The Democratic advocate. [volume] (Westminster, Md.) 1865-1972, 1880-02-07
gPEEOH OF BON. A. ?. aoRMAN.
Management Of the Chesapeake and Ohio
Canal Vindioated.

pardon me Tor consuming Its time IN maxim
statement somewhat personal to myself, be
cause 1t not only affects 4ae, but is a matter il
which the State itself is largely concerned
1t is well known to the Senate that one Dan
lei X. Stewart, resident of Great Britain
and holder Of some Of the bonds Of the Ches
apeake and Ohio canal, issued under the nc
OF 1874, has filed in the United States Circui
Court for the District of Maryland a bill
against the company aud its officers. The
allegations in that bill, stripped of their lega
yerbiage, are substantially that the cana
company has been managed in the last eigh
years without due regard TO the interests o.
its creditors, and simply in the interest Of
politicians, and that they procured the pas
sage of the act of 1878, when il was not ne
cesSary for the interest Of the company, au
thorizing the issue Of bonds for the repair oil
the canal, making them a lien upon the corpul
of the work to the great detriment Of III,
holders OF the bonds Of 1874. As a matter o
course, the canal company will answer tina
bill in proper time and in the proper place
But as those who manage the work hav,
always regarded themselves as the agents oil
the State, we have felt it to be our duty u
bring this matter to the attention of this body
for the reason that there are matters con
nected with this case which induced thest
gentlemen to bring this suit in court, aud fact;
bearing on this question showing the motive.
which CANNOT otherwise be brought TO the at
tention of the public ! desire to say now, al
did from this spot four years ago, that while
the managers of the canal do not claim they
are infallible-none of US are-while minor
mistakes have been made, there is no
act of administration to which any one car
point with censure; there has been nothing
done but what was for the best interest Of the
canal and its creditors.
Four years ago, Mr.. President. the Senat c
will remember, individuals and papers Of II
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 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 a commission
was paid to the management Of the canal for
thus performing their simple duty. We asked
then tor 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 disas.
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 bondhoders 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 committee
OF this Assembly ia 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.. Gormanl is now
aud has been for some years chairman of the
Democratic State Central Committee and at
the same time n member of the Senate
That, Sir, continued the speaker, is true, and
II Is the only true statement contained in the
bill. The inference to be drawn from the
statement is that, being chairman of that
committee aud q member of the Senate,
have neglected ms duty as an officer of the
canal, but | do not hesitate to say, and the
records Of the Sta,e will show, that my posi-.
ton in the Senate enabled me to discharge
my duties as a canal officer more effectively
and has not affected the interest of the bond
holders except to place the canal in such pc.
slton that in the future it will be able to
maintain itself and produce revenue for the
benefit of the bondbolders. 1t is further
stated that the tonnage of the canal in 1873
was IIe, 600 tons and IN 1877, COS, 900 tons,
while the net income in 1873 was $230,O0O
aud 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 conelusiyey, as
they state, that the decrease in revenues is
not to be attributed 10 depression ia business
but to Encouragement by the President and
Directors OF the canal, and to prove this allie
CATION they compare the management Of the
work IN the past under the administration OF
President Clark in 1870 and 1871, when alt
was properly managed and economically
aud managed for the best interests
OF all concerned He aims to make the
public mind believe that we have not managed
It as we'll under this administration as it was
then.
We admit that President Clark's admins.
tration was success, that he managed it
well, but there can be no question, Sir, that
1870 and 1871 we're two years of great
in this country time when man
uiaeturing establishments from one end of the
land 10 the other were in full blast, when the
demand for Cumberland coal was greater than
at any time since 1850, and when the labor
troubles of few years ago were unknown.
In these two years Of prosperity, with high
rates OF tolls-46 cents per ton on coal aud
". 10 per boat for each round trip between
Cumberland and Georgetowu-he produced
revenue that was satisfactory, as Mr.. Stewart
alleges. Now that revenue was not-$3g2,-
l4I. 42-satistactory, as they allege, to the
oondholders and TO all others Interested.
The next two years under the present admin.
stration (lsl2 and 1879 produced net rev.
snne OF 9l,Si5.67, an increase Of Sl02,.
3Se.2o over the two years previous. Then
comes the depression in business of 1878.
cumberland coal was depressed 10 the mar.
tet and the canal company, seeing that the
lime had arrived when cheap transportation
and low charges liz this coal were necessary,
owing TO the competition with the Clesrfield
-egion, then competing for the first time with
he Cumberland coal, commenced series of
improvements on it lines, taking possession of
Ill its terminal facilities with the view that
xhen the crash came it might live BY being
lble TO reduce the cost of transportation 10
Georgetown to figure which the Baltimore
md Ohio railroad could not touch and where
he Pennsylvania railroad could not reach US,
With this object in view, we took all private
interests which we regarded as being detr.
mental to the interests Of the company and
demanded they should sell their property to
he company. OF the bitter struggle which
.nsned will not speak. The administration
iidts duty through an attack ofpersonal abuse
md vilihcatlon- Now after the panic of "a, |
with reduction 10 the rate Of tolls, when the |
price OF coal had gone down one.third, We
Produced in ls74-75 net revenue of sIe6.. |
1881, being S74, 400. so more than prodsced |
q 1870 and 1871, when it was satisfactory to /
ne bondholders. In 1876 prices still de. |
lined and we were only able TO produce thar |
rear a net revenue OF see, 200, S5S,OO0 of 1
which We paid over to these hondholders.
In this bill notwithstanding these figures and |
acts, which we're known to every man who Il |
generally informed in these matters, we are |
'harged TO have managed the work so as to |
produce no net revenue. In 1876, when 4
prices so declined, we we're the only trans. 4
'ortation line in the United States, depending |
'olelly upon coal, that maintained its work In |
rood condition and made dividend.
The Reading railroad, owning their iron.
oai and the means of transporting il, the
'est line IN the United States, not only aus.
'ended payment Of dividends, but was com.
'elled to pay its employees in scrip. The
delaware, Lackawanna and Western railroad.
he Delaware and Hudson Canal and the Bal.
more and Ohio in 1873 suspended pay.
ienta OF dividends and suspended for the
nipple reason that the price OF coal had de-
linea to such an extent and such n point that