub
lic.
At length as a partial restitution to
the shareholders they are given a cer
tain proportion of new shares without
cost. Is the new Issue water? The
public will say It Is, but the sharehold
ers 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 lasued
there has been put Into their property
out of the earnings three or four dol
lars, that there Is good value In the
way of tangible assets back of every
•hare Issued which represents new
capital Just as much as If the share
holders had 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.
Invettor Worthy of His Income.
Just as the laborer Is worthy of his
hire so Is the Investor worthy of an
Income upon hie investment. Having
been deprived of the Income to which
he Is entitled, in order that the public
may be benefited through a diversion
of earnings to an Improvement of the
properly. It follows that the Investor
la entitled to bo made whole In some
manner. The simplest way to accom
plish this Is by an Issue of stock which
h distributed pro rata among the
rhsreholders without cost. When In
tuturc yeurs the company has pros-
lered so that It may pay dividends
the new shares Issued In the above
manner are just as much entitled to
receive dividends as are the original
shares for the reason that the new
shares represent capital actually In
vested
An old method of "watering” stock,
not much In vogue now if at all In the
financing of railroads, was to Issue
shares ns 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
many railroads had to be reorganized.
As an example, the subscriber for a
bond of tl.ooo would be entitled to req
reive five.shares of stock of the par
value of $100 each at a bonus. Thus,
for each $1,000 paid Into the treasury
of the company there was Issued 11,BOO
of securities, of which $500 might be
considered "water” pure end 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 icaled down, the rate of Interest
was reduced, the old shares of stock
were canceled and new stock leeued
only to such persons as paid assess
ment into the treasury. A multitude
railroads In the West and South,
and some In the East have gone
through this process of reorganisation
hlch the water has been thorough.
ly squeezed out, Doubtless a careful
woo'mIi. 0 * *¥ h °? th **® roa<) * today
r h °.r ■ h r i hat the ™ u n ° wa, * r »
o.oL ,toclt *' but In fact there aro val-
“ aa '® aszete equal to the par value of
,tui ,he thoughtless
“auw talk of watered etocke.
PORTED—ED PAGE Thursday ,.J
a rman Kn app. of the Interstate
commerce commission, recognizee thle
error on the part of the public when
ne says:
the common talk about the
overcapitalization of railroads as whol
ly !&" or * n t and mistaken. I believe
tnat in far more instances than the
people suppose a fair valuation at this
time would give figures exceeding the
nt .i C * t ! tna *.®' **F thought in thle
connection Is, that an official valuation
of railroad properties resulting, as I
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
?? a ??.!?® caua0 ot ,h ® 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 is difficult for me to explain
the wide fluctuation In many railroad
stocks except by assuming that the
public la uncertain and apprehensive aa
to the value they represent.”
Another Difficulty Met
In an article In “Moody's Magazine”
for April, John B. Dalsh write*: “An
other difficulty which la met Is to as
certain what Is the proper capitalisa
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
tome argue that there should be con.
sldered the original cost less the depre.
elation. If any, and an addition for 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 la a safe guide; other* 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; others argue that the
value at 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.
Qulte'ln contrast with the methods
noted above is the policy of some of
tho larger and most prosperous rail
roads of disposing of netv stock at a
premium. Shares ltave been sold out
right to present stockholders for cash
at a premium of 30 per cent. They
have also been given In exchange for
collateral trust bonds at a premium of
40 per cent, to that the railroad Issuing
tho 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 railroad, which Is conspicuous
for following the policy last - noted,
expended over $$00,000,000 of capital
upon Its roadway and equipment, a
“ of thle eum coming from
ROCKEFELLER GIVES
AWAY $2,000,000
TOCHICAGOCOLLEGE
Also Transfers $750,000 in
Real Estate to
His Son.
New York, April 27.—Wltli advanc
ing age making dally Inroads upon his
health, John D. Rockefeller has begun
to turn his enormoue fortune over to
his son, and to dispose of his real es
tate holdings.
