New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1880-05-22
READING GOES DOWN.
fcuntinuea fror. FIrst Raes.l

NNV''''~N~'S'
Pottsyille were run In January, 1912. Since that
time many short lines have been merged into the
mann road, and the company has acquired . large
amount of property. Originally chartered TO build
line from Philadelphia to Reading. and afterward
to Mount Carbon, o total distance or about Soi2
miles, the company controlled and operated at tne
time Of its failure nearly 300 miles OF road
It ACQUIRED by lease little moro than year
ago the North Pennsylvania and the Delaware ana
Bound Brook Railroads. The main line of the Read
ing Road extends through the Schuylkill Valley and
it's numerous branches carried to market the product
of the two southern coal fields of Pennsylvania
The principal business of the railroad company was
the carrying of coal from these fields to tidewater
at Port Richmond.
The Coal and Iron Company was organized for
the purpose of buying and operating coal mines in
the interest of the railroad company. 1t was char
tered under its original name OF the Laurel Kun
Improvement Company on May IL, 1871, but IN
December of the same year the name was changed
to its present title. The railroad company owned
the whole of the stock, $S.000,0OO, and bonds
issued by the company to the amount OF ABOUT
$4O,O0O,000. The creation OF the Coal and
Iron Company was due to Franklin B. Gowen
who had been elected president OF the
railroad company the year before. He had been for
0'~
accession to the presidency he proposed the organ
| ization of tho new company. 1t was the first
instance of the kind this country, but the plan
had been borrowed from the action OF certain Eng
| lsh companies which had become rich by the ad-
vance in value of their coal lands. The scheme was
approved by the managers of the railroad company.
At once the new company began the purchase OF coal
lands, for some of which it paid very excessive
prices. Owners of coal lands were made rich by the
| sale of property at rates which had hardly been
dreamed of. 1t has been admitted since by irlends
of the companies that these purchases were made IN
anticipation of the company's needs, but IL was
urged that the ultimate prosperity OF the company
was assured by its absolute control of these coal
fields. 1t was asserted on the other hand that the
company never could realize from some OF the prop
! critics sufficient to pay even the taxes,
Mr. GOwen assumed publicly oil responsibility
for the purchases of coal lands. At meeting OF
share and bondholders of the railroad COM
pany. held in London in June, 1877. he de-
| Tended his action tho ground that the
valuo of tho railroad property depended
wholly upon the ability of the company to control
| the product of the coal fields through which It's
lines run. The purchase ana development OF
these lands involved the outlay of over 500, OOOOO
! for the payment of which the railroad company
was mainly responsible, In consequence partly OF
|
| to meet its interest in 1877. Holders OF tho com
Danys securities agreed to accept scrip IN payment,
bnt the floating debt, which was then. over
So, 900 900, was not materially reduced! AT the
London meeting in 1876, when the proposal to pay
| the interest in scrip made to the English BOND
| holders, President GOwen said, referring to the
| possible danger Of foreclosure:
II do not say that it would be easy to pull
through without Your assistance, and it would be
sort of Purgatory for the time being if had to
| attempt it, We do want tho money your forDear-
| nnce will give u.s. but cannot believe that even
without il there is any power that could force the
| Philadelphia and Reading Railroad Company to
foreclosure in the face of the large business we are
| now dong. l frankly admit, almost III tones OF
snpplication to you that we are very, very poor
but do not think mo egOtstical when say that we
are trying to be honest"
The funded and floating debts of the two com
panies have been increased to enormous hglres
| Tie common and preferred stocks of the railroad
company amount to 34,27S,175, and according 70
the companys report for last year, tho funded IN
lebtedncss 10 77, 024, 761, and the floating deDtt
and other liabilities to 81 ,65O279. The STOCK o.
Inc Coal and Iron Company amounts to $S OOO,OOO
and the bonded and other indebtedness tc
So, II ,934 The railroad company held OF thest
the entire stock and nearly $4OOOO,OOO bonus
The entire capitalization of the two companies
omouutcd n 1904 573 $50,