Grand Rapids Herald-Review Newspaper, November 5, 1898, Page 3

= Pd WEALTH AND POLITICS The Evils of Over-capitalization and Escape of Corporations From Taxation. COUNTERFEIT CAPITAL VS. “SOUND” MONEY Immense Drain on the P. roducers From the Com- bines and Watered Stock—Illustrations at Home and Abroad—Only Relief Is Political Revolution —The Party Fostering the Present System Must Go, and Go Now. There are grateful signs that the peo- ple of Minnesota are getting their eyes open regarding some of the great bur- dens upon them traceable directly to bad legislation and maladministration. While our matchless leader John Lind is presenting these in his great speeches more or less in a general way, owing to the demands on his time and labors, the Reform Press can emphasize what our leader is doing and can give details beyond the bounds of limited speeches. In the past year the people have had a great awaokening, from the feardess action of Judges Canty, Buck and Mitchell in the Steenerson case, and in the taxation decision under the Ander- son law, Our producers should not tire of studying these cases and should show their appreciation in untiring ef- forts for the election of our candidates. Net stopping here those cases, however, it is the wish to call attention to what one of the ablest of Minneso- ta’s economists has called “false capi- tal,” or what others call “over-capital- ization,” and still others use the gen- eral term of “watered stocks.,” and kindred to it the escape of property from bearing its just share of taxation. One of these subjects has been em- phasized in the success of the Lowry corporations of the Twin Cities in escaping a raise in valuation by the Republican board of equalization, the iniquities of which have been noted by the state reform press with more or less details, but which cannot be too strongly placed before the masses of the people. The following facts were brought out regarding the Lowry fran- chises and corporations: The Lowry Corporations. The Minneapolis street railway was capitalized at $5,000,000, the St. Paul street railway at $5,000,000 and the old Min polis, Lyndale & Minnetonka i at $385,000, all of which stock was issued, and all of which companies are consolidated in the Twin City Rap- id Transit company. The latter has an authorized capital of $20,000,000. The ; home companies were organized under the laws of Minnesota and the Twin y company under those of New Jer- Of the Twin City company’s au- ized stock there has been 00,000 of common and $1, of preferred stock. lines The mileage of the Hennepin county. Ramsey county .. TOGA so o:0:0:4 54:30: 010: 50g vee am sea ay 223 There is no statement giving the number of its cars or the details of its other property, but the attempt, led by | the Twin City Guardian, was to have the state board make the total assess- ment of the Twin City company some- thing near its rightful share of the public burdens. On the question of valuation it was shown that it should be based at least on the earning capac- ity of the corporation. It was shown that the gross earnings, by the com- | pany’s own statement filed in New Jer- sey, ia the year 1897; wa: Hernepin county . -$1,193,447.43 Ran.sey county .. 815,673.55 Total .........0decees $2,009,120.98 Total operating expenses and all other expenses for the year ......+-+66+ $1,002,0S0.38 Net earnings for the year...$1,007,040.60 The official statement of Attorney General Childs was that the net earn- ings of the company were $235,133.74, AFTER PAYING ALL EXPENSES OF EVERY KIND AND INTEREST ON OUTSTANDING BONDS, SAID TO BE $10,000,000, AND DIv- 1DENDS TO STOCKHOLDERS ON THE VAST AMOUNT OF OUT- STANDING STOCK, THAT SUM BE- ING A NET SURPLUS. Street Cars Are “Wagons.” Further, it was shown that the cars are taxed on a valuation of $10 each and are classed as “wagons,” against the valuation of $42 for the real own- ers of such farm implements. It is also to be considered that, although the Minnesota statutes require the assess- ment of the trackage or mileage of rail- ways, there is no such assessment of | the Twin City company. Notwith- | standing this showing that there had | been a net surplus of more than a quarter of a million of dollars, after | paying all expenses and interest on stock and bonds aggregating 26,000,000, what did the company set up in their efforts to escape a raise in assessment? Why, that the outstanding stock and ‘bonds did not represent the value of the property, notwithstanding that it had earned interest on the total, but that there had been a great outlay, cov- ered by stocks and bonds, beyond the real or proper cost of the property. THAT IS, IF A FARMER IS TAXED ON A FARM FOR WHICH HE HAS PAID TOO MUCH HE MUST HAVE ITS VALUE REDUCED, NOTWITH- STANDING THAT IT EARNED