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cule, and dark looks and jeers by a crowd or group of men to induce others not to work, can be prevented sufficiently, it would seem, by direct criminal law. It is very doubtful, however, whether anything short of violence, or threats of violence which are criminal when done even by an individual, should be prohibited by law or injunction. Why should not those concerned in a labor dispute have as much right to employ epithets and ridicule, or other peaceful evidence of displeasure, as have the great political parties of this country in the height of a political campaign? There is little limit to the language then employed. Surely even more latitude rather than less should be allowed to strikers who are frenzied at seeing others take their places at the mine or shop. If this be admitted, it is necessary either to forbid all injunctions in labor disputes, and legalize most forms of so-called intimidation, or to see to it that judges are elected or appointed that will use the injunction very sparingly.
In replying to a recent letter of inquiry of the Chicago Times-Herald, seven prominent judges in different states criticised the late use of injunctions in labor difficulties and only two favored it, six others being non-committal. Judge Murray F. Tuley, chief-justice of the Appelate court of Illinois, declared:-
"When courts undertake to settle labor disputes by the use of the writ of injunction they are acting without jurisdiction. To use the writ of injunction to disperse or prevent an unlawful assemblage, or to patrol a public highway with armed deputy marshals, is a usurpation of power by the courts. When 'labor disputes' endanger the public peace or render the destruction of property imminent, no good citizen can object to the executive branch of the government using its 'iron hand' to prevent either, but no amount of legal quibbling will satisfy the people that the writs of injunction of the federal courts in the coal strike have not been issued and used for the purposes and object above stated. Such use of the writ of injunction by courts is judicial tyranny, which endangers not only the right of trial by jury, but all the rights and liberties of the citizen. I venture to predict that unless this usurpation of power by the courts is promptly checked we shall within a few years see elections— and a presidential one perhaps--carried by a court's writ of injunction backed by armed 'deputies' or federal soldiers. If Congress has the power it should promptly put an end to 'government by injunction' by defining and limiting the power of the federal court in the use of the writ."
It is certainly a striking evidence of the undeveloped state of the reform movement in America, that in Chicago, where there was so much excitement over injunctions in the Pullman strike, and again very recently in the miners' strike, there was no demand from any quarter to know the attitude on injunctions and factory legislation of the candidates for judges voted for in the last spring election. At that time three
or four tickets were in the field for judges from all the leading courts, but the only political question put to these candidates was their attitude upon the silver question. Until we can learn a little more commonsense in such matters, we can say with Shakespeare, "It is not in our stars, it is in ourselves that we are underlings."
EDWARD W. BEMIS.
THE NO DIVIDEND ARGUMENT.
As municipal and government functions are gradually extended, the occasion for investigating committees and commissions of one kind or another seems to have kept pace with this extension. Our cities, every now and then, endeavor to secure some definite information concerning the quasi-public corporations that serve their citizens, with the evident intent of acting upon that information, if favorable, to the extent of purchase or lease. It is not here proposed to examine the desirability of any such action on the part of a city, but to consider the argument generally advanced by the representatives of corporations before the committees and commissions mentioned above. This argument I have called the "No Dividend Argument."
In an examination of the work of some of these commissions, more particularly those of Des Moines, Ia., and Minneapolis, Minn., the no dividend argument was used as the strongest card of the corporations. In the first case, the city of Des Moines proposed to build and equip an electric lighting plant, and in the second, the city of Minneapolis, in the act of framing a new charter, discussed in the charter commission the matter of municipal franchises and the desirability of purchase and operation by the city. In both cases the corporations interested protested against the proposed changes and declared that the companies at present interested were not paying dividends. On the face of the argument, there seems to be no reason to question the statement. But, after all, what does it mean, and why do business concerns evidently prosperous pay no dividends?
An example of my meaning may be seen in the relative position of two great railroads. The Great Northern Railway has paid dividends on its stock, under the present management, with considerable regularity. The cost of the road was in the neighborhood of $29,450 per mile; the bonded indebtedness per mile is $24,230. On the other hand, the Northern Pacific Railway has not paid dividends on its common stock for any considerable time, and its bonded indebtedness is twice that of the Great Northern. The preferred stock of the two roads is quoted as follows: Great Northern 136, Northern Pacific 60%. These two roads are competitors from St. Paul to the Pacific coast. One was built upon a business basis, the other upon a speculative one.
Still another example may be seen in the table given below of the capitalization and actually paid-in capital of the street-railway companies of
1 Preferred stock Jan. 7, 1898.
Connecticut. The following report of twenty-six companies in that state was printed in the New. York Evening Post and afterward in the Springfield Republican (weekly ed.), Jan. 16, 1897. The original source for the compilation is found in the report of the Railroad Commissioners of Connecticut for 1895.
The percentage of stock issued other than for cash is seventy per cent. This is an astonishing fact, indicating that franchises in that state have been issued without any regard to the rights of the public. In addition to this is a bonded debt amounting to $8,690, 100, which shows plainly that the cost of the roads has not been defrayed by the stockholders, but by the proceeds from the sale of the bonds. In the course of time the watered stock will pass into the hands of innocent purchasers at a fair valuation, so-called. The several concerns are too heavily capitalized, if the stock outstanding is any criterion, and it probably would be an utter impossibility for businesses twice as large to meet the obligations and to pay dividends on the stock.
