The daily dispatch. [volume] (Richmond [Va.]) 1850-1884, 1880-05-25


Germ LONG RorTgx-sEMfPAEic IN LON.
DON.
From the New York Tribrne.l
In the magnitude OF capita! l1volved, ana
fhe effect upon industry, this failure Is tue
most important that has occurred 10 lle
Tinted States since the great panic OF 1873.
The hines OF the Reading road permeate all
she anthracite region OF Pennsylvania west
~ the Lehigh Valley, and comprise about
500 miles OF track; II controlled more coal
territory. through the medium OF It's aux.
iiisry organization, than any other single
corporation In the world; II was large
miner Of iron ore and manufacturer OF pig
metal; Il operated $50 miles OF canal IL
owned twenty-tbree wbaryes on the De.a-
~ iron steamers 10 carry its coal 20 the CHIEF
Atlantic ports. The capital OF the reiir"ao
company was S120, 100000, and that OF me
coal and iron company was 6S,000,0oO. as
the two concerns were practically one, ,ne
bankruptcy involves the enormous amount
NJ a. 90 OO0. 600 in stock securities, besides
a very large mortgage debt.
The misfortune comes from trying 10
orasp too much, There were few better
rIeces OF railway property In the country
than the Reading road, but It's managers
were not content to stick TO their legitimate
business OF hauling other peoples coal sno
freight. They leased all the coaI-lands they
could get hold OF, paying in many cases
prices based on the figures prevailing IN 'ne
1ush times. They became the besviesl
coalmIne operators in the country.
They reached out and graspcd all the
lateral local roads feeding their main
line, and built many unpro6table OK.
tensions, in order TO make their control
OF the coal territory as complete. as pos
sible. IL was the ambitious aim OF the le-
cal adventures whose presidency has been
the ruin OF this great property to monopo-
lze the anthracite market by controlling
the mining and trans portation OF so large
proportion Of the total product az TO force
consumers and all other producers and
TRANSFORMERS to accsde to such terms as he
might choose TO make. This was gigantic
scheme, and it seems to have crumbled
from its own inherent weakness. Mr..
Gowen was shiity, plausible, and pertlna-
cious, bu. the time has at last come when
these qualities can no longer avert the
bankruptcy bis wild schemes had invited.
Nobody need be sorry save the creditors
and stockholders OF the bankrupt concern.
Such overgrown, iDcopgruous concerns,
using foreign capital to crush out lndi-
yidual American enterprise, are unwhole-
some creations, and exert bad effect on the
business community. They tyrannize over
small operators, make the investment OF
capital insecure in the region they domi'
nate, and from their greed or necessities
often Cypress fhe general public.
Especial to the Baltimore Americana
PHILADELPHIA, May 22.-Notbing definite
IN relation TO the suspension OF the Reading
a,,.fr s1al md Gnm-
panies can be learned to-day OF the office OF
the railroad company. Mr.. Gowen says
that he has no statement ready for the pub
lie as vet, and none OF the other officers
will give any information as to the causes
leading TO the failures. From an outside
source, however, IL is learned that the Board
OF Directors OF the Reading railroad held
meeting to-day and decided TO place the az
fars OF the corporation in the hands OF
three trustees c. T. Henry, Henry
Lewis, and Franklin b. Gowen, the preSi-
dent OF the road. No plan OF action has
been decided on yet, as far as can been as
certained. The failure OF Young q Co.,
Butler, Newball x Co., and G. Ii. Jordan d
Co. Is announced. The failures were caused
by the decline in Reading stock.
A statement Is made by the officials OF the
Philadelphia and Reading Railroad and Coal
and Iron Companies that operations will he
conducted as usual, and that there VIII he
no interruption Of business. AT the col
lieries work VIII be recommended on Mon
day and continued until Wednesday night.
A receiyership will be applied for, and Mr..
Gowen or Edwin NJ. Lewis, president OF
the Farmers and Mechanics Bank, will be
named for the position. The excitement
over Readings failure still continues. Read
ipp's stock was sold down as low as SO per
share, but later III was bid, with IL asked.
PENNSYLVANIA sold as low as 48s, but re-
covered dollar. Lebigh Navigation, which
sold at 20 at the opening OF Board, advanced
to %.
PRESIDENT GOwEN's CRITIC.
c. L. Smith, who was president OF the
Reading Railroad Company from 1861 to
1869, said that "in November, 1876, gen.
tleman told me he had heard it rumored
that the Philadelphia and Reading Railroad
Company had floating Indebtedness OF
S3,000,000. Not believing such statement
l replied: ooh, guess not; that is merely
intended to aid some stock-j obbing opera
.tion.' Instantly, however, l went TO Mr..
Governs Office and saw him there, aud told
him what had heard. Much to my aston
ishment Re replied: yes, the road has
floating Indebtedness Of over $7,000,000.'
Not one word OF this had ever been told to
the Board OF Directors. 1t had been con-
cealed-concealed by fraudulent entries in
the books and by forgery. OF this fact l
have positive evidence. When Mr.. GoweD
made the startling admission to me OF
the roads floating Indebtedness / had or
dered q special meeting OF the Board Of
Directors, and demanded an investigation.
/ sent report OF these doings out 10 Lon
don, and Mr.. Gardiner came on here in con-
sequence Of my demand to investigate this
matter. Mr.. Gardiner was then clerk in
the Office OF McCalmont Brothers, the largest
English creditors OF the Reading Railroad
Company. Now he Il partner in that firm.
After he came TO Philadelphia Mir. Gowen
was reelected president OF the company, and
so Mr.. Gardiner went back to London and
reported that everything was all light
These things happened in November, and
resigned from the Board OF Directors in the
following December. The result Of that in-
ves,igation was concealed BIZ the Reading
Railroad officials, and in consequence Of
that fact resigned. Mr.. George McHenry,
however-he is brother OF James McHen-
ry. who had the trouble with the Erie rail-
road-made the report Of the investigation
public Ia London. Mr.. Gowen then, In his
next annual report, denied the truth Of that
report"
THE READING lRoN-w0RKs SUSPEND.
READING, Pa, May 22.--The Reading
Eagle Of to morrow will announce that the
Reading Iron.Works, OF which j. Penn
Brock, Of Philadelphia, is president, has
suspended payment, owing 10 complications
with the Philadelphia and Reading railroad,
the companies being under mutual obljQa.