HIM FULL RETURN ON THD OUTSIDE COST. But more. The Twin City company’s agents showed that they could reproduce the Twin City prop- erty, which now represents $29,000,000, for the sum of less than $3,000,000. But the company’s own balance sheet, in its financial statement for 1897, showed that it valued its roadway, equipment, real estate, tools and ma- chinery at $14,288,584.46. It is known that it has cars (“wagons”) to the number of over 1,000 in Minneapolis | and 600 in St. Paul. The taxes are not | made up in New Jersey, for it paid there, under the New Jersey laws, $4,557.36 for 1897. ‘There is no assessment on the valu- able franchise for Minneapolis, and but $300,000 in St. Paul, though the fran- chise has got two generations to run! It is but an incident that the Twin City company was upheld by the Re- publican state board, by what means is best known to itself, and the assess- ment remains based on a valuation of $1,426,695 for both Hennepin and Ram- sey counties, and that its reports showed that it had a cash surplus of $220,170 for the year 1894, $258,479 for 1895, $299,998 for 1896. and $235,133 for 1897, or a total of $1,013,780 for the four years, which has also escaped the assessor, either as money in bank or elsewhere. The point sought is that feated. The valuation for taxation re- mains at $2,300 per mile. But in fact, the capitalization of the company is $40,000 PER MILE, ON WHICH ITS PREVAILING RATES’ FOR FREIGHT AND PASSENGERS ARD EARNING THE REGULAR RATE OF INTEREST. é Railway vs. Farm Taxation. Hon. S. M. Owen has publicly called attention to a circular recently Issued by certain railway interests on this subject, stating that the railways in 1897 paid fhe enormous sum of $43,- 000,000 in taxes in the United States, or nearly one-half of the total income available for dividends. The national census of 1890 showed that but 39 per cent of the real value of property was taxed in that year, and the average rate of taxation was 1.85 per cent. At this rate the railroads, to pay taxes as other people do, would have paid 1.85 per cent on $4,680,000,000, or $86,580,- 000, which is twice the sum they claim to have paid. The farmers of the United States paid in the same year $116,365,000 of taxes, OR NEARLY THREE TIMES THE TOTAL PAID BY ALL THE RAILROADS. AND YET THE TOTAL VALUE OF ALL FARMS \IS BUT TWENTY-FIVE PER CENT MORE THAN ALL THE RAILROADS. A farmer in the southwestern part of the state thus puts the case: “While in town to-day my merchant told me that three thousand farmers in this locality raised an average of 1,000 bushels of grain last season, or a total of 3,000,000 bushels, which cost them an average of 9 cents a bushel to get to market, or $270,000 for the entire crop, and as it was carried on railways capitalized for over three times their real cost, we were mulct to the tune of $180,000. IN OTHER WORDS, HAD THESE ROADS CARRIED OUR GRAIN ON THE BASIS OF THEIR ACTUAL COST WE WOULD HAVE PAID 3 CENTS PER BUSH- EL, OR $90,000, INSTEAD OF 9 CENTS, OR $270,000, WHICH WOULD HAVE LEFT US $60 EACH, iMiss Counterfeit Capital — ‘| know! am false but to you | am true my dear,” the dif nce in the real value of the property, on which it should make re- turas and bear its proper share of the burdens of the state, and the total amount of capital stock and bonds—in this case the enormous sum of $25,000,- 00U—on which its charges of 5-cent fares has, as shown, earned interest, 1S WATERED STOCK AND BONDS, FALSE OR COUNTERFEIT WEALTH, The Steenerson case applies to this state of affairs and fixes it so that hereafter, wherever the point is raised in this states CORPORATIONS CAN- NOw CHARGE RATES ON THIS FALSE WEALTH, OR OVER-CAPI- TALIZATION, BUT MUST BASE THEM ON THE REASONABLE VALUE OF THE _ PROPERTY, WHICH IS WHAT IT WILL COST TO REPRODUCE IT. The people have no quarrel with the corporations, their own creatures, but with the abuse of the privileges grant- ed them they may justly deal. It isa hopeful sign, as in the Great Northern, concerned in the Steenerson case, that the corporations show respect for the people when the latter assert their own rights. The Great Northern might have continued the battle, and long delayed, by appeal to the United States supreme court, but yielded to the in- terpretation of the law by Minnesota’s honored court, as at present consti- tuted, giving the people an immediate benefit of thousands of dollars in rates j reduced. The application of false valuations or counterfeit capital has been made very emphatic by our sister state of South Dakota, in dealing with the Milwaukee railway. As showing the railway | plan of having one valuation for basing freight and passenger rates on, and an- other for taxation, this case is worth noting. The valuation for taxation for 1897 