The capitalization of the railroads in 1910, represented by securities in the hands of the public, was $14,338,575,940. The return on capital invested in railroads was investigated carefully by the Railroad Securities Commission, with President Hadley of Yale at the head, whose report was sent to Congress by the President on December 8, 1911. What the Commission says in that report tells the story:—
“Neither the rate of return actually received on the par value of American railroad bonds and stocks to-day, nor the security which can be offered for additional railroad investments in the future, will make it easy to raise the needed amount of capital. The rates of interest and dividends to outstanding bonds and stocks of American railroads is not quite four and one half per cent in each case.”
And again:—
“A reasonable return is one which, under honest accounting and responsible management, will attract the amount of investors’ money needed for the development of our rail-
