As these figures are compiled from the only returns which furnish data respecting all the various phases of railway operation in the United States, they will be accepted in subsequent pages as the official returns for 1908.
The above figures are exclusive of returns from switching and terminal companies, whose earnings, according to the monthly reports in 1908, were $23,028,773; expenses, $16,383,481, and taxes, $1,245,261.
Grossly Exaggerated Dividends.
But these are venial variations compared to the deliberate misrepresentation as to dividends on page 62 of the report, where it is stated:
"The amount of dividends declared during the year was $386,879,362, being equivalent to 7.99 per cent on dividend-paying stock. For the year ending June 30, 1907, the amount of dividends declared was $308,088,627."
This statement is the more reprehensible because the inaccuracy of the reference to dividends in 1907 was exposed a year ago, and $115,550,909 of the 1908 total is proved to be fictitious by the line in the condensed income statement of the report (page 65) reading: "Dividends declared from current income, $271,388,453." It takes dividends from surplus, dividends by leased companies, and dividends from surplus of leased companies to make up that gross deception as to the dividends declared in 1908. And all these "several dividends" are only made statistically possible by including in current income $274,450,192 "other income" NOT derived from transportation.
It is impossible to overestimate the harmful popular effect of exaggerating the dividends paid by the railways by $80,693,665 in 1907 and $115,550,909 in 1908. The public mind does not stop to distinguish between dividends "declared," dividends paid out of "income" and net dividends actually paid out of net earnings of railway traffic.
This whole statistical structure of fictitious dividends has been built up in successive reports upon the false premise of including intercorporate payments on both sides of the income account. What the public is entitled to know is the disposition of the gross sum paid by it for transportation services—those services which the Act to Regulate Commerce was passed to regulate.
Bewildering Changes in Nomenclature.