The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1856-11-15

Wall Street and aus Prospects.
On Tuesday last the financial community were
startled by an announcement that a prominent
Western railroad not in the best repute, the Clcye
land and Toledo, had been defrauded in the man
ner that the New York and New Haven road was
by Schuyler---by fraudulent overissue Of stock,
The rumor was quickly followed by contradic-
ton from the officers Of the company, and GER
tain measures, supposed to be preventive Of
fraud, being taken by the President the panic
was allayed.
Il is of course for the public to Judge what
foundation there may have been for the rumor,
and what credit should be attached to the denial:
on the face of the record the Cleveland and To
ledo Railroad Company now appears to be as
free from suspicion as any other financial corpo-
ration. Efforts made by its friends have done more
than face the evil effect Of the rnmor upon the
stock; and it viii no doubt continue as hereto
fore to attract the attention and whet the cove
tousness Of the speculative portion Of the comnu-
nifty.
AT the same time, we have no hesitation in pub
fishing the opinion Of many Of the best Informed
persons in financial circles, to the effect that the
charge which was brought against the Cleveland
and Toledo Railroad Company might with-per
feet propricty be advanced against several pro-
minent industrial and railroad corporations
1t is the belief Of the highest financial authori-
ty that not one, but several of the enter
prises which are classed as prosperous, and
whose scrip is dealt in at the Board Of Brokers
or on Change, are in fact rotten to the core. and
that, like bloated beer-drinkers, they owe their
flush of seeming health and soundncss to the very
canker that is devouring them within. We need
be at no pains to designate instances Every bust
ness mans experience will point out to him.enter
prises which, for years past, have been paying
regular dividends Of six, eight and twelve per
cent per annum, when it is mechanically de-
monstrable that no such profits can have been
earned: when close analysis of the receipts and
expenses mot the public accounts, but the private
ones in the private books, seen only by the d.
rectors) would in reality show On annual loss far
greater in amount than the alleged annual gain.
This is not new subject; but it might as well
have never been touched, so utterly blind TO the
truth docs portion of the public seem. In All
our great corporate enterprises, such asralroads,
two principles have been at work from the origin.
The first of these has been the doctrine that the
country can afford to build its roads and look for
remuneration solely to the advanced value of
the lands opened up. The consequence Of this
principle has been the extension OF the railway
system to an unexampled extent; no thought
being ever taken except in the State Of New
Jersey for the dangers Of competition, and road
being pushed after road until the United States
have more miles in operation than all the rest OF
the world together. Another consequence Of the
same principle has been the establishment Of rates
Of travel not averaging in the Eastern and middle
States two cents per mile per passenger; lower
rate, We venture to say, than is in use in any
other country.
The second principle on which our railroads
have been undertaken has been Wall street
doctrinc-that the returns should be Immediate
and The profits enormous. This principle has
necessitatcd the construction OF oil our roads on
the most haty and cheapest plan, as is apparent
10 any one who chooses to examine the bridges,
culycrts, rails, &c. Of a road that has been in
operation four or five years. Secondly, this
principle has involved many companies in deb,
by leading them 10 pay dividends before they
were earned, and even in some instances 10 pay
interest on stock before the road was even
stocked.
These are The principles upon which our rail
road system has been based. We need not say
that. whatever soundncss there may be in the first.
the ultimate result Of tho one aud the other must
be ruin 10 the companies. This is what renders
such stories a. that in relation to the Cleveland
and Toledo serious and alarming. We know that
many railroad managers must have been
sorely tempted 10 do such things: we know.
too, from experience that whenever fraud has
been committed, the first vague rumor Of the
truth il always coa.radioted with the utmost
energy by the parties concerned. Altogether.
when we reflect upon ihe amount Of money that
must have been lost in railroad stocks within the
past three or four months, aud when we see that
after all no failures have taken place one can
not but look with considerable uneasiness upon
those enterprises With which SPECTATORS are con
Hected.
PROTECTION 10 TEEE NEGRots TRAVELLING
AsEoAn-A few days since we Published dcci-
sion of the Department of State against the
claims Of certain colorcd persons, natives Of this
country, who applied Tor foreign passports rs
s-....sa.u o:.;~orp Tho nnrIicatfop was refused