ons. In 1891 the amount so
invested was $154,319,240, and the income derived from it $4,852,181.
This does not only cause the stocks and bonds of certain companies to be
counted twice, but exacts a double tax from the commerce of the
country, interests and dividends upon the same capital being paid both
to the bond- and stockholders of the Pennsylvania Central and to the
bond-and stockholders of the roads in whose securities it has made
investments. The income of the company is thus swelled far beyond the
amount which the traffic reports indicate. It will be seen that, to
perpetuate extortionate rates, this process of manifolding securities
might be continued indefinitely.

The cost to its stock-and bondholders of the Baltimore and Chicago line
of the Baltimore and Ohio Railroad, which has a length of 795 miles, was
estimated by the company's officers at about $57,000,000. The actual
cost of this road, owing to its expensive mountain grades, was probably
greater than that of any of the other through lines between the
sea-coast and Chicago, but there can be no doubt that the capitalization
of this road represents from one-half to one-third pure water. At the
time of the completion of this road to Chicago the surplus earnings of
the company, after the payment of interest and dividends, amounted to
over $29,000,000. This had been charged to "profit and loss" and used in
the construction of branch lines. Thus an amount equal to more than half
of the reported cost of this line had at the time of its completion been
returned to its owners in other railroad values.

The Select Senate Committee on Transportation Routes to the Seaboard in
1874 estimated the excess of the capital over actual cost of the Erie
road, from New York to Dunkirk, at $68,807,000; that of the New York,
Lake Shore and Michigan Southern line to Chicago at $115,188,137, and
that of the Pennsylvania and Fort Wayne line to Chicago at $11,290,374.
If this estimate was correct the entire over-capitalization of these
lines, on which the commerce between the West and the East was forced to
pay a dividend of 8 and 10 per cent. per annum, was no less than
$195,000,000. The committee assumed the actual cost of these roads to be
$182,000,000, or about $78,000 per mile. They based their estimate upon
the cost of the main branch of the Baltimore and Ohio, as reported by
their officers, supposing it to represent the actual outlay made by its
stock-and bondholders. Vario