text of improving the property, issue, say, another $100,000,000 of stock. Thus the burden of the industry is doubled. Thereafter it has to pay dividends upon $200,000,000 instead of $100,000,000. The advantages .to the crooks engineering the hocus-pocus are many. For one thing they are enabled to steal scores of millions at a blow; and another is that the resultant cutting of the dividend rate (which in the case cited would be 50 per cent) puts the road in the position of being poverty-stricken and furnishes an excellent excuse for beating down wages and screwing up passenger and freight rates. When, however, through wage-cutting, rate-raising and the natural increase in business, the dividend rate rises on the watered stock, then the crooks inject more water and the whole process is gone over again.
By means of this watered stock swindle every railroad system in the United States has been used as an instrument of extortion and robbery. Dozens of railroads have had their equipment ruined and themselves thrown into bankruptcy because of it. At a hearing a few years ago in conection with the financial wrecking of the Rock Island it was found that the Moore & Reid interests had poured $350,000,000 of watered stock into the original capitalization of $75,000,000. It was more than the road could stand and it went under. In 1907, according to C. E. Russell, of the $409,946,845 capitalization of the New York Central, at the very least $175,000,000 was nothing but water. By watered stock and other crooked schemes the infamous Credit Mobilier gang similiarly ruined the Union Pacific. Then, when everyone thought it had been bled to death, Russell Sage and Jay Gould came along and stole another $100,000,000 from it. Later, Standard Oil, operating through Harriman, got the road and is now exploiting it more vigorously than ever. Up to 1908 the Great Northern clique, grace to their various land-grabbings and stockwaterings, had taken in profits from that rich property and had values in sight to the enormous amount of $1,526,016,-