was on an average of $2,300 per mile. The people claimed that the company’s rates should be based on such approximation value, but the company claimed that its value for such basing rates was much greater, not les than $19,000 per mile, being the actual cost. Judge Garland, to whom the case came on appeal, after hearing all the facts fixed $10,000,000 as the value of all the company’s lines in the state. The mileage being 1,100, this was a lit- tle under $10,000 per mile. The com- pany appealed to the United States su- preme court. This was last year. This year the Populist governor, Lee, led the people in their effort to have the valuation of the company for taxa- tion raised, and used the same showing the company had made in the former case to fix its valuation at from $15,000 to $19,000 per mile. The company re- sisted, claiming that valuation was far too high. Gov. Lee and the people only asked that the valuation be made an average of $5,000 per mile. As in the Lowry case in Minnesota, the company ; — OR $180,000, THAT WENT INTO THE POCKETS OF PROBABLY NOT MORE THAN SIX MEN. When we contemplate a system like this op- erating in every other county in the United States, is it any wonder that we are in the midst of mortgaged farms, carpetless, curtainless and bookless homes? I OFTEN WONDER HOW MANY FARMERS ACTUALLY SE WHAT VICTIMS THEY ARE TO IMAGINARY CAPITAL. One thing is certain: votes indicate that a good many of them don’t see it.” Another thing is certain, and that is that thousands are seeing the point who have not seen it before, and noth- ing has opened their eyes more than the Steenerson rate case and what has recently been seen in the Twin City case. Things to Remember. A statistician, estimating the wheat yield of Minnesota and the two Dako- tas for 1898 at 200,000,000 bushels, says its transportation to market over over-capitalized railways will cost the growers over $20,000,000, of which $13,- 000,000 goes to pay interest and divi- denus on counterfeit capital. What patiert, uncomplaining farmers, in- deed. THE DEMOCRATIC AND PEO- PLE’S PARTIES OF MINNESOTA STAND AS THE DEFENDERS OF ONE HUNDRED-CENT DOLLARS, BUT ARE OPPOSED TO TAXING MUSCLE, BLOOD, BONE AND BRAINS TO PAY INTEREST ON THE MILLIONS OF NO-CENT DOL- LARS CREATED BY THE RAIL- WAYS OF THE STATE. Je Farmers and others who like to toil and sweat and sweat and toil in the in- terest of the holders of bonds and mortgages which represent tmaginary values only should keep right on voting the Republican ticket. The man who counterfeits a genuine dollar three times is a criminal, but he who counterfeits railway stocks in the same proportion, for the “dear people™ to pay tribute to, is a genius. B To contemplate, when paying % cents for a railway ticket, that 6( cents of it goes to pay interest on coun terfeit capital and 30 cents to real cap- ital does not tend to lift the eyebrows and raise the corners of the mouth. Organize, incorporate, secure a fran- chise (monopoly). Invest one good, genuine dollar, capitalize it up to four dollars—by creating three imaginary (counterfeit) dollars—and you have all the requisites to become a modern cor- poration magnate and to “prosper” under the Republican system of legis- lation, which fosters the trust and the combine while destroying the small dealer and pauperizing the producer. “Do you really think you love my daughter as a husband should?” Nee eer al aoe eae TOGETHER WITH FREE COIN- AGE OF SILVER, Would Quickly Rid Us of Wall Street Rule, Low Prices tor Farm Products, Idle People and Hard Times. The single gold standard must go. It is the real cause of all our woes, of all our wants, of all our misery and of ‘all our poverty. As we are today we ‘have the worst currency laws of any civilized nation on the globe. AS ‘these laws now stand on the statute books, they are mere financial play- things for the bankers, the money lenders and the Wall street syndicates, and they play battle-door and shuttle- cock with the financial treasures of the nation while poverty stalks through the land. If we had the free coinage of gold and silver and all the paper currency issued by the government, and banks established by the government for the use of the people, we would soon be rid of Wall street gambling, low prices for all the farmer has to sell, idle peo- ple and hard times. The hundred mil- lions of silver our mines would then produce would be converted into money for the use of our own people in place of being sold, as at present, to London Jews to speculate with in Asiatic countries. Our silver product would be worth twice its present val- ue in.the world’s markets, and all our products would rise with it as they have fallen in price with silver’s de- monetization and fall in price. Government banks would relieve