521. Investigating the New York, New Haven & Hartford, which had collapsed financially, the Interstate Commerce Commission found that the bandits owning that concern had increased its capital stock 1500 per cent in eight years, and had pocketed almost all of the money.
The general result of this stock-watering continued over many years, has been to enormously over-capitalize the railroad industry. Many experts declare that all the railroads in the United States could be replaced for ten billion dollars. But the companies have them capitalized at nineteen billions, and insist upon returns on that basis. And the powers-that-be are quick to recognize their claims. The Interstate Commerce Commission is always very obliging in the matter of rates. And the Government does what it can, too. The infamous Esch-Cummins law, which Senator LaFollette fittingly characterized as marking "the unconditional surrender of Congress to Wall Street," guaranteed the railroads a return of at least 5½ per cent on their swollen capitalization during its term. Under its provisions the railroads were paid on the basis of $940,000,000 per year, or at the rate of enough to rebuild all of them in ten years. Such a price are we compelled to pay for being dominated and abused by our railroad autocracy.
To share in the great loot from the railroads there were officially listed on December 31st, 1918, 647,689 stockholders. But many of this number are duplications, because although one individual may hold stock in numerous companies he is counted separately for each holding. It is extremely doubtful if the total number of railroad stockholders will run over 100,000. And the great majority of these are small fry, owning only a share or two apiece. It has been estimated that one per cent of all the stockholdrs own over 50 per cent of all the stock. It is to support in luxury this minority of parasites that the vast army of 1,850,000 railroad workers keep the 235,000 miles of railroads in operation for beggarly wages and under the most unfavorable working conditions.
