Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1881-03-09
Aallcaster t1lteiI,Ge,lrer.
WEDNESDAY EVENING. MAR. 8, 1881.
That Railroad Purchase.

lR0t KailrOad Purchase.
The great operation OF the Pennsylva-
Ma railroad, in buying controlling inter-
est inthe Philadelphia, Wilmington s.
Baltimore railroad, was enthusiastically
applauded by the stockholders. The fair
presumption is that the purchase was
judicious, as the managers of the Penn
sylvania road ought to know just what
the Wilmington road is worth to it.
Still it does not seem to have been very
wise in the Pennsylvania stockholders
to take this sagacity of their directors
entirely for granted, and applaud their
purchase, without even knowing the
price they had agreed to pay. So large
an operation would have received the
careful consideration of prudent owners.
Twenty million dollars is a great deal of
money to authorize railroad directors to
raise and expend at their discretion. 1t
is a great vice in the management Of our
great corporations that the owners are
not consulted, about the vastest opera
tions, before they are entered into. The
managers act as though they were own
ers when in fact they generally have but
tri1ing interest themselves in the pro-
perty they administer In this case a
great railway was contracted for by the
Pennsylvania managers just twelve
hours before the Pennsylvania stock
holders assembled in annual meeting.
To the unsophIsticated mind it would
have seemed proper for President Roberts
to have withheld the conclusion of
this contract until the stockholders
had considered it's advisability. To the
man of ordinary sense it would have
seemed natural that the stockholders
should be indignant that their president
appeared before them and informed
them that on the previous midnight he
had bought railroad for them and
wanted twenty million dollars to pay for
it. TO moderately acute human mind
it would seem that a president who takes
the authority to make twenty million
contract, without the advice Of his own
ers, might as well he conceded the power
of issuing the stock to pay for it.,
without asking the stockholders sane
tion. Certainly if Mr.. Roberts contract
for the purchase of the Wilmington
stock was valid, and his company was
bound by it, the provision OF the money
to pay for the road followed as matter
of course. If it was not furnished vol
UNFAIRLY the company would have been
made to provide it involuntarily. And
if, on the contrary, the contract was not
valid without the stockholders assent,
all excuse for seeking to make it without
such assent, was taken away. That eX-
cuse no doubt is that extreme secrecy
was needed in the conduct of the opera
ton, SO that the prize might be grasped
from others who were eagerly holding
out their hands for it. That excuse
would not exist If tie contract did not
become contract until the Pennsylya-
mia Stockholders had assented toit.
We do not greatly doubt that this pur-
chase was in itself wisely made though
it is said that new railroad could b.
built for great deal less money. We
do not question the sagacity of the
Pennsylvania railroad managers. They
doubtless knew what they were about.
But we do say that it is not proper
for stockholders to put themselves SO
unreservedly in the hands of their mana
gers, and permit them to enter into great
contracts without first submitting their
proposition to the Judgment of those of
whom they are theoretically the ser
wants. Wedo not believe in the Ero-
priety of making railroad managers the
masters and reducing railroad owners to
the condition Of recording instruments
Of their will.