the treasury of the millions of money stored in the vaults and taken out of circulation, which helps to beat down prices and cripple business. The taxes collected by the government would be placed in its bank on deposit and be kept in circulation, as the deposits of the people are kept in circulation. The officers of the banks would be paid as other officers in its employ are paid, and no stockholders to divide inter- est among, which is wrung from the business-doing people under the pres- ent private corporation banking sys- tem. The government banks would insure safety to the depositors, who are now at the mercy of thieves, who rob them frequently. There could no financial panics oc- cur under a system of government banking. No money would be loaned on doubtful security, or to “finance” speculative enterprises, and the vol- ume of currency would keep pace with the demands of legitimate business, always enough to meet that demand, gauged by the security offered to war- rant the payment of loans at maturity. (The millions, aye, hundreds of millions of interest that go into the bankers’ till would be left in the pockets of the people, the government charging only sufficient to defray the expense of con- ducting the business, which would be about one-half of one per cent. Our modern silk-hatted gentry, who collect interest from the toiling public, and watch every man’s financial con- dition, order him how to vote and chaperon him in every election cam- paign, would soon be out of a job and would have to seek some other em- ployment or starve. With government banks in place of our present system of private banks, called “national banks,” the people would save nearly all the interest they now are robbed of in the course of business; the corners that are now run on money would be prevented, and no more rot would fill the daily papers about “sound money” and the “danger- ous greenback,” that one “weak point in our finances.” The bankers’ asso- ciations, which meet at short intervals between to discuss money and tell their audience and the n®wspapers that ‘a half dozen “financiers” with a ma- chine called a bank can issue far bet- ter and “sounder” paper currency ‘than the government, would soon be a {thing of the past. ‘We would get rid of the nauseating rot which these gentlemen utter over their wine and cigars. The money ‘question of this country will never be jsettled until it is taken out of the thands of these gentlemen who have be- ‘come the bunco steerers of the nation. They now have a bill in the house ‘which is the grandest and most auda- cious bunco bank bill ever concocted. [It proposes to take charge of the busi- ness of the country and direct every- thing, both government and people. This bill which the bankers have foisted or to the Republican party and made sponser for it, is the most in- famous ever devised by the plunder- ers of modern business. \E. E. EWING. MONKEYS AND MEN. duman Follies Which the Animals Are Not Guilty Of, Go to the monkey, thou voter! Con- sider his ways and be wise. Do the monkeys pay ground-rent to the descendants of the first old ape who discovered the valley where the monkeys live? Do they hire the trees from the chimpanzee who first found the forest? Do they buy the cocoanuts from the great-great-grandchildren of the goril- la who invented a way to crack them? Do they allow two or three monkeys “Love her? Why, I would give uj | to form a corporation and obtain con- my bicycle for her.” (No cards.)\—New York Herald. trol of all the paths that lead through the woods? Do they permit some smart young DNR iy song ity, to claim all the springs the forest as his own, because of some alleged bargain made by their ances’ tors 500 years ago? Do they allow a small gang of mon- key lawyers to so tangle up their con- ceptions of ownership that a few will obtain possession of everything? Do they appoint a few monkeys to govern them and then allow those ap- pointed monkeys to rob the tribe and mismanage all its affairs? Do they build up a monkey city and then hand over the land, and the paths, and the trees, and the springs, and the fruits to a few monkeys who sat on a log and chattered while all the work was going on? No, my friend, monkeys have a wiser system of municipal government than that. Although Kipling speaks of them in his jungle-book as “the people who have no law,” yet they have laws enough to prevent the private owner- ship of public franchises. If Prof. Garner, who claims to have learned 40 words of the monkey ‘lan- guage, were to escort some reflective chimpanzee around one of our cities, the professor would find it rather dif- ficult to explain some of the manners and customs of a civilized world. The chimpanzee would be amazed to see a $500,000 house, with 40 rooms, contain