The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1873-05-06
THE ERIE RAILWAY
The Financial Condition of the
Company.
LETTER FROM PRESIDENT P!A. WATSON.
Dividends Promised Semi-AnnuaIly to
the Stockholders.
NEW YORK, August I, 1872.

NEW YORK, August 7, 1872.
JAMES MoHENRY, Esq, London:-
DEAR SIR-In order that you may be able
70 present your friends in Europe who
are interested in the Erie and Atlantic and
Great western Railways some of the, ideas
which have recently suggested to you verbally,
now repeat fer your careful consideration the
more prominent facts connected with these roads,
and the questions due consideration Of which
seems to me vital to their permanent success.
Apart from all questions as 10 the cost OF trans
portaton over broad gauge lines in comparison
with the marrow gauge system (which last, for
practical purposes, msy be assumed to be OF 49k,
which has been adopted the best compromise
between the Easternand western lines, which vary
between 4sk and4.lo. Isay, without discussing the
comparative cost OF transportation. though be-
heve that narrow gauge road may pay largely on
Its cost, while one of six feet may be worked with
out profit 1t is plain all those who have carefully
considered the questions involved. that the inabil-
ity to secure connections beyond Buffalo and Day.
ton for broad gauge cars Is alone sufficient rea-
son Tor urging reduction of the gauge OF both the
Lrie and Atlantic and Great Western lines to 4.9a
and. until this is accomplished, the results antici
pated by the owners OF these roads cannot be Sc
cured.
But having secured this change, or being assured
that the means necessary for its accomplishment
may be obtained in time to meet the Requirements
OF the Erie Company, another question at once
assumes equal or greater Importance; and unless
we are able practically to extend the Erie line to
Cincinnati and the Southwest TO the Lake ports
Including Chicago), to St. Louis and the North
west, and thence to the Pacific coast, the Erie
road will remain Isolated from the main sources OF
profitable business, the absolute control OF which
at It's sources, freed from the caprices and change
able interests OF the managers of other lines, is
necessary to enable any trunk line to command
at all times its due and proper share of the traffic
which is abundant but which has been unduly con-
trolled and has reached the seaboard by the Penn
eylvania and Central lines.
This far-reaching policy was first acted upon by
the Pennsylvania road. In ten years it has by
leases, running arrangements and the purchase of
interests in Western lines, become the controlling
power over many thousands OF miles of railroads.
30 that its system has now become q network of
connections from Canada on the north to the ex-
remest western points OF the United States; and
all these lines OF roads contribute constantly and
surely to the business and profits OF the original
Pennsylvania road
At later date the same system was adopted by
Mr. Vanderbilt and the influence OF the Central
road is now almost powerful in the West as that
OF the Pennsylvania line.
So far the Erie and Atlantic have been unable to
compete with their rivals In this field.
BY the change OF the direction OF the Erie it is
now, for the first time, in position to secure it's
share OF this influence and business. If IL fails now
TO secure similar advantages it must remain, as in
the past, comparatively powerless, and its future
cannot be brilliant.
In looking over the whole field of our Western
connections and of the main and constant sour ces
from which our business springs, it seemed, at
first, almost impossible to extend the influence OF
Ertn D1sl.,
coming in contact and in conflict with the systems
OF the pennsylvania aud Central roads-already
tablished--one main line only, which by its
branches and leased roads seemed TO meet the re-
quirements OF the Erie Company. was free from
embarrassing contracts or alliances
This was the line of the Cleveland, Columbus,
CINCINNATI and Indianapolis Railway.
This road runs from Cleveland TO Columbus, 1Ss
miles, at Gallon, so miles from Cleveland, branch
runs to Indianapolis, 202 miles ana from the same
point another branch extends Springfield, 81
miles, thence by a leased line to Dayton, 25 miles,
and thence by its own line to Marietta Junction As
miles, and TO CINCINNATI, miles, by leased line
all IN the state OF Ohio.
On the NORTH IRON Indianapolis to Terre
road is owned Jointly with the Pennsylvania
Company, and thence 10 st. Louis. 1s2 miles,
over a road Jointly leased by the Cleveland Column
bus, Cincinnati and indianapolis and the Pennsyl-
II also controls by running arrangement the line
from Beardstown, on the Illinois River, to Shaw
neetown, on the Ohio River distance of 22s miles,
passing through one oil the most productive por-
tons OF Illinois,
III owns a railroad extending from Union on the
Indianapolis branch, to Dayton, on the Cncin.
matt branch, a distance OF As miles, this branch
being now used by tue Pennsylvania road to make
Its Cincinnati connection from the west.
IL controls largely the business OF the Tuscarawas
Valley road, mnety-ive miles IN length, which
crosses tue Cleveland, Columbus, Cincinnati and
Indianapolis at Grafton ana terminates on Lake
Erie.
These lines aggregate 1lse miles. OF which $50
miles are freehold, the remainder being leased
such advantageous terms that the leases alone are
worth large part OF the present capital TO any
connecting railway.
The Cleveland Columbus Cincinnati and In
danapoiis Railway forms close connection with the
Atlantic and Great Western at Cleveland, Spring
neld Gallon and Dayton.
The capital OF the Cleveland Columbus, Cincin-
natl and indianapolis Railway is as lollows;-
Bonded debt S2U00o0
Surplus cash end Of last fiscal year Isss0o
Other assets, per schedule, exceed ..... 10000o0
The shares OF the company have paid annual
dlvldends oil seven per cent and upwards from the
time OF the completion OF the road twenty years
ago.
The railway TO considerable extent, has been
constructed from revenue. The $50 miles (free-
hold) represents cost OF only $4,000 per mile,
winch would scarcely pay for the rails and rolling
stock. The large surplus real estate owned by the
company IS more than sufficient TO pay OFF It's whole
bonded debt.
Running arrangements by which a large portion
OF the traffic OF all these lines be secured for
this combination are now offered on the most fav-
@orable terms, and can be closed at any time, so
that the mileage to be added 10 the Erie aud At.
lantic by this combination rs over four thousand
at O cost so insignificant IN comparison with GER
tain results, as 10 seem almost Incredible.
Never has any similar power over business been
within the control OF either OF the trunk lines at
so small cost, nor where every dollar Invested
was IN itself secure beyond peradvcnture, without
regard 10 the incidental advantages arising from
such power.