New-York tribune., 1876-10-07
Per cent OF
HHH

Total increase for cousruc tOn q, ,9JO969 sl'io
This sum is represented by only an addition Of G31
miles of single track or at the rate of S4436G per
nile of single track and not Of road. We submit
that the stockholders entitled to an explanation
concerning this enormous alleged cost for the add-
Gon Of an extra track TO old and established rail-
road Ii viii be observed chat the foregoing table
includes the items of land, bridges, and graduation
and masonry; each one of which shows an increased
expenditure out of all proportion t. the work that II
seems possible TO have been Tequir i to have been
done. But the charge for "superstruction, includ-
ing ironD which was $14,742,4O is an item which
we are able to submit 10 the test of public facts.
Be il remembered that the items have already
been given for all possible charges excepting
the track-rals and sleepers-651 miles OF track,
estimated at 100 tons to the mile (0G tons would
be sunicient, requires G3,1OO tons, which,
at SI2O per ton probably Sll1 would be
a lagh average lor tine actual cost to the
company, is S7,572,OOO as the cost OF the Steel
rails required for the additional track leaving the
handsome sum of $7.17O4OO to be accounted for
by the cost for seepers" and of transportation!
The foregoing facts fairly raise the question whether
that capital account has been made to pay large
proportion of the dividends which the company has
distributed to its stockholders.
Fourth: Special attention is called to the fact that
about $25. 100000 bonds have been issued since
1872, for which no accounting has been given fur
ther than what appears IN the increased cost OF con
structiOn, equipment, &c Whether these bonds
were sold at 70 cents 125 upon the dollar is no
where stated. 1t is, however, well-known fact
that the bonds have commanded a considerable pre-
mium in the market-at times as high as p per
cent-and there is no doubt but that large sum,
amounting to several millions of dollars. has been
realized in premiums, and has constituted fund TO
1,ao,,r from ma
panys reports to the State Engineer there is entry
which can include this fund except it be that of
miscellaneous" earnings. That il is disposed of
is a fair inference. because prior to the time that
these consolidated bonds" began to be issucd
Qs72) the item miscellaneous" was mconsiderabe,
while afterward it assumed noteworthy proportions.
If miscellaneous" includes bond premium account,
as we assume il does, then we have another source
besides the construction account from which por-
tOn OF the dividends that have been paid were real
lied other than the legitimate earnings of the road
This is evident by recalling some Of the figures
already given. For instance for 1872 the amount
paid ont as dividends was $7,244.s3 The amount
applicable for dividends was S7,2j9 G33. But of this
latter sum 81 ,3O2 926 was deri yed from "mscella
ncous" or bond premium account, and deducting of
this sum- say 81 900 las the proportion thatcame
from premiumsl, from the $7,259, 633 applicable 10
dividends would leave that amount too small for an
s per cent dividend by some $950,0O0. In other
words, about $1,OOO,OOO Of the 1872 dyidends
came from the premium ON bonds sold Precisely
the was true for 1873, 1874, and 1875. Take
from the sum reported being applicable for dyi-
dends in any one of these years the sum that is
credited TO miscellaneous earnings" and the re-
mainder win not be sufficient to pay an per cent
dividend into hundreds of thousands of dollars
We are forced then TO this inevitable eoncu-
siOn--ether the bond premium account
is included in the reports to the State, OF
1t is not II not then the report is incorrect
and there is fund amounting to several millions Of
dollars Of which the managers make no report and
give no account. If it is included then the mys-
tery of miscellaneous" is solved and the company
has been paying dividends which were unearned.
EVIh: But tie point which attracts most atten-