The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1858-01-11

] ace of the old United States Bank tbrOL
which il proven that vitality ceased, from the
a moment appliances attempted to produce rege
l. neration through the ordinary means of common
business transactions. In such cases there is pecu
liar species Of scheming necessary to be carried out
such as the initiated only able to put into opera
tionsuch for instance, as unscrupuously rating
good, paper every description and kind, whether
protested not in order with this show of solvency
to justify the making of dividends That railroad
companies should be compelled to resort to all kinds
OF inancierng can create no surprise; the very
ture of these institutions presupposes state of
nigh pressure, and we therefore feel astonish-
| ment when we see announced projects for rails
ing money, which do not tally With the
strict rules of fiscal honesty and discretion This,
however, affords no excuse for the conduct OF bank
\ 'arlors, where the decisions are made on simple
1 p> tiers of fact admitting of no necessity for eqD
vcca ion. and where if any species of chicsnery be
pnctNA ID, the directors know and feel that they
hove l,.a grity Of legal az well as a moral fraud
is otts ry impossible to imagine that the losses
of tie banks. should not be very large through the
hundreds Of I'M llio0s Of dollars of comnercal fail
ures or that the bonJs and stocks of defautng rail
roads, held by them to- m enormous amoust ought
not to be placed to the ebi Of the account of pro6
ties Is of par vaiae-to ke cp up the appearance of
still possessing the capt., VI entire-is but post
penng the evil day of reckoning. was
She case with the Phenix, the Union and the
Mechanics Banks, in 1887, each of which, through
the operation of heterogeneous stimates, continued
to divide up their capital in paying DIVIDENDS, until
they were compelled to reduce the nominal amount
of their shares, have the deficiency filled up by
contributions from the deceived stockholders, who
held on to their investments in ignorance of the
duct Of the knowing managers.
We do not see that we have any prospect OF mmc
date improvement in financial affairs. On the
contrary, We have cause TO look forward for still
greater embarrassments. Tbs banks must, in the
end realize their losses many of the bills receivable
will prove worthless and most of their railroad inter
ests pass of the mere shades of the widest fan
cy's sketch; and therefore, looking to the future
through this medium, there can be no hope for i'm
mediate Improvement. There has not yet APP
peared the first evidence of more favorable
change IN the prospects of internal improvements.
To the well informed, those who venture to examine
with care, keeping record of their position, the flu
| ture presents nothing but the most melancholy
gloom and forebodes with the saddes certainty that
every dollar advanced towards their resuscitation
will prove an additional loss; it will be throwing
! good money away for bad. The fate of most of our
railroads is doomed, and all the efforts now being
made are but proongng the misery and throwing
back the time when we ought to look forward to
return the sober rules and expectations of honest
business transactions If, for instance, the Erie
Railroad Company should go to the wall-and
that it must there can be no doubt-those
who will suffer will be, for the most part, the
speculative resuscitators, who, in point Of fact
l.xSIo obi Ia, xr.,r ant
efforts than the hope of creating market to throw
of the heavy burthen they carry, most nvountarily
The Harlem and the Hudson still continue to creep
along with debts coming TO maturity and in the case
of the former loan for a million has already become
necessary. The New York Central, one of the most
corrupt concerns in the country but lives its ability
to impose on the public creduity. In this instance
covering capital and debt of not less than forty
one millions, we have to witness system OF schem
ing utterly and entirely at variance with every prin
cpe of fair dealing In their elections for directors
the chief managers have q control, little short of abb
solute Introduction to any opportunity to investigate
! the truthful condition of its affairs, such, for in
stance, as TO ascertain by whom and through whose
influence. stocks have been jobbed on the company
as valuable assets whose real value is naught. In
the face of heavy and constant decrease in their
daily receipts, which on the first OF February will
not present less aggregate than s75O,000, and may
be 81 900 600, wasteiul dividend may be declared
| and its payment made by the sale OF the odds and
| ends of bankrupt estate.
The Western railroads are in an equally forlorn
| condition, covered with debt, embarrassed through
entanglements with each other, and through every
section of their lines there has been exhibited per
| feet recklessness of the most mproydent competi-
ton with seeming determination that the end oft this
absurd rivalry IL never to cease. In the case Of
| the Michigan Southern the controversy has been
| so sharp that an unfortunate necessity has
| existed whereby this company has assumed
| not only the cost OF completing five hundred
| and thrtysix miles of road, but has entered
| into q guarantee TO pay large dividends To the
original projectors of large portion OF the dis
tances. In instances, spcculations in produce
have been made, in the hope of keeping mp the APP
parent amount of tolls, but which, instead OF proht,
have terminated in serious losses In referring
] to these reverse changes in the boosted bril-
| liant prospects of our railroad enterprises, we
| entertain the hope that readers will give ihem
that due appreciation which belongs TO that conser-
vatiye necessity of ceasng to look into the imme-
date future for relief and prosperity II is warn
ing worthy the highest consideration, and cannot be
neglected or pushed aside with impunity; especially
when IL is borne in mind that our banks full to
overlooking with these insolvent concerns, obtained
by purchase by direct loans and by deposit, TO Sc
cure debts Of insolvent debtors. One Of the ruling
banks in Wall street located opposite the Merchants
Exchange, holds stock certificates OF insolvent rail
road companies such the Sciota and Hooking Val
ley. on which il has loaned to single concern over
500 600, the original owner and hypothccator ha7-
ing been vctinzed TO the extent his entire capital
and credit, by placing crcdulous confidence in
railroad reports, and IN The intelligence Of bank ad
| ministrations.
The tweniy.third annual report of the Boston and