This fact was emphasised today by
the transferring of real estate In
Cleveland valued at 2760,000 to John
D. Rockefeller, Jr., and a gift of real
estate worth $2,000,000 to tho Univer
sity of Chicago.
large portion
premium* upon stock Issued, from
profits obtained through the purchase
and sale of the stocks of other compa
nies and from appropriations from
earning! year after year for extraor
dinars' expenditures. Thus the Penn,
sylvanla 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. If a valuation of this
company's assets Is ever made It will
be found that there la 2140 of value
hack of each 2100 of slock and that the
7 per cent paid as dividends on the par
value of the etock Is equal to only 6
per cent upon the actual value of the
■hares 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.
Iconoclast* who are Inclined to scoff
at *11 modern methods of finance have
paid their respects to the collateral
trust bonds, which they regard ai one
method of creating overcapitalisation.
The Reading-Jersey Central 4s afford
a good example of this class of eecurl-
"THE FRIEND8 AT HOME.”
But, nevertheless, John Temple
Graves Is one of the elect. He can not
say anything that would spoil .‘:lm 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.”
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
Is 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 It 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 splr!'.
that exists In you. 1 desire to call your
attention to a paragraph I saw a few
days ago In one of our Atlanta papers,
stating It as a tact 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. I* It not a dis
grace to the state of Georgia and her
rltlsens 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 purpose*,
she has not seen fit to care for her
heroes of the Civil war. burled upon
her soil? Take thle up end see with
your mighty hand and power of your
paper that every grave within the state
unknown and unmarked ehould have
the attention It deserve* from the fa.
there, mothers, eons and daughter*
the heroes of the Civil war.
Yours respectfully.
SERGEANT MALCOLM M'NEILL,
Forrest Cavalry, Eighteen Mlee, Reg.
tie*. These bond* were Issued to pay
for stock of the Central Railroad ot
New Jersey, which was bought by the
Reading company, and the stock pur.
chased together with some other col>
lateral woe pledged to secure the col
lateral trust bonds. Because thle etock
was bought at 21*0 per share, a price
which seemed high at the time, the
cry of overcapitalisation was heard
when the bonds were issued. Central
Railroad of New Jersey shares are now
worth about 2186 a share, and they sold
'12 per share.
creased so that the Reading derives an
Income from the shares after paying
the Interest on the bonds. Considering
the value of the assets of the Central
Railroad of New Jersey. Us large earn
ing power and the high market value of
Its shares, who can truthfully cay that
there Is any water In the Reading-Jer
sey Central collateral trust bond*?
' they are but a type of similar 1
i 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.
Sew 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.
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.
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.
/ J2, 3 S & 7 F 0.
<3 A
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 Marietta 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 THE MOST HIGHLY TRAINED IN THE STATE.
SCHOOL ELEGANTLY EQUIPPED; BEAUTIFULLY 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.
HEARD COL. GRAVES
AI WASHINGTON, Gft,
Auditorium Packed to Its
Capacity When the At
lantan Appeared.
tors of the Confederacy held approprl
ate memorial exercise* at the city
cemetery here yesterday. The address
of the occasion was made by Rev.
S. Harris and short talks were made
by a number of the old surviving Con
federates who were present. The
graves of those who are burled at the
city cemetery were decorated with
flowers.
Special to The Georgian.
Washington, Ga, April 27.—The Me
morial day exercises held In Washing
ton yesterday afternoon, were con
ceded to be among the moet Inter
esting ever presented on a similar oc
casion and the crowd In Washington
to hear the address of Hon. John Tem
ple Graves, of Atlanta, could not be
accommodated by tho large auditorium
In which the exerclees were conducted.
All the etoree closed thetr doors from
12 o'clock for the remainder of the day
In honor of the occasion.
