New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-07-06
SOME GRAVE CHARGES.

Mr. GoWen, president of the Philadelphia
and Reading Railroad, is either the victim OF
an atrocious libel, or he is one of the
most shameless and dishonest scamps still
out Of confinement. Either "a great libel suit,
or a speedy Indictment for gigantic fraud, Is
IN order. For, if Mr.. GOwen has been llbelled,
he ought to proceed at once against the authors
of pamphlet about to be printed in London,
from which extended extracts have been made
public here. If he has not been libelled in this
pamphlet, then he has been guilty OF cooking
accounts for years, Of perpetratlng frauds
upon the shareholders and creditors OF the
company, and of grossly disappearing Its
condition and indebtedness IN order to borrow
more money. If Mr. Gowen does not take an
early opportunity to prove that the statements
of this pamphlet are untrue, the public will
form a very definite and not at all favorable
opinion of him.
The pamphlet sets forth figures which are de-
clared to be taken from the books of the company,
and includes letter from Mr.. Smith to Mr.. Nc
Calmont, based upon the report Of the celebrated
Committee of Investigation appointed in 1876.
1t is charged that in 1875, when the company
officially reported floating debt of $4,000
there was actually floating debt OF
81. 9S3, O55 due by the railroad company, and
So, 1870, $50 by the coal and iron company-in
all $7,114,30 that year after year, by de-
ceptIve bookkeeping and cooked accounts, the
railroad company was represented as making
profits, which were due entirely to pretended
transactions with its other self, the Goa
company; and that the dividends paid
during the five years, 1871 to 1875,
vh no
amount actually earned in those years was
only So, 347, $50. For example, it is charged
that the Reading Company includes the sum
Of 1898, 1873 as profit on lands Sold" whereas
the railroad company actually came into pos
session of the lands in question, upon the
merger of the Schuylkill and Susquehanna
Company, Mt q valuation OF only S118,61S
and then sold" them to its other self, the
coal company, at a profit" as reported. 1t
Is charged that deficiencies of the coal and
iron company, amounting to $2,166,4 2O
which the railroad company had to meet, were
disregarded in reports and that the railroad
company was at the same time credited with
S21O2 $40 due to it as interest from the coal
company, but not received. as if that sum had
been actually paid. In this and other similar
WAYS it is claimed, the pretended receipts Of the
railroad company were falsely and fraudulently
swelled during the five years, 1871 TO 1875
inclusive, by S15 1913, 03S, as follows: Inter-
est charged to coal company, but not re-
ceived, $6,940.537; amounts paid to meet
debts of coal company, $5,559,104; discounts
on railroad cOmpany's loans, charged to coal
company. $2,226,175; interest charged to
leased roads and telegraph lines, $669,779;
loss IN working coal and iron company, ex-
elusive of interest, 1927, 444.
The letter of Mr.. Smith, said to be the first
printed in the pamphlet, charges that there
were two sets of bOOks-those of the railroad
company, which were exhibited to the world,
and those of the coal company. which were
not exhibited-and that this method has been
used to hide the losses Ii charges, also, that
the systematic Misrepresentation, In order
to make 10 per cent dividends apparently
warranted, was desired 10y Me,srs. McKeen
and Borie because they had bought 10000
shares of the stock on speculation, without
paving for it, and had it carried for them at 6
per cent interest. AS long as they could get
10 per cent dividends, they cleared the
difference of 4 per cent whether the
company earned its dividends or not, and the
real floating debt. Mr.. Smith charges, was by
Mr.. Governs direction kept out of the item.
debts due by the company" After borrow
ing $10,00O,000 in January, 1876, which
Mr.. Gowen promised should be used to supply
a working capital for the coal company, the
concern did not reduce its floating debt, and
sustained actual losses, it is charged, on the
business of the coal company of S1,477,934
in 1876, of $1,755, $50 in 1877, and of
81, $40, 1875 in 1873. These losses alone
would account for the increase of the
floating debt from $7113,3 O4, the
amount reported by the Investigating
Committee to exist in 1876, to the amount
now commonly reported as existing, namely,
about $l3,O0O,00O. Yet Mr. 6owen has gone
on borrowing right and left, and concealng
facts and abusing and beratng everybody
who tried to tell any truth about his perform
ances. If he has not been able to borrow
money enough to carry out another big stock
operation by paying large dividends not
ealned the fact indicates that. even Il, TO the