It is true that no great sums have been spent from capital account. $5,137,825 in car trust certificates were outstanding on June 30, 1907, and $5,608,000 in general mortgage bonds have been sold and the proceeds invested principally in new equipment, but this is all. Improvements have been made mainly from earnings, and fixed charges have not had to be increased. In fact, the voting trustees stated at the expiration of their trusteeship in 1904 that, eliminating the fixed charges created since December 1, 1896, on account of the acquisition of additional properties and interest upon the additional mortgage bonds issued for the purchase of equipment, the fixed charges of the Reading system were $1,018,065 less for the fiscal year ended June 30, 1904, than they were for the fiscal year ended November 30, 1896.[284] It thus comes about that the finances of the Reading, while not as secure as could be desired, are yet in better shape than they have been for thirty years. Fixed charges, taxes, and operating expenses[285] took 86 per cent of gross income in 1907, but a decline of nearly $12,000,000 in net earnings must precede a default on any bonds outstanding. To this margin should be added the considerable amount by which maintenance expenses now surpass normal figures. An initial dividend was declared on the Reading Company first preferred stock in August, 1900; on its second preferred in October, 1903; and on its common in February, 1905. Four per cent is now being paid upon all classes of stock. Large amounts of Reading stock are held by the Baltimore & Ohio and by the Lake Shore. The Reading has again bought control of the Central of New Jersey, and owns besides a steamship line and something under 500 miles in other subsidiary roads. Its large earnings, its troubles with its mine employees, its influence over the supply of a necessity of life, and the possibility of discrimination which its control of both railroad and coal properties affords, have made it a target for legislative attack from state and national governments. Action was begun by the Department of Justice in 1907 to dissolve the merger between the Reading and the Central of New Jersey. In June of the previous year the so-called “commodity clause” of the Hepburn Act forbade any railroad company to transport in interstate commerce any article except timber and the manufactured products thereof which it should have produced, or in which it should have any interest, except those products necessary and intended for its own use in its business as common carrier. The legality of the Reading’s position in these matters is yet to be decided by the courts. The student may well doubt whether legislative action will ever succeed in preventing the common ownership of the Reading railroad and mining interests. What is more probable is that a strict governmental control will come to be imposed. Against this proper development no appeal to legal technicalities will avail. CHAPTER V