Editor Graves reached Washington at
1 o'clock from Greensboro, where he de
livered an address In the morning at 10
o'clock. The exercises which were under
the direction of the Last Cabinet Chap
ter of the Daughters of the Confederacy
were commenced at 2 o’clock with the
•ong. "I Am.An Old Time Confederate,"
which was sung by the veterans. Mr.
Graves commenced speaking at 2:16
and for nearly an hour entertained one
of the largest audiences that hns as
sembled In the court house auditorium.
Editor Graves left Washington at
o'clock,, to be present tn Thomson at
8 o'clock Friday night, where he de
livered his third address In one day.
CROWD WA8 TOO LARGE
FOR THE AUDITORIUM
Oreensboro, Ga„ April 27.—Hon. John
Temple Graves addressed the largest
audience ever assembled In Greens
boro yesterday, the occasion being Me
morial exercises. Bo great was the
crowd that no auditorium could be
found In the city largo enough and Mr.
Graves was compelled to epesk In the
open air from the steps of the court
house.
Mr. Graves was at his best end
thrilled his large audience by hie
matchless eloquence. He was Intro,
duced by Hon. J. B. Prose 4s "the
sliver tongued orator of the United
States.”
After the address, hundreds of the
old veterans, as well as the ladles,
rushed forward to shake hands with
Mr. Grave*. For twenty minutes he
held a moet enthusiastic reception.
Mr. Graves left hero for Washington,
where lie delivered a memorial address
In the afternoon .
Veterans’ Gravas Decorated.
S-ieclal to The Georgian. *
Buford, Ga., April 27.—The Daugh-
WOMAN SHOOTS
HUSBAND AT RACES
'Imltco yesterday. Mrs. Nina Kins shot
Wllllnm Dunn, a betting commissioner,
whose home Is understood to
She asld aha was his wlfo.
Will Locate In Brunswick,
Special to The Georgian.
Bruniwlck, Ga., April 27.—The large
cigar factory which Is now located at
Jesup, will be removed to this city as
soon as the change can be brought
about. The factory will have a month
ly pay roll of 22,000.
No bad
after effects
from drinking all you want ot
POSTUM
FOOD COFFEE
‘‘There’s a Reason.”
WMimMHnmwiai 1
GUATEMALAN EXILES
PLAN NEW REGIME
Mexico City, April 27.—It le rumored
that another revolution Is Imminent
In Guatemala, and If It Is successful
the Guatemalan exllea In Mexico ond
Central America expect to organize In
this city a provisional government for
Guatemala.
LIE IS PASSED IN
U. S. SUPREME COURT
Washington, April 27.—In summing
up the Herrmann case yesterday before
the United State* supreme court the
lie was passed between District Attor
ney Baker and Attorney Worthington.
The latter redtnted an alleged Insinua
tion.
HAD OPEN KNIFE
FOR POLICEMAN
P. E. Andrews, a mill foreman who
lives at <22 South Pryor street, went
home with too much whisky on board
Friday at noon and threw all the bed
clothing down stairs. When Call Offi
ce™ Luck and Coker answered a call
from Mrs. Andrews, they found an open
knife on the bureau, which looked dan
gerous. Mre. Andrews aald the knife
had been Intended for the "first police
man who cam* In." Andrew* waa
locked up at the police station.
00009000000000000000000000
O O
0 8TUDENTS TIE UP O
O CONTRARY JUDGES. O
O O
O Alton, III., April 27.—Having O
O decided In favor of the aopho- O
O mores In an oratorical test at O
O Hhortllff College, Profeeoor M. O
O Mngun and E. if. Day, two of the O
O three Judges, were seised by the O
O freshmen, tied on the campus and O
O left there until this morning. O
0OOOOOOOOOOOOOOOOOQOOOOOOO
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 borden was a fact
unknown to many who saw the little
fellow* 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
soldlen -1 n review, many expressions
of praise were heard on evsry side and
repeated cheen burst from the throats
of the old veterans. To Dr. Toepel,
physical director of the grammar
schools, and who ha* taken on active
Interest In the preparation of the chil
dren for participation tn the parade, le
due the wonderful showing they made
Friday afternoon.
