The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-09-10


further allowance should be made for general
depreciation-an item which managers of railroads
are fast finding out to be OF no small Importance
which would seriously reduce the above small balance
Railroad property is deceptive Il il an easy matter
when road is new to pay high dividends especially
whiea construction account In kept Open into which
can be smugglcd sufficient amount Of the cur
rent operating expenses to leave the required balance
for division among stockholders When, however.
the day arrives when no stocks and bonds shall
be issued, and the construction account Il closed
and the road requires all roads must in very few
years. reaylng renewal OF engines, &C., &C. all TO
BE- paid Cor out Of earnings, then the COMPANY with
no surplus on hand noxeseyation made for the extra
ordinary expenditures finds accumulation Of years
OF wear and tear on its hands, with no means to
meet It except to escape paying dividends.
Railroad companies which have for years paid large
dividends. and paid out more than their gross in.
come every year. have ut last been not only obliged
to suspend. but have had TO issue new bonds
for general renewal OF track and equipment
Companies which pretend to operate their roads at
such small per cent of gross earnings, invariably
have TO stop their dividends md increase their debt
to repair their track &C. IF the construction ac-
count Of the Cleveland and Toledo Railroad Com.
pany was closed to-day, it's gross income would be
rapidly absorbed in properly operating and repair
ing the road. The construction account cannot be
closed. To dividend paying company 1t Ia Of tho
highest importance that it should be kept open.
Not railroad in the country could pay more than
two or three per cent dividend per annum. without
q construction account TO take in portion Of the
current operating expenses. The New York Gen.
trail Railroad Company let its track and equipments
run down 10 low, in its efforts TO pay large div
dends, that an expenditure OF $4,000, 900 was re.
quired to bring II up again. for which new issue
Of bonds WAS made, and that amount added to the
company's debt The Stonington Railroad Company
suspended its dividends about year snce to apply
its earnings to relaying the track. The Harlem,
New Haven. Hudson River, Erie, and scores of
other roads, find much Of their earnings actually
absorbed In operating. that dividends are out of the
question.
The Cleveland and Toledo Railroad Is in an un.
finished condition. II Is bat 100 miles long and has
already capital Of nearly a. 600 600 Bonds after
bonds have been issued till there are sieren distinct
classes in the market. The last issue was sold under
65 per cent. What the next will bring is best
known to those who privately parcclled out the last
The ahsurdi,y Of vanng Cleveland and Toledo at is
present market prices will perhaps, be more readily
PcaceNSu W 'omPatWB " VIII nohe btneT rOlus
located In Its immediate vicinity. II Cleveland and
Toledo is worth ~ per cent, we can show that some
other roads are selling at only about oneqnarter Of
their actual value.
The Cleveland. gainesville and Astsbula Railroad
from Cleveland to Erie (ninety miles finished cost
$4,000 900. Earnings for six months, ending July /
s59l 600.
The Erie. Northeast and Buffalo Estate iine) roads
finished, Erie TO Buffalo ninety miles, cost 81 900 900
Earnings for six months ending July, s49s. 900.
The Cleveland and Toledo. unfinished l09 miles
cost s6700.000. Earnings for six months ending
July, 1866, <442, 75s.
Thetwo roads from Buffalo to Cleveland, $50 miles.
cost 20. 10000 Earnings from July 1864, to July
1866. ~, $50 900.
The Cleveland and Toledo. 100 miles, cost 90,
900. Earnings from July 1854, TO July 1855,
t794, 500.
n stronger or clearer illustration Of the absurd.
ty OF paying anything like market value for Cleve-
and and Toledo. Of holding II at present prices.
I wanted, than this, all we can say ia, go in your
blind ignorance and take the consequences. To
place the matter II possible, in still stronger light
il u only necessary 10 show the financial position
Of the Gaiens and Chicago.
Amount already expended on Gslena and chi