New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1877-12-11
been managed as to conceal from him any evidence of

Detn go managed conceal MIN evidence or
floating debt.
Mr. Smith then demanded a special meeting OF the
board, at which he asked for special committee Of in
vestigation. This yehemeny resisted and at the
instance OF Mr. Gowen aud .Nr. ROrle. Mr.. Smith
says, the resolution allowed To appear the
minutes. Nevertheless, he authorized TO examine
as fully ms he pleased, and he asked Isaac Hinck-
ley and j. b. LippincOtt 20 assist him. The
board agreed to the choice, About two weeks
later he submitted report, which vigorously OF
posed, and its acceptance prevented by Messrs.
GOwen and Borie that IL would not be entered upon
the minutes Mr. smith had Informed Robert McCalmont
at London Of his desire for investigation, and had
sent him a copy OF the report with demand
that Mr.. Gowon be dismissed aud that he
should stop mining coal Mr.. McCalmont sent over
j. II. Gardiner his confidential representative. and
this gentleman on his arrival told Mr. Smith that he had
his report and letter. and acting Instructions
refused both Of his demands. Mr. Smith then resigned
his place as manager. At that time, however, the
company negotiating for TO meet
pressing liabilities. he did not deem 1t advisable
to give the facts the public saying, however every
one that he would speak out at the proper time" In
his opinion the time has He therefore sub
ms the report OF the committee, of which the following
The investigation carried up to November 30, 1875
Since that date $OOOOOO0 of bonds have been issued.
The result OF the investigation ia reduced to state
Railroad and the Reading Coal and Iron Company, Civ
ing in round numbers the total stock in bonds OF tho two
companies, the of railroad and its equipment and
lands:
Heading Coal and Iron Company 55OyOOO0 90
100000 90
Represented by s35OO1uOO 90
EelIesenieh by Donis.-....''.' ''''. f6ODtoO0 ~
Floating debt....... HoJOOoO 90
100000 90
The difference Of $9O00.OOO being represented in the
current business OF the company Included In the cost
OF the lands IS:
Loss in working per statement az" about 100000 90
AND discount and H. 10000 90
sIfi'OOOO 90
The net result Of the business Of the two companies for
each year since 1871, shows total prolt f0r le I'VE
And digiicnds declared by the Railroad ,.
Company. I''Viu'-Of D.
Leaving deficit 3'692'2-3 -
i. discount on bond. sold low much Of tE9 item Of
interest is properly chargeahie on cost o: JANUS uus
t.oir development Is submitted 10 the Board
The amount Of the floating debt on November 80 IN
ycInbrr 80, 1873 and 1874, from the BOOKS OF te hd
road Company % those 81 the Coal ana rom IoIiu!,
and 50 excluded from the cunts OF debts due 10y tGe
company" given ~ the annual Reports 10 INC s'ocA
holders. are:
Tor l09'"'O
Ar.onrt,r together T., $4,000
Analvzing the workings OF the companies 1t IL found
that the net loss amounts To S201,ti3 30.
The loss on coicrcs worked by the company ,.,.o- 80
Tie gain on those leased that amount OF ~,
royalty received i'''i'l ~
Leaving the net loss satod........ $2J7ii3 80
Mr. smith concluded his report with the following sum
mary and conclusion:
Firsi-The real earnings OF the railroad
and the coal and iron companies since 900. ON -
1871 nave been 90 90
And the dividends paid by the railroad. lS,oIO2bi ~
or over seven times the real profits
SecOHd.-Ihat two occasions the amount OF the
floating debt transferred the day Wren the books
the Railroad Company were to be balanced from the
books OF the Railroad those ~ the Coal and Iron Conn
pauy concealed from the Board OF StOckhOides
lhird-Ihat the loss the Collcrics
worhcd by the company has been....... S2o3ut35 ~
and the gam on those leases has been. l133l3l 80
The difference being the net loss...... 1907 Abb 30
according the books the entire coal Mining opera
tIcns Of both kinds THIS result 10 my mlnd. demon
strates clearly the good policy Of leasing the cOelcs
II the report of tic Board 81 Managers processes any
thing 10 all IL Processes To tell the stockholders the truth
a. to the condition OF the cDmpIuys ghjIrs 30 far a.
known - the managers at the time Of making the report
How your managers have performed thar duty prop
eily. y respectfully submitted Tor your consideration
A, they have p.rssently concealed the truth, officially
before them FOR year past think il my duty to tell II
tor tcu tnat the stockholders may have an tie Facts
necessary To enable them 10 act neigcf ty nj the az
proac!ug annual meeting ana 10 prevent repetition vi
hdecCptiOn.