Another illustration is to be found in railway stocks, many of which have (1) been deliberately watered, and (2) risen in price on the market, so that, while railway men are badly paid, the present holders of the stocks are apparently making small profits. Many railway companies have enlarged their ordinary capital by the delightfully simple process of multiplying by two. £100 of original stock has been changed into £100 of "preferred" and £100 of "deferred." This has not been done behind the scenes, but boldly and with the permission of our rich men's parliament. As a consequence it is made to appear that the net receipts of railways are only about 3½ per cent. of their "paid-up" capitals. But the nominal capitals have not been "paid-up"; and even in so far as the original capital is concerned much of it is unreal. Thus the magnitude of the injustice which they suffer is hidden from railway servants. They risk their lives for the public every day and what do they get for it? In 1908, the 27 leading railway companies paid in wages only £30,000,000, or only 25s. per employee per week! These 27 companies own nearly all the railway lines, employ nearly all the railway servants and make nearly all the profits assessed by the Inland Revenue Commissioners. And what do these profits amount to? As I have shown in Chapter 5, they amount to £43,000,000 per annum, or far more than is paid in wages in one of the most dangerous and most useful of all occupations.
It is instructive to note how the joint-stock company promoter calculates the wages factor in forming his plans. I recently had sent to me the prospectus of a gas company, formed to take over and enlarge an existing concern. It began by picturing the fat dividend "earned" by other gas companies, thus:—
The profitable nature of the Gas Companies, and the favour in which their Shares are held by Investors, is shown by the following particulars, which are obtained from the Stock Exchange Official List, Stock Exchange Year Book, and other Official sources:
The Croydon Gas Company pay 14 per cent., and the £100 Ordinary Stock is quoted at £320.
The Wakefield Gas Company pay 11½ per cent., and the £25 Ordinary Shares are quoted at £63.
The Brentford Gas Company pay 12 per cent., and the £100 Consolidated Stock is quoted at £250.
The Staines and Egham District Gas Company pay 13 per cent., and the £25 Ordinary Shares are quoted at £60.
While the Eastbourne Gas Company's A and C Stock pay dividends of 15 per cent. respectively, and the £10 Shares are now standing at 165 per cent. premium.
What all men who live by work and not by dividends should note is, how such beautiful results are arrived at. Inquiry will show that common "gas" is extracted from certain suitable varieties of coal by the hard labour of individuals employed in the handling of the inventions of the dead. It is hard work and exhausting work. If the shareholders, who only stand and wait, receive such princely dividends, what is the share of those who make the gas?
The company prospectus referred to is good enough to reveal the nature of the division of the spoils. Its own statement is as follows:—