188 
BONDS AND STOCKS 
homes to the office or shop and back again at night 
are proof of the security of street railway bonds. 
The fact that such a statement as this seems so 
commonplace is proof of the necessity resting upon 
the people, industries and commerce to support 
these public utilities.” 
The principle exploited in the above statements 
is radically wrong, and is at the bottom of ninety 
per cent of all financial and political troubles affect 
ing railway properties in our large cities today. 
The point made by this writer, that the actual cost 
or replacement value of the real property possessed 
is a secondary matter; and the strength of street 
railway securities lies in the power of the company 
to tax “the throngs of clerks and workmen carried 
every morning from their homes to the office and 
shop and back again at night,” is an exploded fal 
lacy. Fortunately for the citizen and unfortu 
nately for the promoter, there has been progress 
in civic conditions as well as in means of transporta 
tion, methods of manufacture and other lines, 
and although the principle outlined in the 
above quotation could have been depended upon 
and utilized a dozen years ago, this is not the 
case today. 
Today, unless street railway securities are rein 
forced by property, the actual replacement value 
of which exceeds the market value of the securities, 
they should not be recommended by conservative 
banking houses. There was once a time when a 
street railway company could increase its earnings 
so as to pay the interest on almost any capitalization