The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1879-01-09
PACIFIC MAIL.

BAD MANAGEMENT OF A GREAT CORPORATION
PRESIDENT BABcocK's REVIEW OF THE COM
pANY UNDER FORMER NEUTRALITY-SUSPICIOUS.
NEWS FOR THE STOCKHOLDERS.
For some time back stockholders of the Pacific
Mail Steamship Company have been clamoring for
statement which would acquaint them with the
financial condition of the company. and the present
management has been at work for some time past
endeavoring to satisfy this demand. Yesterday Mr..
d. s. Babcock the president of Pacific Mall issued an
official statement which, he acknowledges. the
recent decline in the stock of the company and the
consequent apprehensions of the stockholders regard
ing the future of their property, seemed to require
In his statement President Babcock says that the
transactions of the two years ending April 30 1878,
of important character that it is necessary
to embrace that period in order to present an ntel
gent view of the situation. He then continues his
statement follows:"The report of President Dillon
for the year ending April 3d. 1876 showed the gross
earnings to amount to s5,5oool3 90. and the ex-
penses 1915 OFT 95a decrease in earnings from the
previous year OF 1925 637 90. and in expenses of
s2Os2771 o. the result being s1.137134 ID in favor
Of that year over the previous This report also
shows liabilities, excluding S1,S37 .S02 70 capital
stock and contingent liabilities of $685. 100 49, in all
$2s6o59a 49, Available cash assets sl;o4. 800; or
liabilities cash assets, S7l9O57 As. 1t was sub
sequently proved that these sums covered amounts
that be realized and also amounts
that were not real liabilities and after eliminating
such amounts we find that at that the liabilities
S215715s 49, cash assets S990,065 81; iiabili-
ties over assets, 81, 167 ,092 50.
UNPRoFrTABLE CONTRACTS.
During the administration OF President Clyde for
the two years ending May 81. 1875 no report showing
the earnings expenses Of the company was made.
and in fact statement OF liabilities and assets
taken from the books given to the stockholders
report shows an apparent decrease in liabilities Of
$11S5.U58 03 but it omitted to state that large part
of this (S255 000) derived from the sales of
real estate and of three old steamers, and also from
the reduction OF the Goals and stores at agencies OF
.139 49, and receipt from the United States gov
eminent of $375,00O subsidy, amounting to
$S17, 139 10. An arrangement was made at this time
with the Panama Transit Steamship Company by
which it's ships were to run in connection with the
ships of this company on the New York and San
Francisco lines the division of net earnings being for
| Steamship Company and threeffths to the Pacific
Mail Steamship Company, and for sixteen months
up to the time Of their sale to this company the
| division to be equal, one-half to each company.
"Under this arrangement the Panama Transit Steam
ship Company took, its share Of the net earnings
S4 A. about $4,000 more than it was entitled
| to- and which amount it is confidently believed, can
be recovered On February 1875 the purchase OF the
and the sum agreed to be paid was SIS to $50 per
ton-more than the best modern ships OF equal tom
mage could have been built for ut that time. On the
same date, and in consideration to the Panama Rail-
road Company for the loan Of its bonds i'll payment
or these vessels to the amount OF 81 100000 bill Of
| sale was made to that company Of the five transit
company's ships and of all the other ships of the
company eight in number) engaged in the trade be-
| tween here and San Francisco, and, as further Sc
curity, a mortgage for s25oOOO each on
the steamships City Of Sidney and City OF
New York. It also agreed that the Pacific
| Mail Steamship Company should pay to the Panama
Railroad Company it's share of the business. about
100000 per month 1t may thus be seen that on the
accession of the present management the affairs Of
| your company were in deplorabe condition. The
| indebtedness OF the Panama Railroad Company had
largely increased during the four months the con-
tract had been in force ana its demands for settle
| ment were imperative. The whole amount paid that
company in cash during the FIVE months ending Octo
Der 81 $575, 576 81" In conclusion Mr.. Babcock
| states that his company has succeeded in making a
very advantageous contract with the Pacific railroads
but all his efforts modification Of the
tract with the Panama Railroad have been futile up
| tc his inn