Just how, then, the holders of common stock in a corporation which has been equipped by an excessive issue of bonds or stocks can expect to get dividends is a little hard to see. The dividends which would ordinarily be paid to the stockholder are eaten up in the fixed charges of a bonded indebtedness. If a concern is equipped and operated entirely
upon the funds secured through the issue of obligations, and the stock has been issued, either to the holders of the bonds or to a few promoters of the enterprise, without any actual payment on the common stock, only a very small dividend could be expected in a most prosperous undertaking. Even then the dividend would be of the nature of insurance against risk, and not interest for the use of money.
When, therefore, a corporation presents an argument that it has not paid dividends for many years, there is no good reason for accepting it as prima facie evidence that the corporation is not doing well. The statement, if followed up, would probably disclose the fact that little or no stock had ever been paid for by the original members of the concern, and that the entire plant of the corporation was constructed and equipped by the proceeds from the sale of bonds. Stock was then issued to the originators of the plan, placed upon the market, and sold to the present stockholders who are, in one sense, innocent purchasers. They, the last holders of the stock, wonder why no dividends are paid, but in actual fact the returns from the operation of the plant go to the actual investors, namely, the bondholders, who are the real investors in the business. The stockholders are simply the possessors of superfluous obligations which represent, in too many instances, not an actual investment, but the payment to promoters who have by a lucky stroke "unloaded."
Hence it would seem that the "no dividend" argument is not to be accepted without an actual investigation of the condition of the concern putting forth such a plea. Just how long and how far this kind of financiering is to be carried is difficult to say, but certainly the state owes it to her citizens to insist that every quasi-public corporation shall give to the public a certified report of its condition. Neither should the state nor a city grant indiscriminately franchises of great value to corporations without a thorough understanding as to the amount of bonds and stocks to be issued. These restrictions, with the added responsibilities of directors, may bring about some betterment of the situation.
UNIVERSITY OF MINNESota.
FRANK L. MCVEY.
EX-PRESIDENT HARRISON ON MUNICIPAL OWNERSHIP.
IN an interview, Benjamin Harrison, Ex-President of the United States, seems to favor municipal ownership. He said to the New York World:
"Of special importance are the safeguards to be thrown about the granting of franchises to the promoters of great schemes for the public service. In this respect there are valuable lessons to be learned from late foreign experiments. Some of the principal cities of Scotland have assumed each the control of its street railway systems and its lighting plants, as well as its waterworks. The results of this public ownership of great public enterprises have been exceedingly satisfactory and in
structive. I am inclined to consider municipal ownership as the best means to secure to the people the cheapest and best service. Of course, the effects of competition between private enterprises are not to be lost sight of as far as they increase quality and lower prices. But the usual methods of selling franchises outright or in receiving for them a royalty seldom give the people more than a tithe of what the people themselves later return. The bigger the price, the larger the royalty-the greater the cost of a ride or of a gas-jet. It is a species of tax."
THE GLUCOSE TRUST.
ONE of the most cruel of trusts, inimical to the best interests of society, and full of contempt for law and of hatred for men, is the glucose trust, formed within a year in Chicago. It was a combination of the interests of six competing plants,-the Chicago Sugar Refinery, American Glucose Company, Peoria Grape Sugar Company, Rockford Sugar Works, and the Firminich Manufacturing Company. The capitalization was for $14,000,000 preferred stock and $26,000,000 common stock. It was incorporated under the laws of New Jersey, the hiding-place for corporate criminals from other states. The real purpose of this combine was to make the public pay more for syrups; its ostensible object of course was highly philanthropic and benevolent,-to employ more scientific chemists, to reduce cost of production, etc., etc. It was denied that the American Sugar Refining Company had any hand in this combination, alt hough one of its leading men was a director in the new company; but within a year the cloven hoof appears. The price of syrups to the consumer at once advanced, and the burden was thrown principally upon the poor, because the wage-earner who must earn his bread by the sweat of his brow consumes as much of the necessaries of life as the rich man. The laws of Illinois were not favorable to combines; hence the shelter of the New Jersey statutes was sought. The war against Spain must be followed by a relentless war against unlawful corporations. Z. S. H.
THE CHICAGO ICE TRUST.
ABOUT two years ago we had occasion to speak of the ice trust that was then formed in Chicago. Ice was advanced in price from twenty-five cents a hundred to forty cents to the consumer. Now the trust has become a formidable and permanent reality by becoming incorporated under the name of the Knickerbocker Ice Company, with a capital of three millions of dollars, and owning the lakes in Illinois, Wisconsin, and Indiana that are nearest to Chicago. Freight rates from more remote points will cut off competition of course.
When the trust was formed it was given out to the public that the purpose of the combine was to reduce the costs of production and distribution, but not to increase the cost to consumers. This falsehood has come