Show RAILROAD PROFITS TO 7 PR I 1 THAT IS THE POLICY PURSUED I 1 BY JAMESJ JAMES J HILL even that high rate of interest is not enough to absorb the sj I 1 profits JB I 1 st paul aug 1 1 during a hearing bearing before the state railroad and warehouse commission on merchandise rates in minnesota R 1 I farrington vice president of the great northern northern railway made the statement that no matter how great the earnings of the great northern railway president J J hill had laid down the rule that stockholders should never receive a higher dividend than 7 per cent mr fr farrington also said that improvements were paid for out of the surplus until a new issue of cf stock beca became m 0 necessary ne when stock was issued in blocks of mr farrington was asked by commissioner staples what became of the realized for the sale of stock vils this goes back into the treasury to make good the expenditures for improvements prove ments made from the surplus sald said mr lar farrington and to pay loans which are frequently made for a short time 11 it if you use the surplus for the construction st of new lines asked M mr r staples where do the stock stockholders stockholder holde r get their money the stockholders dont get the money back for their stock was the answer their money moner Is an investment they get only the interest J J hill has always made it a rule that not more ore than 7 per cent shall be paid jn in interest on stock the use of surplus for new lines Is simply a temporary us use e of treasur treasury 7 assets borrowing as it were from the surplus until the stock Is later sold if you were to build miles of new lines in minnesota where would the money come from asked mr staples eventually eventually from subscribers for now new stock was the answer mr fr staples gave it as his opinion that the method demonstrated that profits were too large some flecus caused Uma 1 matter Ater to bei bet looked up and I 1 0 0 that the Great no northern now had a surplus raf ot diore more thane than I 1 the profits should never permit of the accumulation of surplus was mr staples parting shot on the subject mr farrington was asked why it was that when new stock was issued it was not sold at or at its real i market value instead of at par mr farrington then made adde the statement as to the method of the present con I trolling stockholders continuing to se cure control of the new stock at a small figure when stock is issued he said we have a rule that every stockholder may pur purchase chaze one share of now new stock at par for every five shares of old stock already held |