It has frequently been asserted by merchants and shippers that the stock issues of the express companies are merely a device to make possible the exaction of unreasonable charges. Perhaps the most direct case in point is that of the Pacific Express Company, organized in 1879 to do business on the Union Pacific and Gould Railroads. Before the Indiana Railroad Commission John A. Brewster, auditor of the company, recently testified that there were twelve stockholders and $6,000,000 of stock. On pages 784-785 of the record there appears this colloquy: Q. What did you do with that stock, Mr. Witness? A. The capital stock was given to the Wabash, Union Pacific, and Missouri Pacific for the rights, franchises. Q. For what rights? A. Franchises and rights to do business. Q. We begin to understand it; it wasn’t understood before that; nothing was received by the Pacific Express Company for the issue of this $6,000,000 of stock? Do these railroad companies own the stock? A. Yes, sir. Q. These twelve stockholders are the railroads. The railroads get these 6 per cent dividends on the stock? A. Yes, sir. Before another State Railroad Commission an officer of the company stated that so far as he knew and so far as the records show no cash was received for the $6,000,000 stock. The Illinois Railroad and Warehouse Commission has decided this stock was issued in fact and in law without consideration. Ostensibly the stock was issued by the express company in exchange for the right to do business over the lines of the railroads, but all the express companies pay a fixed percentage of their gross receipts, ranging from 40 to 57½ per cent, to the railroads over which they operate. On the question as to whether express companies operate at a profit or not, Mr. Atwood writes as follows of this same Pacific organization: Whatever legal view we may take of this curious stock issue, there is no room for doubting that it has served as a device for the extortion of money from the shipping public, for express charges are made high enough to more than pay dividends on the stock. Starting in business with no capital except such as may have been temporarily loaned to it by the railroads in control, the Pacific Express Company has paid dividends of $8,334,000 in twenty years and in addition has been paying to the railroads, which owned all its stock, about 50 per cent of its gross receipts of more than $7,000,000 a year. A large block of the stock recently changed hands at $200 a share, and yet we have seen how it was issued without consideration in cash or property. Indeed it is said the company operated for eight years before the stock was issued at all.