The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-12-06

i
snpsratendents and rreasurcrs, combined in powerf.
"ring," without responsibility to any authority md Ii
denance OF the common law shall continue TO run rail-
ROAD hnes Tor their personal emolument and to make
annua reports which the conhdng stockholders can I'm
oersana about as well as they could II they should bs
written in the Chaldes dialect
10 those who are imperfectly ACQUAINTED with fbs
manner in which railroads are managed tbsrs 4,
something extraordinary and unaccountabe in THAR
meagre show OF net profits and the beggary div dends
y '"oso "h'cn mako dividends at all, large proper.
uon paying nothing, and the companies which reeu
larry pay half yearly three four Ave per cent having
TO borrow money for the purpose disgusting the
oy some hocus pocus, which is a mystery to all but
'ne initiated And this. too, when tho official returns
eAno an increase Of freight and passengers within tho
past ten or twelve years. amounting in some cases IN
over three hundred per cont
railroad Is q public institution II does not consist
only OF president and board OF directors and havv
OF well paid officials The people have something TO do
WIN ~ individuals are induced to invest their money
IN II with the understanding that the laws give them
some security against imposition and gross mlsmanage-
ment The stockholders In road elect board Of d.
reoors, and these directors In their turn elcc.
dent and a vice presidents but all tb,. -. !" wy
pellef that the officers thus chose :, w
to manage the aas m nraey for the advantage OF
the sockbode,. not for their personal emoumen,
proves that there but little substantial
foundation for this beir Tho common very properly
prohibits those who rs ofces and directors OF railroad
stand In Gduciary relation tow-ds the stockholders
from being Interested directly or indirectly in any con-
tracts made with the company they rep.asent But
every days experience shows that this wise jus, pro
vision Of the law is violated with IMMUNITY.
The main lines OF railroad in this state arc the New
York Central and tho New York and Erie Tho stock Of
the former is st a slight premium. That of the lat
ter is at discount Tho central has been paying a
dividend generally OF six 80, 49, !.
statements ~ a. made before the LEGISLATURE
has moi 4, r.ty earned this amount but has only PAID
II by oa,s order to keep up the vaue Oh us s'ocN
Wbv does this condition Of affairs exist ana now
70 4 that road whose earnings have so enormously IN
creased should such crippled circumstances as 10
necessitae resort borrowing TO pay dividend OIL SIX
per cent? Tho is only to be found IN one dree-
..r. There must have been somewhere cuipaoie DIS
honcs.y gross ncapability In the management VI no
business OF Me road
In considering ,he.matter OF railroad managementor
mlsmanagcment in this sate-we select the case of the
New York Central because II ought to be intrnscay the
most valuable railway property in sac country There Is
road similar magnitude that app<oaches II In the
advantages Of the route and the extent ana Importance
Of its connections 1t runs by an easy grade with no
short curves through succession OF thriving cities ana
villages from tide water to Lake Erie distance Of loss
side lines branches to the length in all Of about i've
hundred and fifty miles Its great rival tho Erie has
line four hundred and sixty eght miles In length run
nng over and around mountain ridges and activities,
curves SO sharp as TO call for more than with
double the amount Of motive power required on the
Central While the freight facilities Of the Erie are OK.
celent the local traffic Of the Central largely exceeds
that OF rival and the cost Of labor and material with
| the single exception OF fuel is about the same TO
superficial observer the stock Of the Central should DO
worth nearly twice rs much that Of the Eric The
fact that both should bc from their several advan
agcs good paying roads under prudent and honest man
| agement, such q competent business man would give
to his own AFFAIRS yet the stock OF the Central is In
atty worth about par, while the value OF the Erie Is
| much less.
Thirteen years ago. when tho several roads that
compose the Central consolidated, and passed IN
der one management, the stocks Of those companies
| commanded large premium In tho money markets Of
tho country. Tho Utica and Schenectady road was hy
per above par the Syracuse and Utica thirtyscve
per cent tho Rochester and AUBURN about thirty The
average premium OF tho stocks Of the several roads
turned in to tho consolidation thirty per cent
After consolidation the stock OF tho Central touched
hundred and twenty per cent but II has generally
been below par and At timo down to fifty three.
Al present a. we have said, taking the amount OF
dividens consideration the stock Is worth about
'par But meantime. the earnings OF the road have In
creased twelve years. nearly three hundred per cent
In 1885, total earnings g. 600; and In 1855
sl4 OOO 000 The running expenses have increased, Of
course, but certainly in no comparison with tho IN
crease OF the earnings The average dividends paid By
tho road boon less than seven per cent aud this
wo are tocredit tho officials Of the company has only
been accomplished by resortng to loans Can any on
doubt with all the superior advantages enjoyed by tn
Central that judicious and honest management wou
have secured to the stockholders regular dividend
ton per cent and have kept the stock steadily at ieas
thirty per cent above parf
The management Of the Central Railroad has boon 70
many years In tho hands OF Eraus Corning, OF Albany
and tho late Dean Richmond Of Buffalo. For lon
period these two railroad magnaes pulled together IN
former being President and the latter Vice President
1 tho company But few years ago breac
took place between them, and the late Dea
| Richmond in his customary blunt and ON
pha,s way, denounced The management Of MI
Corning as being directed towards the prospect,
OF Albany aud the cmolumens Of friends and conno'
tons In the trade and i other branches OF busnos
rather than guided W proper regard 60 the Interest
the stockholders This bfeach resulted IN the dsplac
81 Ernstus Corp,ng md the substitution Of de
Richmond ~ the +. esIdent 81 tho road. The btten
Of tho sht was however, only know, TO those who w
directly nte' ested n one or OTTER Of the belligcren
As soou' Dean Richmond obtained control Of the ro
W. oe batch Of once holders who had served - 70
up ..or Mr. Corning waE glsplssea !ss sapcrIntcndc
the treasurer tho counsel the general ticket agent anS
hos, Of other officials their heads under their ar
and left the employ Of tho company Tho complaint
at Dean Richmond against tho Corning management '
that the road had made subservicnt 10 the ntcre
Of locality and Of personal freads and connections
was alleged that at Albany tribute Of about nifty co
per ton extoed for carriage on all freight pas.
e tho road which might have boon saved by rum
r. track to the wharf In summer, and by using tho
a. bridge In winter Mr. Cornings interest In firms
we're contractors with tho road for iron and other mat
OF sls was obiectod 10 az being In violation OF
well settled principle OF law. and IN con
with tho interests Of tho stockholders. str
L a..aniaion uaa mazda In tina Roard 10 tho naxmnn