only a millionaire and his wife and ten servants, while a $10,000 tenement, with 20 rooms, contained 40 people and no servants, He would be still further astounded to see the warehouse district, where an abundance of everything was stored, close to the slum district, where the people lacked the barest necessities of life. He would be shocked to see an en- tire street railway system, with hun- dreds of miles of tracks, thousands of cars and employes, and carrying millions of passengers every year, ab- solutely owned and controlled by three or four men who never built a car or drove a spike. But when the professor would ex- plain to him that nine-tenths of the people in the city were quite content to endure such evils, and, in fact, grew quite angry with any one who pro- posed to remove them, the chimpan- zee would say: “Take me back to the forest, and may the Good Spirit deliver us from civilization!”—Rev. Herbert N. Casson, Gold Up ana Prices Down. Mr. Sauerbeck’s index number of the prices of commodities for August shows that the downward movement which set in after May still continues. The figure for last month was 64, against 66.4 in May—the highest attained this year. The following table shows the index number for each month of the present year in comparison with the annual averages since 1890: Average of 1891..72|January, 1898. .62.8 Average of 1892. .68|/Feb., 1892. Average of 1893. .68|March, 1898 Average of 1894. .63|April, 1898. Average of 1895. .62/May, 1898. Average of 1896..61|June, 1898 Average of 1897. .62\July, 1898. |August, 1898.. The main single factor in the de- cline since May, as in the previous rise, was the price of wheat. At the end of May the “Gazette” average of English wheat was 47s. 9d. per quar- ter, It has since dropped to 30s, 7d. Movements upward or downward in the prices of other commodities were not very important last month. Ona comparison of the averages of the two great groups of food products and raw manufacturing materials it appears that whilst the average number of the former is nearly 1 per cent higher than at the close of last year, that of the latter is fully 4 per cent higher.— Manchester (England) Guardian. America Becoming a Plates’ Paradise. Henry George, Jr., visiting in Eng- Jand, concludes that the British priv- ileged class regard the United States with friendly feeling. They realize that there is discrimination in behalf of wealth here, and that while the ad- vance of democracy is threatening privileges in Britain, the decadence of democracy concurrently with the con- centration of wealth and growth of colossal fortunes is extending and strengthening them in the United States. It is natural that they should like a country whose producers are so indifferent to their own welfare as to tax themselves in preference to taxing the incomes of the opulent, and that they should wish to preserve it as a refuge to which they may fly and re- tain their privileges when through acts of parliament the British democ- racy have obliterated the privileges they now enjoy. The reason for Brit- ish friendship for the United States is such as may well cause Americans to pause and ask if this is in reality such a government as the fathers of the republic intended and as it should be. ee ee Evils of the Times. Search all history and you will find no age when the robbery of just earn- ings of the masses was more system- atic, more shameless and less resisted than today. There was never a time when the worship of great riches, how- ever badly acquired, was more open than now.—Judge Clark of North Car- olina Supreme Court, No Monopolies There. Iceland has but one jail in the en- tire country, and there are no illit- erates, no tramps, and no sufferers for the necessities of life; and yet the re- sources of the country are very meager and. subsistence is only obtainable by frugal industry, AND TELL THE PEOPLE SOMETHING ABOUT STATE ISSUES. The Republican Candidate Touched’ ‘on the Legislature of 1591, But There Is Lots More for Him to Mention. To Mr. Eustis’ single and only refer- ence to state issues, in his opening campaign essay, to-wit: touching on the Alliance or fusion legislature of 1891, in which Mr. Eustis charged the raising of the tax levy, which is being also prated on by Republican “reform- ers” like Jackson, of Lac qui Parle, Hon. A. T. Ankeny has published in the St. Paul Globe a stinging reply. In his statement, says Mr. Ankeny, Mr. Eustis, either wittingly or unwit- tingly, perpetrated a gross fraud, in suppressing the real facts. Under the long Republican administration and growth of the state the needs had be- came very pressing. That provided $215,000 for a hospital for the insane at Fergus Falls; $105,000 for the sol- diers’ home at Minnehaha; $75,000 for the institute