New-York daily tribune. [volume] (New-York [N.Y.]) 1842-1866, 1860-02-11
LETTERS From THE PEOPLE.
EARNINGS ON CAPITALIZE NEW-JERSEf
MONOPOLY.

EARNINGS ON CAPlI8L-iub 49,
MONOPOLY
TOas Esi1sC Tas ~ \ T'Sun@
SIR: Il generally considered iAr inu'A VI 'ue
p,oaoerity of an incorporated institution lou' Vocs NOV
- -. 90 bs col when bank, insurance, man
1'.,.,,5e, Sas railroad canal, or other company,
80. dividend equal to- or in excess of, the usual
- A. interest ruling in State. But the rate Of div
Hend il not alwsys tue exhibit Of the bona fde
earbipgs Of the company. The institution may have
owned. in a good location, or in a growing place,
la50e surplus of land beyond its wants or have mined
large surplus of cosl or made an unusual quantity Of
irOD m one year. beyond it's usosl supply, and by sell
ing il of At high prices have the ability for year or
twotop sy larger dividend than Usual. sight par
tieuarFze some cases, person looking around to hno
SURF and profitable investments entitled to knew all
the, ciJstaDces connected with the affairs OF an ~
suon before he invests so as not to deceive ninSei'
in bp,,nO stoA. dividend Just declared Of six per
cent for Fix s1ontbs by the JOINT rompanles IN new,
Jt,ssv known an the Camden and AnbOy Railroad ana
I,,a,o o5 Rsr,an Canal, is proper illustration OF
mn, fepafks making - per cent for the year 1913,
,yps, S.,or cent for 1853. That 20 large dividend
=, H. o, stoek was earned will be shown 1t Is pre-
sro6 :, their report to the Legislature, which Is
.ue,y ,sde about this time. If take the dividend
a criterion for either year. the stock should CON-
nana e sroe premium IN the market. But then, be-
fore invest in this stock, have to look into the
AFFAIRS a these Joint companies. Their means are de-
6ysd S.om their monopoly position in that State tor
carving messengers and freight between New-York
s5dpbladelpha and In the coal and other TRANSPORTS
fson. rhrouob the canal. also find that they owes
bor3od debt for more than twOthiIds of their Joint
anial If this debt were turned into stock, and be
Eal5e TO State tax as ought to be, and as other
eaIital in the State is the net earnings would then De
distributed in vidends sum exceeding Sl2OCOsUO,
instead OF ess than ODehird that sam, or SJ,19SHOO,
aha nrse pt amount Of the stock OF the eompanies'
Nv borrowing at fortunate times two-thirds OF the
espital. for which q rate Of interest of and per
cent n raid thebaance Of the earnings is made to pay
~ one year g. and the next - per cent per snHun on
the stock paid in. The question then arises what Is
che average earnings on the whole capital in use by
the Joint companies If am 70 take the dividend OF
10 percent as correct and representing the net earn
ines after paying interest on their borrowed capital
have 10 20 through a course Of calculation the data
for which is furnished in the share and bond st Of
The american Railroad Journal. from which lquote;
The amount Of stock Of the Camden and Aboy Rsrosd and
slsss sd Rsrsan Canal Companies Ga 400
The total de9 Of which some i, termed TqTigag s ses s
golo y9gRat ssys5s Psys9e Is ieos; r,sv., 600
Due a6,..I g6t q eeni snnas - 5S
DOe ls4 sS5O 3. Cen, snnsI 2si
To.Sdset e55s5oo TO'in'ore''.. & :s g go s.S
Estrmas net Earnings appropriated to dividend and 600 ~
irsrssf s6s6Ss
TIE Joint Companies have guaranteed the bonds Of
The sBeividere Delaware Company 10 considerable
mount a. il is anauxiisy road cOnnectipgat Trenton.
Debt il considered by sober, careful people AZ a
calamity. whether owed by States, counties, ciie',
oomssnes or individuals and the only ultimate safely
20 70 large sninteresi as have been considering, IN
internal improvements supported by contingent
monopoly which viii in afew years come to sn end
y It's own Imitation Is, in my opinion, 20 convert the
debtspbo sock II will be noticed that provision is 70
be made BY the Joint companies by 1864 70 rensw about
four millions of its bonded debt now bearing and
cent interest Better by lar that they sell stock II
thSy eetnO mere than par for IT, 10 pay ii or aud not
neootste for wal Of the debt. do not cay that
Il per cent on the stock is other than apprOxima-
zion 10 the true amount of net earnings after paying
interest on the bonded debt But, tue superficial
reader may draw the conclusion that the stock is
good investment at 81 for Of stock, he will have y
NIKE allowance for the cheap Of some OF the cap
Isl snpIoJedby aseeFtainmg what rate Of interest on
600 wiz PFC duce t947 600, the supposed aver
age net earnings on the capital employed. This ia
found 70 be GU per cent II my conclusions DC cor
Ieet We have the fate Of the New-York aud Erie
Company before our eyes, where threefourths Of ts
capital was borrowed money and Of the New-York
Central Company, where more than one-halfis of the
ssne character Of capital, weight which bears down
upon the market value Of the stock ! say, them to
the joint companies, enlarge your capital stock TO be
enabled to pay oyour de1t and sell out to meet i'
year aher year, as the Debt comes due. Il will be
bought home for investment the State will get more
revtnue from taxes on H. and you will be at when
your monopoly right comes to an end.
PRUDENCE.