PRE-WAR PRINCIPLES AND METHODS 39

of Locomotive Engineers and Firemen and other employees,
 has been afforded by an analysis of the dividend
disbursements of only fourteen companies during the
past fiscal year—a subnormal period of industrial depression.
 These companies alone were found to have paid
dividends in 1914 on fictitious stock issues amounting to
$43,167,599. This does not account by any means for
all of the excess stock of Western Railroads which are
engaged in these proceedings, but only for a number of
representative and illustrative cases. A comprehensive
estimate would also have to take fictitious bond issues
into consideration. If the future outlook were also
considered; hundreds of millions of dollars of fictitious
capitalization would be discovered which has not as yet
received remuneration but which may become a drain
1pon operating revenues.

[t will be noted that the claim was made that the net
gains secured from the increased productive efficiency of
railway engine and train crews, as well as from the investment
 of new capital, from managerial efficiency, and from
government land grants, had been improperly absorbed or
dissipated by railroad financial management, and, as a
consequence, neither employees, travelers nor shippers had
received a fair participation in these productive gains. The
overturning of the existing financial structure and management
 of the railroads was not advocated, but the
demand was made for the granting of a just share to employees
 in revenue gains arising from their increases in
productive efficiency before further corporate distribution
of funds was permitted.
The representatives of the railroads replied to this argument
 by the counter-claim that decreases in costs of operation
 had been made possible by increases in capital investment,
 and improved facilities had lessened rather than
increased the physical labors of employees. From this it