The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1866-07-19


Directors.
The manner in which many Of our railroads
arc managed by those persons holding posi-
lions a. directors Is disgrace to the coun-
try. They care nothing about the safety
Of tho passenger or the lives Of those who
travel over their roads, but turn their entire
attention to the manipulation Of the stock in
Wall street. Dividends are often paid in order
to give the stock more value in the board
when the money thus used should be expended
in repairing the track, removing worn out and
broken rails, or replacing . rotten bridge.
This kind Of work does not assist the 6uctua-
tons Of the stock and therefore no attention is
paid to it. Some director will load up with
the stock, and IL hS cannot obtain rise in
price by any other means, he will prevail upon
his associates to loan money to pay dividend
in order that he can sell out at handsome
profit. Thus the fluctuations are forced up
and down. while the travelling public are in
danger of being killed or MANNED every time
they intrust themselves to the cars. This
is carried to such an extent that even those
who wish to purchase securities for investment
are not safe in touching railroad stocks. The
market prices Of most Of these stocks are gov
erned, not by their intrinsic value, but by the
success of the directors manipulations in Wall
street.
This system has been reduced almost to
science. 1t effects not only the rise but
the decline of the stock on the board. A
railroad official takes it into his head
to sell large amount OF stock short.
This accomplished, dividend is passed
by, when perhaps the road has earned it. Re-
ports are sent out representing the road to be
in bad condition. On the top of this comes
railroad accident of an alarming character,
and all so timed that it looks very much as
though it had been prearranged. Under all
this the stock goes down, the railroad official
covers his short sales, making his thousands,
and then goes at work buying stock for rise.
stock, in nine cases out Of ten, is worth just as
much when it is selling in the fifties as it is
when it is above ninety, and not one cent more
in the latter than in the former case. The
truth of the matter is the road is allowed to
take care of itself, while those who are re-
sponslble for its management are spending
their time buying and selling the stock in
Wall street. just as they may have planned for
it to go up or down. This system has increased
very materially during the past few years, and
unless it is stopped in some way it will ruin
the railroad interests of this country. No CAPT
talist will be willing to intrust his money in
any such enterprise; for he will not know at
what moment this shuttlecock operation Of the
directors in Wall street will destroy his pro-
perry and make his stock worthless 1t is quite
time for the State Legislatures to take some
action on this matter, and in some way correct
the evil, before it reaches such magnitude Is
to ruin the railroad interest and bring about
Q universal slaughter of the travelling public.
For to this it must come, If the present system
is allowed to continue. If the Legislatures
have not the power, then let Congress take
hold of it. The sooner the better. Every
days delay only increases the evil.