Savannah morning news. [volume] (Savannah) 1868-1887, 1881-05-12
THE GEORGIA RAILROAD.
TIE STOCKHOLDERS CONVEN-
TION YESTERDAY.
Ihe Lease to the Central Formally
Aat1hed-President PhInizy,s Re.
port-The Reasons for the Lease
Set FOrth-The Dividends TO be
Paid on the Stock.

AlOnes although 1t is understood that the
Louisville and Nashville and the Central
Roads and prominent railroad magnates in
dorse aud share in the lease of the Georgia.
The directors were instructed to pay 50 so
dividend on the 18th OF July and So so in
October, after which 81 so per share will be
paid quarterly.
This lease is all important to the Central,
and secures to Savannah direct llue to the
West, thereby making her the South Allan
tic outlet for Western business through
Georgia. President Phinizy was re elected,
and Mr.. Ferdinand Phinizy takes the place
of Mr.. George jackson on the Board of Di-
rectors. The reports of the officers Of the
road were read and adopted.
Georgia and Central stocks are in dc
mand. General Alexander says Georgia is
worth $50. He leaves tomorrow for New
York. A combination of the Memphis and
Charleston and the East Tennessee, Virginia
and Georgia Roads is rumored. The stocks
OF all are strong.
At the above mentioned convention OF
stockholders of the Georgia roads, the re-
port Of President PhlnizY stated as follows:
A comparison with the business of the
previous year shows an increase In gross
earnings of $500, ,440 2S, and in expenditures
of SlSS, 1913 So. The increase In expendi-
lures is largely due to the Improvement in
equipment. During the wear we have built
10 our shops 40 freight cars, purchased 6
conductors cars, 2 sleeping cars, paid for 4
passenger coaches, and purchased new
freight locomotives Of large capacity.
There has been expended in the ex-
tension Of the elevator building,
machine shop and car shop, So, $50 50. The
large increase in the volume of tonnage has
also necessitated the movement Of larger
number of trains, thereby adding materially
to our expenses. At the same time the
revenue has not increased in proportion to
the freight. The mile tonnage for the
year was 49, ,961, ,644 tons as against
81 ,OS5, ,356 tons for the preceding
year, an increase of Il, ,ST6, ,2SS tons, "a ~ 100
per cent, while the revenue from this
source shows an increase of only IS so 1C0
per cent. The average rate of carrying
freight was 2 l3 100 cents per ton per mile,
and for the previous year 2 46 100 cents.
This is due principally to a reduction in
rates by the Commission, aud partly to the
low rates at which competition forced us to
haul through freight. The direction has
submitted to the Commission, neither for
the reason that the Commission has not in
jured US, nor because the company had
10 alternative but to submit, but be-
cause It was believed that refec-
tiOn, observation and experience would
soon convince the Legislature and the peo-
pie that it Was mistake to attempt to au-
| thorize such great interference with railroad
property, and that important notifications
| of the law might be hoped for at an early
day. The direction believe that certain
| irrepeaiable provisions of our charter in
reference 10 freight and passenger tariff can
I be invoked for our protection whenever the
mandates of the Commission become IL
| tolerable. Notwithstanding the reduction
in rates the prospects Of the company are
encouraging. The business is constantly
! incr1 asing, and with the completion Of the
| improvements now in progress expenses
will be materially lessened.
| President Phinizy, In explanation of the
reasons that necessitated the lease to the
/ Central Railroad, also submitted the follow
/ ing.
SUPPLEMENTAL REPORT.
| To The Stockholders Of tie Georgia Railroad
and Banking Company:
It is not many years since the maxims OF
| commerce, applied to railroads, kept them
| disconnected with each other. Whenever
| two roads eptered town or city, the com
mercial interest of the town or city, as it was
then conceived, required a break in the line
of transportation.
The first step in the development of rail-
road business was to close such gaps, by
/ making actual physical connection or diff
ferent roads, while their respective manage
ments sill remained distinct, and might be
/ unfriendly. The next step was agreements
between roads, physically connected but
| legally distinct, for through transpor-
| tation and ratable division OF
| freight. The latest phase of development
! is the union under one head of both
] rails ard management Of several or many diff
/ ferent roads taking up the commerce of ex-
| tensive areas of territory. Without, per-
/ haps, the conscious recognition OF the TACT
/ by the workers themselves, this stage OF de-
\ velopment has wrought out in commerce
| the analogy Of great river in nature, gath
/ ering up IN its main channel, and through
| the branches which flow into it on its right
! and left, all the waters Of some vast basin
/ aud its surrounding hills and mOuntains,
and dischsrging them at its mouth into the
| exDectant ocean.
This phase of development IS going on
now with tremendous energy. All condi-
| tions of railroad situation are made to yield
to It. 1t is the inevitable result OF the strug-
| gle of the enormous volume OF freight pass
| ing between the remote parts OF vast
| country In order to handle it all success
| fully, such arrangements must be made as
I to render its flow free and unobstructed,
rapid and smooth. This effort to form un-
| broken lines of great length and reach,
| while it seems to be in the natural and
proper direction OF railroad development,
! appears also to be irresistible. Any single
| road necessary for the accomplishment OF
such scheme is sure to be acquired for it.
| Anv single road which might thwaTt or
| Obstruct the general scheme Is sure to be
strangled.
Two methods for acquiring particular
roads for such general schemes are prac-
ticed. Either, on the one hand, to purchase
or lease the road; or, on the other hand,
TO buy up a controlling interest in its capital
stock. When the purchase lease method
is adoDted, the road to be affected has q
voice in the transaction; It is bought or
leased upon its own terms and with such
stipulatiops as are intended to protect its
owners. Where the control OF the desired
road is obtained by purchase OF Its stock,
the company, the corporation, Is Ignored,
and there is no prOte elton provided Tor
its stockholders. In this way stockholders
other than those In the combination, might
find their road operated in the interest OF
combination alien to their interests.
In this connection 1t is proper to remark
that IL would not be necessary in any given
instance to buy up majority OF the stock
of a corporation in order to obtain practical
con1rol of its corporate affairs. The con-
centration of wo-fifths OF the stock In any
one hand would doubtless control the action
of any meeting of stockholders which it
might be practicable to hold.
The Georgia Railroad has been In great
periI of this latter fate for some time. A
most important and valuable link IN the
movement Of freight between the North
west and the Southeast, its control has been
much coveted. Could 1t have secured its
Independence for all time, or for an indef-
mite period, it might have been well for 1t
to maintain its independent position; but its
Independence was greatly imperriled in the
manner above indicated. Indeed, there is
reason to believe shat the process OF buying
mn its stock, for the purpose of controlling
the company's action, had at one time be-
onn I'm earnest. Had it succeeded, one
hsIf. nerhaps three-fifths, OF the stock
would have been at the mercy OF the other
half or two fifths. concentrated and con-
trolled in a foreign interest.
Of this nprfl to the