38 
INDUSTRIAL REVOLUTION AND WAGES 
securities which have been issued without actual invest- 
ment or additions to the earning value of the properties. 
(d) As a result of the methods of financing or selling 
securities developed under this banking control of West- 
ern Railroads, large discounts and commissions have 
been paid which have been without jurisdiction. By 
way of illustration, the recent investigation of the St. 
Louis and San Francisco Railroad by the Interstate 
Commerce Commission disclosed the fact that discounts 
and securities were paid to banks and syndicates which 
aggregated the enormous total of $32,152,602 during the 
period 1896-1913. Enormous bonuses to stockholders 
have also been granted during this same period of years. 
More than $250,000,000 was distributed in this way 
during the period 1900-1910 by eight representative 
Western Railroads alone. By the sale of securities at 
much less than their prevailing market prices, these com- 
panies were obviously deprived of cash resources which 
they should have had, and at the same time issued excess 
capitalization which became a drain upon operating 
revenue. If it had not been for these practises, the 
financial status of the Railroads which are parties to 
the present proceedings would be much more satisfactory, 
and much greater amounts of surplus revenues would 
he available. 
(e) Recent Railroad reorganizations have also been 
made the basis for the flotation of immense amounts of 
fictitious securities which have actually absorbed existing 
revenue, through unwarranted dividend and interest 
requirements, or will be made the basis for the absorption 
of future revenue gains. 
(f) An indication of the extent to which the financial 
condition of Western Railroads has been adversely 
affected by financial mismanagement, and a startling 
illustration of the absorption of revenue gains produced 
by operating efficiency and increased work and output