, 1873-11-07

aout VI T4".bN,ulu. LII AuHSIO1l ~ Luo hHf'lulI]-
tion Of oil tho liabilities, tho pennsylvania llat1-
road Company guarantees an annual dividend !
equal to II Dts, GOO among tho stockholders of
tho united companies. It also loaaod tito Phil
ndo)pllia l. Eric HALLWAY, md guarantees, iii
addition to all coat Of maintenance, 30 por cont
Of tho groah onrnil,gs or ahout 9l,00o.oo0 por |
annMm to tho holders of eH.oo0,0o0 Of stock, mud
lntorost Oil SD, ,d00, 900 Of debt.
This naroad Company has within 1t another |
corporation called the !" Pennsylvania Company"
nnt composed Of tho officers Of tho Pennsylvania |
Railroad Company. 1t has cnpitn1 Of 912,ooo,-
600, Of which esO0o,o00 10 hold by tho pennsyl-
rania Railroaa Company. Dividends upon this
stock aro tIuaranIoed. THO Pennsylvania Conf |
pany oporntos NIL tho roa1u west Of Pittsburgh !
leased by thu Pennsylvania nairoaa Company.
Those roads II ycar ago included tho Pittsburgh,
Fort Wayne d Chicago, 4os miles ; Erie Il Pitts
burgh, ION miles Cleveland 81 Pittsburgh. 228
miles two other small ronsls, 90 miles In MI.
s28 miles. The samo Company owlls n mn jorlty
Of tho stock md control Of tho Pittsburgh, Cln-
cinnati T. st. Louis Railway 20l ,nilos Column
bus, Chicago & Indiana Central, 587 miles; Lit
tic Miami, Columbus &; xena Railroad, 107
mllos Jofrersonvillo, Madison 4 indianapolis
210 milcs Cincinnati l. Mushingum Valloy, 1s4
miles; Indianapolis l. VincenneB Railway, 1T
miles; St. Louis, Vandn1ia l. Torro Haato
Railway, 1G1 mi1os,-maling all aggregate
Of 2,512 milus controlled by tho Pennsylvania
Company. 1t also owns L l,alf interest in tho
indianapolis l. st. Louis Railroad, 2o1 milca.
Tho Pennsylvania Company, which is in fact the
Pennsylvania Railroad Company undor another
guihc. Inns separate contract with cacl of theso
roads. but substantially it guarantees to them ali
per cent OH their capital stock, oil excessively
waterod, aud pays tho interest on their dabt.
In 1872, there woro large additions to this list Of
roads leased or controlled by this ono corp ora
tion. Substantially, tho owners of the pcnnByl-
vania Railroad arc tho 1oasees Of nll this vust
system Of railroads. aud are responsible for in-
terest and dividends IN all Of thom in fair weather
and foul,-hit or miss, rain or shine. All this
interest and all these dividends havo to bo paid
out Of the net earnings Of the property, Or fail
ing in that, out Of tho main road
and tho other assots Of Tom scutt
l. Company. Tho aggregate Of this stock,
upon which dividends Of 7 por cent aro gunra1l-
tecd, with tho intorest-bearing debt, is probably
GO per cont greater than the capital actually i'll
vested in tho roads. To pay this interest and
diyidonda, the Pennsylvania Railroad manage
mont has bccn compelled to levy tho highest
rates for transportation that the property car
riel would benr. So long as tho ordinary busi-
moss OF tho country was uninterrupted and
business brisk, everything went on swinmingly.
But matters havo changed; tho receipts Of tho
railroads havo fallon of, tho great corpora
ton nnds itsolf embarrassed with it's vari-
orH guarantees, md has to meot directly the
question Of paying or passing tho regular divi
dend on its own stock. The question whether
it shall pay that dividend or not becomes OF
more consequence, because It will practically ad-
ycrtiso tho ability Or inability Of tho Company to
meet it's engagements with tho holders of tho
many millions Of guaranteed stock in the lcasod
companies. Tho dividend should, ordinarily,
haye been declared uomo weoks ago. So fur,
nothing has been done, and tue impression
grows stronger that tho business Of the Com
pany docs not warrant dividend. A formal
announcement, however, is to be made to-day.
or course, tho Pennsylvania Railroad Company
cannot have q dividend until oil it's leased lines
and Credit Mobilier organizations 1ave had
theira.
Now, If the Pennsylvania Railroad Company
With it's new Jersey, Pennsylvania, and Western
attachments, represented ou1y tic actual money
invosted in them, their obligations would be
about one-half what they now arc. It now re-
quiros ID per cent Of net earnings where per
cent would suffice on bona Jadc indebtedness.
To mike up this extraordinary dividend, tho
Company has had to keep it's standard Of rates
to the highest practicable point during tho whole
time that business was offered. The moment
that hard times como tho Company's margin is
cut OF, Had tho Company boeu doing business
on tho actual capital invested, It could lago per-
formed tho samo amount Of transportation at
two-thirtls or one-lalf tho rates it haH boen
exacting, Then, when the business was inter-
ruptol or fell OF, it could advance its rates to
at the highest point tho decline in business cnn-
not DO compensated by M advance in charges,
because tho property carried can't payit. Honco
thoro il embarrassment, and the embarrassment
is likely to incroaso rather than diminish.
The condition Of the Pennsylvania Railroad
Company is no worae than that OF tue Now York
Central, Lake Shore, and MI tho other railroads
which have doubled their Htocks without cor
responding increase Of capital. They hare boon
striving to pay dividends on 81 where there is
but 81 invested. Tie business Of tho roads
haB tal1on away, and now they can neither pay
dividends nor keep up the value Of tho stock Oh
which money has boon borrowed. Tho ioclino
in the value Of tho stocks is literally forcing tho
stockholders into bankruptcy without tho inter-
yontion Of the bankrupt court. Thoro would ho