OCR Interpretation


The day book. (Chicago, Ill.) 1911-1917, November 20, 1912, Image 12

Image and text provided by University of Illinois at Urbana-Champaign Library, Urbana, IL

Persistent link: http://chroniclingamerica.loc.gov/lccn/sn83045487/1912-11-20/ed-1/seq-12/

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WHY THE STREET CAR CQMPANIES pON'T WANT TQ
SHOW THifl WUrXta TJtiJSJJK tfUUJVd
When a street railway company
doesn't want to show its books,
there's a reason.
'That reason is generally water
ed bonds and stocky f
Practically, every dollar of
stock in most Street railway com
panies is water, and in many
cases there is water m the honds,
too.
If men invest $10,000,000 of
real money in a street railway
they'll capitalize it at from. $20,
0Q0,000 to $50,000,000. ,
They get a franchise frbrn the
people, and place a value on it
way up in the millions. Then they
issue bonds for this franchise
value, and the people who" gave
them the franchi$ehave, to pay
the interest on thepe bonds.
Then, in addition to the wate
e bondshey issiie millions of
watered stock, and make the peo
ple pay dividends on that.
The first thing that has to be
paid after operating expenses, is
interest on bonds. After that
come the dividends on stock.
Chicago Jias an arrangement
whereby the city gets 55 per cent
of the net receipts. But the net
receipts mean the receipts after
the bondholders have taken out
interest on all of the bonds, in
cluding the watered bonds which
were donated by the owners" to
themselves.
Now, "if the street railway men
get a looloat the books of the Chi
cago company, they might show
the arbitration board how much
jvater there is in the bonds and
stock, and how muchr easy graft
the caDitalists are eettiner on
bonds and stock issued without
any investment of real moriey.
And that would show that the
company could easily pay- living
wages, if it were satisfied to earn
interest and profit only on money
actually invested;..
Of course, if the company is
permitted to pay first, millions qf
dollars a year interest on watered
bonds and dividends on watered
stock, it. can: easly show that it
can't afford to pay living wages.
The board of arbitration should
force the committee to show" up
its books, and..tetj.the- representa
tives of flietreej, railway em
ployes fjndit $fievactual invest
ment. " c
If there were, nothing in the
hooks that"' thfe company was
afraid to have the pqople know,
no fuss would be made about
showing up the books.
When tjie company refuses to
show the books, it is ptoof enough
that therels something in them
that the bond and stockholders
dpn't want the .people of Chicago
to find out.
Af a very convivial dinner a
man with a solemn face arose,
wineglassJn hand, to propose' a
toa'st.
"May we never,"M he said, in
deep, measured tones, "drink any
more of this stuff " He paused,
and there was a horrifiedsilence
for several seconds. "Than is
good for-us."

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