New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1876-12-26
THE MONEY MARKET.

X
c,.r,ztInas being generally Observed thrOughout
kbstendom as a holiday. there are neither foreign
~ Lo,ne markets to eeHrtaent UPON
,ie,v Of the special interest manifested at this
.,,ns IN the transportation question and of the
'4atistios recently published in TIE TRIBUNE, the
sS,,ov1p from IIfg TRIBUNE of Oct "a 1874 is of
ga,eraI intesest:
1aryrIy TRANSPORTATION VS.. INFLATED RAILROAD
CAFTfAL-
Tho tope of the present discussion relative to cheap
TRANSFORMATION perhaps suited 20 period twenty years
se at this late day seems very Beh Ike the ioekng Of
a. stable door after the horse has been stolen. This
subject should have been agafed and have received the
attention Of or people at the time when Che first prOpo
ou was made to increase the capital Of railroads. by
process no~ known Watering Few persons probably
realize to which this has been carried,
~ have any adequate idea of the burdens which have
TINS been imposed upon internal commerce. The
Man OF creating fictitious capital watef railroads
snears TO have been initiated with the formation of the
EewYork Central Railroad Company in 1858 by the con-
sodation OF th ten separate corporations then owning
the roads etwcsn the Hudson River and the lskes The
smined Of share capital and convertible bonds
Of these separate organizations tleE S23 2s5,00o.
The e0ualizing process OF the consolidation that
the schenectady and Trey compapy-that being the
lest productive OF asbould come in at par while the
holders OF stock convertible bonds OF the other roads
received premium in consolidated six per cent debt
6cates ranging from IL to 50 per cent making all issue
ofhso certificates amounting TO IS S9f5O0, On over 30
Der cent ON the true share capital OF the company From
this time down to 1867 there had been no material
change in the total OF stock and debt Of the EewYork
Central Company other than what could he easily ac-
counted for by actual value received and its capital ac
count then represented by 900 OF stock aud
$1,000 $50 Of bonds. fetal Including the water" OF
1859 OF S456oe, 500 The hudson River Railroad Com
pany at thgsara time la share capital of $70000o0
and a bonded debt OF $7,227, CO0tsta S14,227O 900,
making these companies, which in 1860 were con
sodated stand in S67 follows; Stock, $4,000,
and bonds $40 29692O, a total capital account Of
$54s33,5 $50
Daring 1867 the Hudson River Company presented lis
stockholders with Sc 100000 stock OF dividend of 90
per cent and again. at the time of consolidation another
one Of IS per cent the then outstanding stock of
Sl6OOO00O Iuaking an issue OF $l3.62S,Oee The New
York Central Company had 1863 presented it, stock
h0ders With the small orHnb Of 2303GO0o or so per
cent followed 10y of p pur cent, 000-at tie
time consolidation Thus in tie space OF two years
the now NewYork Central and Hudson River Railroad
Company added to It's capital the small sum Of SfoS6
600 created Of nothing hut de win OF its directors
and the mixture Of paper and printers ink From 1870
70 1872 the bonded debt was increased each year by
non 81 100000 to $20O0090, since which 1t has been
increased some fer purposes Of construction
Who shall say If any OF how much OF this has been add
tDnal NaterT to make UP the necessary amount Of
s72OOO0O for annual divideRdsi IL Will be seen by the
foregoing that the known fictitious capital Of this
company, incladng the Issue OF 1883, r. some
laOOoOOo greater than the real capital when had been
,ysteA down to 1889 Is cheap transportation possible
uder such condionsf Continuing the line west, over
the Lake shore and Michigan Southern Company road
"a Chicago we end additional water which has been
added between 1861 ard 1871, as follows:
sEs a4 P ES ri 1Si IS niles $4,000
Cleveland and F6iedo, las miles 25a6oo
MICHIGAN SOUTHERN and Northern InaaHa 5a7 M, ooo
LAKE. ssoTc aad Wis6igaa Southern cosoidaic sy5SS
ro,, .-...,................... -F25 jO2 500
or S3oo33S more than half Of the present share capital
Of the company The total OF tho above roads in
1861 as represented by stocks and hend and which in
Guided some water created in 1856 was only $4,000
900 Of which SIM the $25,Se233S since added By the
prntpgprvss is over 20 per cent Thus We have Oh tins
one Inc Of road from this city to Chicago an aeSnowl-
edged acttious capital of $50 1922 33a sam sufficient
10 bud and Thoroughly equ'p dOa9Ie-track road for
he entire distances suni eaEg for about SGOOOOOO
year 10 te paid from the traffic receipts, or in other
words Si0OOCO0 is 10 he yearly drawn from the people
for The paynent OF dividends and interest on supposed
eapal which had real existence Is cheap
transportation possibility
No wonder that ths subject should be receiving the
attention OF the merchants OF this city. as they wake up
20 The fact that the Baltimore aud Ohio Railroad are
about completing their own line direct into the great
grain market Of the Northwest and being capitalized at
less than $4,000 per mile can and viii denver HclsH
a. Bssinore at much lower rates than Is possible Tor
our roadscaJdized at $1,000 per mile--to de-
liver IN New-Y0rk II has certainly required no ex-
IraOrdhary mathematical ability to comprehend tAls
fact 10 Is New-Yorks misfortune as well as her fsalt
that her railroads are all 50 Heavily Handicapped In
ts yast amount Of cisus capital lies one OF the OBJ
staees to cheap transportation and in the Legislature
faay lie one Of tne remedies. VIII not save time and
be better to go Immediately after the stolen horse With
stopping lock the empty sttef As before stated
te roads mentioned have been selected only because
they we're the post conspicuous as the examples Of al
aud not the exception. To maintain that these com
panes can earn and pay dividends on this vast amount
Of water ONLY adls to the forcs oi the argument.