A. The movement toward consolidation and community of interest. LXVI C. Minnesota law as to railroad consolidation. D. Pooling and agreements... III. FREIGHT TRAFFIC AND RATES GENERALLY. LXVIII LXXII LXXII A. Existing freight rates. Recent movements LXXIV B. Policy regarding rates. Competition and other influences. LXXX LXXXII D. Export and import rates XC E. Differential rates from the West to the Eastern cities. XCII XCIII IV. DISCRIMINATIONS BETWEEN PERSONS. A. Discussion as to existence and extent of practice. B. Methods of discrimination.... C. Discriminations as affected by legislation V. DISCRIMINATION BETWEEN PLACES. A. General principles. Discussion.. C CIII CIV CV B. Long and short haul discriminations in the South. Basing point CVII C. Alleged discriminations between rates from East and West to CX D. Miscellaneous discriminations and rate adjustments in the CXIII CXIX CXVI E. Alleged discrimination against Denver F. Freight rates to the Pacific coast and sea competition.. VI. TICKET BROKERAGE. PASSENGER BUSINESS. A. Character of people engaged in the brokerage business B. Methods of business VII. THE ANTHRACITE-COAL SITUATION. A. Relation of railroads to coal industry. Alleged community of interest.... B. Relation of railroads to independent operators CXXIX CXXXV VII. THE ANTHRACITE-COAL SITUATION-Continued. D. Alleged discrimination against independent operators. G. Capitalization of coal roads and reserve coal lands. Page. CXXXVII CXLIII CXLV CXLIX CLVIII CLXI I. Conditions of labor and relations of employers and employees.. CLXIV VIII. REGULATION OF RAILROADS, INTERSTATE COMMERCE COMMISSION. A. Railway legislation generally ... CLXVI B. Powers of Interstate Commerce Commission. Proposed amend- CLXVI C. Inspection and regulation of railroad accounts CLXX CLXXII CLXXIV CLXXIV D. State railroad commissions and regulations E. Departments of commerce and transportation. IX. WATER TRANSPORTATION. A. General relation to rail transportation B. Atlantic coast wise transportation X. TRANSPORTATION ON THE MISSISSIPPI AND TRIBU- A. Statistics and character of Mississippi River commerce CLXXXIV CLXXXVI CLXXXVII CLXXXVIII C. Freight rates. Competition with railroads D. Miscellaneous XI. THE TAXATION OF RAILROADS. VALUATION A. Uniformity of taxation.... B. Taxation and valuation of railroads in Michigan.c. C. Taxation of railroads in Minnesota. IN D. Valuation of railroad property by National Government.. CLXXXIX CXCII CXCIII A. General argument for Government ownership CXCIII B. Advantages of Government ownership and evils of private F. Relations to newspapers, exchanges, and Government. CCXVII G. Alleged discrimination in use of wires... CCXX H. Alleged influence of the telegraph company in politics XIV. THE TELEPHONE BUSINESS-Continued. C. Comparison of American and European telephone rates and D. Labor conditions. XV. MUNICIPAL PUBLIC UTILITIES. Page. CCXXXII CCXXXVIII A. General discussion of regulation and public ownership...... ccxXXIX E. Regulation of private ownership. CCXLVII CCXLVIII CCXLIX F. Uniform and public accounting-municipalities and public- G. Street-railway development and problems XVI. RAILWAY LABOR. LABOR QUESTIONS GENERALLY. F. Commission and jobbing business. Elimination of jobber.. CCLXXXV G. Alleged discrimination in Government contracts CCLXXXVI CCLXXXVI CCLXXXVI CCLXXXVI CCLXXXVI CCLXXXVI CCLXXXVII TOPICAL DIGEST OF EVIDENCE. I. RAILWAY FINANCES GENERALLY. (See also Inspection of accounts, p. CLXX.) A. Capitalization of railroads (see also Capitalization of corporations, p. CCLXXII).-1. Are American railways overcapitalized?-Professor RIPLEY says that in some roads the capitalization is greatly swollen and in some roads it does not represent more than actual investment. In some roads capitalization covers not only the first cost, but all improvements in the road. In others it does not. The old Chicago and Alton, for instance, was so conservatively financed that the capitalization represented only 60 per cent of the value of the property. The relation between the capitalization of a road and the value of its property should lie at the basis of the determination of what rates are reasonable. A road is not always entitled to earn a living interest in dividends upon its capitalization, because a part of that capitalization may be fictitious. (291, 292, 306.) Professor Ripley says that while the selling of bonds at a low figure to persons who carry through a deal and the reselling of these bonds at a high figure is not technically stock watering, yet it has the same effect. He cites the case of the Chicago and Alton. Its volume of securities was increased from about $42,000,000 to something like $120,000,000, a large part of the increase going in profits to the persons who had the deal in charge. (304.) Professor PARSONS asserts that the tendency of the great railway corporations is to build up capitalization all the time, adding together the cost of the original plant and the cost of all improvements, reconstructions, etc., until, even with honest bookkeeping and without any stock watering, the capitalization comes to be 2 or 3 times the worth of the plant, and the face value of the stock and bonds of these corporations is very much more than the cost of the plant or what it could be duplicated for. In all the corporations there is more or less watered stock. The system of watering railway stocks originated with Vanderbilt when he consolidated the various railway properties now constituting the New York Central system and increased the capitalization from $54,000,000, which was a little more than the actual cost of the roads, up to $103,000,000. The total capitalization of the railways of the country is a little over $60,000 a mile, while the cost of reproduction would be under $30,000 a mile. The cost of reproduction of a plant is a fair test of what it should be capitalized at. There is a total difference of policy under governmental ownership, where there is no water or inflation, but exactly the opposite policy of reducing the capitalization from year to year. One of the reasons given by the Swiss Federal Council for going over to public ownership was that they were surrounded by countries that were aiming to reduce rates to the least possible figures, and that the Swiss roads would pile up the capitalization so high that they would not be able to compete. (154–155. ) Mr. TEISBERG, Secretary of the State railroad and warehouse commission of Minnesota, states that a district court in his State found that the cost of reproducing the Great Northern road, some 1,385 miles, in Minnesota would be an average of $32,000 per mile. About one-third of this amount was the cost of the terminals. The supreme court found this to be exorbitant. (365.) Mr. SCHIFF, of Kuhn, Loeb & Co., bankers, does not believe there is such a thing as excessive capitalization. The market value of the stocks and bonds of one transportation company adapts itself to that of another company which may have an entirely different capitalization. The market value of competing lines adapts itself to a relative level, whatever the capitalization. In the case of the acquisition of the securities of one road by another there is not necessarily any danger that the purchase may be made at a high figure, which may afterwards be carried in the capitalization of the two roads. That would depend upon the good judgment of the railroad managers. During the past year or two acquisitions of this sort have been made |