Nashville union and American. [volume] (Nashville, Tenn.) 1868-1875, 1875-06-12
ON THE DEFENSIVE.

Col. E W. Cole and the Management
OF the western and Atlantic Rail.
raad-The Lease Not such a Big
Thing, After All.
A letter has been addressed by Col. Z.
W. Cole, President Of the Nashville, Chat
tanooca and St. Louis railroad, to the
luglSfa (Ga.) COnStiltiORdliSt, in which
he corrects certain misrepresentation made
BY one OF the Atlanta papers concerning
his recent speech before the Directors OF
the Georgia Banking and Railroad Com
pany. as TO the earnings Of the State, or
Western and Atlantic, railroad lie says;
"The lessees of the State read did not
take the lease and give a bond Of $780,
600, binding themselves to pay into the
State Treasury $4,000 per annum, Wheth-
er they made II or not, IS simple charity
to the public. While they neye= expected
to make very large profits, they did expect
to make money out OF it. No sensible OOdy
Of men would have assumed 50 heavy a re-
sponsibility without a reasonable prospect
and expectation Of making something IN
return for their efforts and labor, and for
the great benefit bestowed on the people
by tightening their taxes S3OO,OOO
Der a1uum tor the use Of piece
Of proDertv that had been a Eeavy
cxpense 10 her. l believe l express
the true feeling Of the great mass OF hon
est. fair-minded men, when | say that they
exDect and desire to see the lessees prosper
and realize a handsome profit. To this
nile I am aware there are exceptions.
Some men are controlled by their interest,
as in the case of such politicians 1s desire
the road in the possession Of the stale
again. that they may manipulate u 20 their
advantage. Others have a prejudice against
the lessees, others may be little enyious,
but they are, 1 am persuaded, q very small
minority Of the people Of Georgia.
tsBut TO the statement republished BY you,
as to the enormous profits Ot the lesseeS, 4
have 10 reply that did not state that the
Iessees had made 100000 the pas, year
I did not state that the gross income Of the
road was S1.4OO,O0O, or that the total ex-
penses Of the road were only SoOO,OOO the
last wear. Neither of these statements W, 5
made by me, and neither is true.
@The gross earnings, as stated by me,
were 81 .344. 932. 76, and the gross expendi-
lures $50 .2S4.90. To this add the $500,
600 rental paid the state, and our total exc
ppuses were I,1lO,2S4 9O-leaYiUg differ
ence Of S234, 4,647.S6. OF this sum $4,000
was baid on the coupons Of the
income bonds, and the balaLce was
applied to the payment Of the Indebtedness
of the COMPANY, which was Incurred FOR
equipment and construction during the
first three wears Of the lease, and after the
applications Of the whole amount which IS
alleged to be profits, the company was stll
g 10
stockbOlder in the lease received 4 single
dollar Of cash dividend, in any manner OF
form, directly or indirectly, for the first
three years Of the lease. The stockholders
did not receive $40, 600 % the share Of in
come bonds Of the company, with no securi-
ty whatever for the payment OF single
dollar on the bonds, but the chances Of
making the money out Of the profits Of the
road to meet the bonds.
WAs the charter made no provision for
stocking the lease, but simply divided into
shares. the income bonds were issued TO
stand in the place Of stock, with no securi-
ty for the payment Of either principal or
interest, unless the money was made out
Ofthe income Of the road. In other words,
if we made the money, We We're to pay the
COUPONS in the nature Of dividends; if Lot,
we got nothing; and, as already staled, not
a dollar was paid to any stOckhOlder f0rthe
first three years Of the lease, and the money
was borrowed with which the coupons were
paid the fourth year. In other words,
we were indebted over Si30,OOO for bOr-
rowed money to equip and repair the
road when we paid S92,O 700 Of the coupons
on the income bonds. If we had paid
our debts for borrowed money before we
paid the amount Of coupons above men
tiOned, not a dollar would have been re-
ceived by any lessee the fourth year Of
lease, and our debt at the beginning Of the
fifth year would have been about $4,000.
But, as the lessees were inpatient TO real
ize something, IL was decided to cary the
debt Of over $4,000 and pay the S9z,O0o
on income bonds. This is the whole
amount paid to the lessees for the first four
wears. Divide the so, 600 by four, and you
have S23,O per annum paid to the lessees
for the first four years, or 81, GOO per annum
10 each Lessee b0ldiug one Of the twenty
three shares. This was the whole amount
paid to the lessees for the inst four years
Of he lease, and 1 will here remark that