The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1880-02-07
spEEoH OF HoN. A. 2. aoRMAN.
Management Of the Chesapeake and Ohio
Canal indicated.

pardon me for consuming its time in making
4 statement somewhat personal to myself, be-
cause it not only affects me, but is matter in
which the State itself is largely concerned
1t is well known TO the Senate that one Dan
iel X. Stewart, resident OF Great Britain,
and holder Of some of the bonds Of the Ches
apeake and Ohio canal, issued under the act
Of 1874, has filed in the United States Circuit
Court for the District of Maryland bill
against the company and its officers. The
allegations in that bill, stripped Of their legal
yerbage, are substantially that the canal
has been managed in the last eight
years without due regard to the interests OF
its creditors and simply in the interest Of
politicians, and that they procured the pas
sage Of the act Of 1878, when it was not ne
cessary for the interest Of the company, au.
ihorizing the issue Of bonds for the repair OF
the canal, making them a lien upon the corpus
of the work to the great detriment of the
holders Of the bonds Of 1874. AS a matter of
course, the canal company will answer that
bill in proper time and in the proper place.
But as those who manage the work have
always regarded themselves as the agents OF
the State, we have felt it to be our duty to
bring this matter to the attention Of this body
for the reason that there are matters con
nected with this case which induced these
gentlemen to bring this suit in court, aud facts
bearing on this question showing the motives
which CANNOT otherwise be brought to the at
tenton OF the public | desire TO say now, as
did from this spot four years ago, that while
the managers OF the canal do not claim they
are iniallible-none of US are-while minor
mistakes have been made, there is no
act Of administration to which any one can
point with eensure; there has been nothing
L g. # A
canal aud its creditors.
-Four years ago, Mr.. President, the Senate
will remember, individuals and papers Of
section Of this State who had regarded the
revenues of the canal as the exclusive perqui-
sites of that section, charged us with the most
corrupt motives in paying on account OF the
overdue interest on these bonds nearly ST.
100000. Then, Sir, we we're charged with
being the agents of the bondholders and were
paying them large sums that should have been
applied TO the maintenance OF the work, and
direct charges were made that a commission
was paid TO the management of the canal for
thus performing thsir simple duty. We asked
then for an investigation aud to have every one
with any knowledge Of the matter to come
and testify before special committee Of this
body. Some of them skulked behind the ex
cuse Of the want Of authority OF this body to
compel them to give their testimony. Some
Of the bondholders, men of character, such as
Mr.. Corcoran and George S. Brown, stamped
the charge as without foundation. Now, Sir,
because of the depression in trade and dlsas'
ter to the work we have failed to continue
the payment on account Of interest, thus
doing what, it is true, was simply our duty,
one Of these bondholders comes forward in
the most serious terms-and as we did four
4 Al. r.
shall be brought to the light by committee
of this Assembly in addition to the proceed
ings in court.
Mr. German then read from the bill filed
in court that part charging that the president
Of the canal company Mr.. Germany is now
aud has been for some years chairman Of the
Democratic State Central Committee aud at
the same time a member Of the Senate.
That, Sir, continued the speaker, is true, aud
it is the only true statement contained in the
bill. The inference TO be drawn from the
statement is that, being chairman OF that
committee and q member Of the Senate, !
have neglected my duty as an officer OF the
canal, but do not hesitate to say, and the
records Of the STATE will show, that my posi-
ton in the Senate enabled me to discharge
my duties as canal officer more effectively
and has not affected the interest of the bond
holders except TO place the canal in such po-
sitiOn that IN the future il will be able to
maintain itself and produce revenue for the
benefit of the bondholders. 1t is further
stated that the tonnage Of the canal in 1873
was us, 900 tons and in 1877, COS, 900 tons,
while the net income in 1873 was 100000
and in 1877 it was nothing, and, it is charged,
that while the tonnage Of the canal has de.
creased % per cent. its revenues have de.
creased SO per cent, showing conclusyely, as
they state, that the decrease in revenues is
not TO be attributed 10 depression in business
but to Encouragement by the President and
Directors Of the canal, and to prove this allie
CATION they compare the management ct the
work in the past under the administration OF
President Clark in 1870 and 1871, when sit
was properly managed and economically
managed aud managed for the best interests
Of all concerned" He aims to make the
public mind believe that We have not managed
| 1t as well under this administration as il was
then.
We admit that President Clarks admins
tration was a success, that he managed il
well, but there can be no question, Sir, that
| 1870 and 1871 were two years of grea
| prosperity in this country time when maa
! ufacturing establishments from one end OF The
4 land to the other we're in full blast, when the
demand for Cumberland coal was greater than
at any time since 1850, and when the labor
troubles of d few years ago were unknown
Ia these two years of prosperity, with higl
rates OF tolls-46 cents per ton on COAL aud
| SS,l6 par boat for each round trip between
| Cumberland and Georgetown-he produced q
revenue that was satisfactory, as Mr., Stewart
alleges. Now that revenue was not-$Sg2, ,
l47 .42-satisiactory, as they allege, to tn,
bondholders and 10 all others Interested
The next two years under the present admin
istration (lST2 and 1879 produced net rev
enue Of $49i, Si5.67, an increase Of $lO2,
69s.25 over the two years previous. Their
comes the depression in business Of 1873
Cumberland coal was depressed ia the mar
ket and the canal company, seeing that III,
time had arrived when cheap transportation
and low charges in this coal were necessary
owing to the competition with the ClearGeld
region, then competing for the first time with
the Cumberland coal, commenced series o
improvements on it lines, taking possession o
all its terminal facilities with the view tina
when the crash came it might live by beinI
able to reduce the cost Of transportation Il
Georgetown to figure which the Ballimor,
and Ohio railroad could not touch and wher,
tho Pennsylvania railroad could not reach US
I WIN pDJtNA III fitNf VIC lOOk pflNatg
interests which we regarded as being detri
mental to the interests Of the company ant
demanded they should sell their property t,
the company. OF the bitter struggle which
ensued will not speak. The administration
didits duty through an attack ofpersonal abusl
and yiliitication. Now after the panic OF "a
with reduction in the rate Of tolls, when th,
price OF coal had gone down one third, ",
produced in l6I4-75 net revenue of Sl66
63S.3l, being $74, 400 80 more than produce,
10 1870 and 1871, when it was satisfactory 4
the bondholders. In 1876 prices still de
elined and we we're only able 10 produce tina
year q net revenue of 5000, $500 O
which we paid over 10 these bondholders
In this bill, notwithstanding these figures an,
facts, which were known to every man who /
generally informed in these matters, we or
charged TO have managed the work so as :,
produce no net revenue. In 1876, wheI
prices so declined, we were the only trans
portation line in the United States, dependin
solely upon coal, that maintained its work i
good condition and made a dividend.
The Reading railroad, owning their iron
coal and the means of transporting il, IN,
best line in the United States, not only sns
pended payment Of dividends, but was con
PEELED TO pay its employees in scrip. IN,
Delaware, Lackawanna and Western railroad
the Delaware and Hudson Canal and the Bal
timore and Ohio in 1873 suspended pay
ments OF dividends and suspended for III
simple reason that the price OF coal had de
elined to such an extent and such polnttha