for defectives at Fari- bault; $215,000 for material and ma- chinery for manufacturing twine, tubs and pails at Stillwater, and $80,000 for new buildings at the state university at Minneapolis. Here are appropria- tions, new and extras, amounting to nearly $700,000, and every one of them for objects the most worthy. Five- tenths of a mill on the assessetl valua- tion of the state, of about $600,000,000, produced about $300,000. Yet that leg- is lature was enabled, by that small iu- crease in the tax levy, to give the peo- ple of Minnesota all these worthy im- provements, costing more than twice that sum. Deserves Highest Credit. Had the legislature failed, as its pre- decessors had failed before, to provide: them, it would, indeed have been wor- thy of the censure which is now at- tempted to be placed upon it. Instead thereof, it has received, and is entitled to receive the highest credit therfor. At that time the house consisted of forty-seven Republicans forty-six Dem- ocrats and twenty-three Alliance men. ‘The latter held the balance of power. It is true the Democrats and Alliance men joined in the selection of a chap- lain and speaker, but upon many mat- ters of legislation the Alliance men as often joined with the Republicans as with the Democrats. In fact, the Re- publicans generally voted for the gen- eral appropriation bill, while some of the Democrats opposed it. It was car- ried by the votes of the Alliance men, and to their credit. Besides providing for the binding twine factory, which the Republicans have so mismanaged as to well- nigh defeat its object, that same legislature gave to the State of Min- nesota such laws as the anti-Pinkerton law, the summer schools, the anti- trust law, and many others. In fact, it stands, and must ever stand, as one of the best legislatures in the state’s history. For a man in the position of Mr. Eustis to attempt, at this late day, to make political capital out of an act which provided for the poor and un- fortunate, as well as for higher educa- tion and the reformatory interests, is an act which deserves and should re- ecive the condemnation of every hon- est man, Chance for Eustis. : Let Mt. Eustis continue to give some attention to the interests of the suffer- ing and ring-ridden state. He will find plenty of matter to engage his at- tention. Let him quit treating about the blessings of a high protective tariff and the banker's sound money. Let him leave the Philippines and come nearer home, what has he to say on the all-important charges which the reform platforms briag against his par- ty for its strict, long and oppressive misrule? What about the fact that in the forty years of such rule, the rail- roads have managed to get control of over 20,000,000 acres of public lands? That the vast and splendid forests of pine timber have been squandered without a pretense of their value? That a single mine, now owned by Rockefeller and Carnegie, and worth fully $20,000,000, was wrongfully per- mitted to be taken from the public school fund? That this one iron mine is worth more than has ever been re- ceived from the sale and sacrifice of 1,500,000 acres of school lands That a public school fund, in itself worth fully $50,000,000, has been so misman- aged that not over one-half that sum will ever be realized? That, until the late decision of the supreme court, yast areas of unused railroad lands were ailowed to remain without taxa- tion, while the burden was thus being made more oppressive to the farmers? That, until the decision by the same court in the Steenerson case, our ship- pers, merchants and producers were obliged to pay freight based on extray agant construction and watered stock? That, until stopped by a Democratic suditor, in 1894, the railroad companies sere allowed to make their own selec- tion of the swamp lands, which had geen generously donated to them by the Republican legislatures? That all oyer the stdte the cry has gone up, long and loud, against the infamous robbery in the inspection of grain ana the charges for elevator and warehouse service? More of Them, Mr, Eustis. That our banking institutions, in a time of panic, were allowed to go un- inspected, and thus rob depositors and blacken the character and good name of the state? That a “political ma- chine,” run by exorbitant exaction in the shape of official fees, has set up and knocked down one acministration after another, and now seeks to in- flict upon the people a new gang? That, in short, every way, this grand old party, while snouting tor the flag, © has succeeded, by means the most damnable, im vetarding the growth and prosperity of the state and inflicting — upon its people evils which can no longer be borne? But few wives who drive their hus — bands to drink have to use whips. Pepsin j } {