Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1880-02-06
CHESAPEAKE AND OHIO CANAL.
Speech of Hon. A. P. German in the
State Senate.

Mr.. German said 81 am sure the Senate
| will pardon me for consuming its time in max
| ing a statement somewhat personal TO myself,
because ii not only affects me, but is matter
in which the State itself is largely concerned
| 1t is well known TO the Senate that one Daniel
| K. Stewart, a resident Of Great Britain, and
| a holder of some of the bonds of the Chesa-
| peake and Ohio Canal issued under the act OF
| 1874, has filed in the United States Circuit
| Court for the District of Maryland a bill
| against the company and its officers. The
allegations in that bill, stripped Of their legal
verbiage, are substantially that the canal COM
| pany has been managed in the past eight years
| without due regard 10 the interests OF its
| creditors, and simply in the interest OF poll
| ticians, and that they procured the passage OF
| the act of 1873, when it was not necessary
for the interest of the company, authorizing
| the issue of bonds for the repair of the canal,
making them II lien upon the corpus OF the
| work, TO the great detriment of the holders of
| the bonds Of 1874. AS 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 re-
garded themselves as the agents of the State
we have felt it our duty to bring this matter
to the attention of this body, for the reason
that there are matters connected with this
case which induced these gentlemen to bring
question showing the motives which cannot
otherwise be brought to the attention Of the
| public. | desire to say now, as did from
| this spot four years ago, that while the man
| ayers Of the canal do not claim they are in
fallible, none of US are, while minor mistakes
| have been made, there is no act of this ad
| mlnistration to which any one can point with
censure; there has been nothing done but
what was for the best interest.of the canal
and its creditors. Four years ago, the Senate
will remember, individuals and papers of n
section of this State who had regarded the
| revenues Of the canal as the exclusive per-
quisites OF that section, charged US with the
most corrupt motives in paying on account OF
| the overdue interest on these bonds nearly one
| million dollars. Then we were 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 n commits
sion was paid TO the management of the
canal for thus performing their simple duty.
We asked then for an investigation and to
have every one with any knowledge of the
matter 10 come and testify before special
committee of this body. Some of them skulked
behind the excuse of the want OF authority of
this body to compel them to give their testi-
| mony. Some OF The bondholders--men Of
| character, such as Mr.. Corcoran and Geo. S.
Brown--stamped the charge as without foun-
dalton. Now, because of the depression in
| trade and disaster to the work, we have failed
TO continue the payment on account of inter-
est, 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
years ago, we now ask that every act of ours
shall be brought to the light by p committee
of this Assembly, in addition to the proceed
iugs in court"
Mr. G orman then read from the bill filed in
court that part charging that the president of
the canal company (Mr. German is now and
has been for some years chairman OF the dem
ocratc State Central Committee, and at the
same time member of the Senate. THAT,
| sir, continued the speaker, " is true and IL is
| the only true statement contained in the bill
The inference TO he drawn from the statement
| is that being chairman OF that committee and
q member of the Senate, have neglected my
duty rs an officer Of the canal bnt do not
hesitate TO say, and the records Of the State
will show, that my position in 'he Senate en-
abled me to discharge my duties as a canal
officer more effectively, and has not affected
the interest of the bondholders, except to
place the canal in such position that In the
future il will be able to maintain itself and
produce revenue for the benefit of the bond
holders II is further stated that tie tonnage
Of the canal in 1873 was 778, 600 tons, and in
| 1877 COB, 900 tons, while the net income in
1873 was $3.50, 900, and in 1877 il was moth
| ing and it is charged that while the tonnage
| Of the canal has decreased % per cent. its
revenues have decreased So per cent, showing
conclusively, rs they state, that the decrease
in revenues is not to be attributed to depres-
sion in business but to mismanagement by
the president and directors of the canal and to
prove this allegation they compare the man
agement Of the work in the past, under the
| administration of President Clark in 1870 and
1871, when cit was properly managed, eco
nomically managed, and managed for the best
interests Of all concerned 1t aims TO make
the public mind believe that we have not man
aged it us well under this administration as 1t
was then
d" We admit that President Clark 5 admin
istraton WAS a success; that he managed it
well but there can be no question, sir, that
1870 and 1877 were two years of great pros
perity in this country-a time when manufac-
turing establishments, from one end of the
land TO the other, were in full blast; when
the demand for Cumberland coal was greater
than at any time since 1850. aud when the
later troubles OF II few years ago were un-
known. In those two years of prosperity,
with high rate of tolls 46 cents per ton on
coal and IS. l6 per boat for each round trip
|
: produced revenue that was satisfactory, as
Mr.. Stewart alleges Now that revenue was
uot--S392, l47 Unsatisfactory, as they allege,
TO the boudholders and TO all others interest
ed. The next two years, under the present
administration, 1872 and 1873, produced u
net revenue of S494, 845 CT, an increase eff
Sl02, Cos % over the two years prevo
Then came the depression in business Of 1878
Cumberland coal was depressed in the market
and the canal company, seeing that the time
had arrived when cheap transportation aud
: low charges on this coal was necessary, ow-
; ing TO the competition with the Clcarfed
region, then competing for the FIRST time with
the Cumberland coal commenced series OF
improvements Oh its line, taking possession of
all its terminal facilities, with the view that
when the crash came we might live by being
able 10 redace the cost of transportation to
Georgetown to n figure which the Baltimore
aud Ohio railroad could not touch, aud where
the Pennsylvania railroad could not reach us.
With this object in view we took all private
interests which we regarded MS being delr-
Entail TO the interest Of ile company, and
demanded they should sell their property to
the company CT the bitter struggle which
} ensued will not speak The administration
did its duty through m attack Of personal
abuse and vilhca,un
" After the panic Of 1873, with reduction
in the rate OF tolls, when the price of coal had
gone down one-third, we produced in 1874
and 1876 net revenue of S466 63S 81 beng
p74, 400 so more than produced in lS70-'7l ,
when il was satisfactory to the bondholders.
In 1876 prices still declined, and we were
only able to. produce that year a net revenue
OF $50, 900, S5S, 900 OF which we paid over
TO these bondholders. In this bill nolwih-
standing these figures and facts, which were
, known to every man who is generally Inform
, ed on these matters, we are charged TO have
, managed the work so as to produce no net
revenue. In 1876, when prices so declined
we were the only transportation line 10 the
United States depending solely upon coal that
maintained lis work in good condition and
made a dividend The Reading railroad,
owning their own coal aud the means of transA
porting IL, The best line in the United States,
not only suspended pay meul Of dividends,
but was compelled to pay It's employees in
, scrip The Delaware, Lackawanns and Wes-
tern Railroad, the Delaware aud Hudson ca
nal and the Baltimore AID Ohio in 1873 sus-
pended payments Of dividends aud suspended
Tor the simple reason that the price OF coal