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38 the dividends on the stock are cut from 8 to 5 per cent. There are less freight and fewer passengers to carry. No new construction work is undertaken; therefore, a quarter of the railroad employees are dropped from the pay rolls. No reduction is made in wages; the wage earner is simply denied the opportunity to earn a living. Interest must continue, else bankruptcy ensues. Dividends may be, and frequently are, cut or passed. Earnings for a considerable proportion of the employees stop absolutely. In other industries, such as textile manufacturing and coal mining, instead of dismissing employees, the establishment is worked two or three, or perhaps four days a week during bad times. The interest on the bonds is, of course, paid. Dividends on the stock may be passed or paid out of surplus. Wages are decreased by the simple methods of part-time work. In short, the incorporation of industry, involving the issue of stocks and bonds, creates a situation in which, during periods of adversity, the chief burden is borne by the employees; and year in and year out, through adversity and prosperity, interest is paid to bondholders. Exactly the same thing is true of the rent of land. In good years and bad years alike, the tenants must pay the same amount. Certain forms of vested income thus continue, while earned income and the opportunity to earn income are dependent on the caprice of industry.

Heretofore the bonds of an industrial enterprise have been looked upon as the stable form of security. The development of law and of public opinion has rendered them ironclad. The United States Commission of Internal Revenue reports, for the corporations coming under its purview, a bonded indebtedness of $34,749,516,354. Here is a fund, which at the very outset will yield at 5 per cent, a billion and three quarters annually.

The same security which now surrounds bonds, is being gradually thrown around stock issues. In days gone by, stock issues were not taken seriously. Today, the right to pay a 6 per cent return on stock—even if