But not only did the appearance of
the children prove Inspiring and Im
pressive, but the whole parade elicited
applause and expressions of surprise
and satisfaction from all who witnessed
it.
At Oakland, where the exercise*
were held, one of the largest crowd*
which ever assembled on a similar oc
casion was present. Sol even the par-
cloudy condition and the threat-
rain served to keep the people
away, and for hours before the head of
the parade filed 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 waa prepared
upon the base of the monument to the
Confederate dead. Chairs were placed
on either side of the stand for the use
of the president and ladlea ot the
Memorial Association and other* who
were to taka part In the exercises.
Around the bass of the monument
an Incloied space waa reserved for the
Veterans of the Confederacy.
After a selection rendered by Wede-
IE III BUS:
MUSICIANS EVE
The Love Family Awakened
Barely in
Time.
The family of H. Love, member*
of the well known Love band of musl-
clans, had a narrow escape from burn.
Ing Saturday morning at 4 o'clock le
fir* that almost completely de
stroyed their home, a two-story from*
dwelling at If Highland avenue.
The family was awakened by neigh
bors after the flames had gained greal
headway and when the roof was al
most ready to fall In. Tho frightened
musicians rushed through thick vol
umes of smoke Into the street and had
time to ears only a few of (heir ef
fects.
By the time the firemen arrived os
the scene, the house was almost de
stroyed, a* the blase had been burn
ing for some time before discovered.
The fire le supposed to have started
in tht kitchen.
irealdent of the local chapter
daughters of the Confederacy,
si chap
Confeai
nounced that the crosee* of honor could
not be delivered on account of the
failure of the factory to supply them
at the proper time. Grand Mi
Joseph F. Bur
time. Grand Marahal
urke then Introduced the
orator or the occasion, Hon. John T.
Bolfeultlet, of Macon.
Address of the Day.
Mr. Bolfeulllet’i address waa deliv
ered In the characteristic style of the
eloquent Georgian that he. Is. With a
fund of adjectives scarcely paralleled
he paid glowing tribute to the women
of the Bouth -who, during the dark
days of bloodshed and carnage and the
atilt darker daya of the reconstruction
riora to beat the sword Into plowshares
and to build up th* new South from
the ashes of the old.
In Inspiring colors he painted th*
picture of the incomparable Lee,
dauntless and victorious In the bloody
battles around Richmond, when h«
fought with tho ferocity of the lion al
bay and hurled back, crushed and
broken, th* attacking forces of McClel.
Ian. lie pictured the redoubtable Jock-
son, as he recklessly rods at the head
of his column and with unparalleled
daring attacked whole armies with but
a handful of men.
But tribute was not only pal<j the
leaden of the famous conflict by the
speaker. With eloquent tongue he sans
th* p/alses of the men who bore the
ark of the Confederacy upon the polnte
of their bayonets and whose quick and
daring execution of the orders of thelt
leaden made possible the longest
struggle against overwhelming oddi
that history record*
The address of Mr. Bolfeulltet wsi
frequently applauded and was one ol
the ablest *v*r beard In Atlanta.
The. exerclees were concluded with
th* song, "God Be With You TIM Wt
period. Inspired and encouraged the Uili-i, ,
defeated and all but disheartened war- “®® 1 Again, after which the bene-
-* ' **' diction wa* pronounced.
After the salute of twenty-one
wa* fired, taps was sounded
raves of the sleeping soldlen ay l ay
,’llaon. of the Governor’s Horn Guard.
Aged Negro Found Dead.
Special to The Georgian.
Griffin, Oa., April 27.—Mack Wil
liam*. an ante-bellum negro about 20
year* ot age, was found dead In a shal
low branch In the northeast corner of
th* county.
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. C: CALDWELL, F. M. BERRY,
Vice President. Cashier. Ass't Cashier.