plus has been used to settle the construction
indebtedness. The surplus has disappeared; consequently the
stock suffers a serious decline. Those who bought on the
strength of the large surplus sell out, on being informed of
its distribution. Then the inside sharks come forward again
and purchase at reduced prices, probably at a depreciation
of from ten to fifteen points or more, and keep their stock
until the next periodical appearance of the bogus surplus.
Thus the insiders grow rich, while the outsiders become
poor. The only remedy for this abuse is a sworn statement at
regular intervals, and if the directors should commit
perjury they would render themselves liable to State prison.
If a few of them should be tempted to fall into the trap,
and be made examples of in this way, nothing would do more
to work a speedy reform in this contemptible method of
book-keeping.

"I would also suggest a change in the character of the
directors. Those usually chosen for this office now are men
who have vast interests of their own, more than sufficient
to absorb their entire time and thoughts. They are selected
mainly on account of their high-sounding names, to give
tone to the corporation and solidify its credit, in order
that the lambs of speculation may have proper objects in
whom confidence can be reposed and no questions asked. The
management of the affairs of the corporation is frequently
intrusted to one man, who runs the business to suit his own
individual interests."

We can appreciate the force of the above remarks when we consider that
last year seventy-five companies realized a gross income of
$846,888,000, which is equal to about 80 per cent. of the total income
received by all of the railroads of the United States.

_2. Free competition upon all railroads._

Mr. Hudson, in his excellent work, "The Railways and the Republic,"
recommends the following remedy:

"Legislation should restore the character of public highways
to the railways, by securing to all persons the right to run
trains over their tracks upon proper regulations, and by
defining the distinction between the proprietorship and
maintenance of the railway and the business of common
carriers."

Mr. Hudson proposes to leave the track in the possession of its presen