Morning journal and courier., 1882-05-17
Wednesday Morning, May Is, 1882.
RAILROAD RETURNS

Those who have money to invest for them ] selves or for others and would like to put il
 into some good railroad security" have sev | eral difficulties to contend with. One o1
 these, and very important one, too, is that
 1t is impossible, in most cases to discover
 from the printed returns the real condition
 of railroad. Even If the figures given are
 honest they are 'behind the times" Last
 week number of important railroad returns
 were published, which returns brought 1 down the statistics of the roads to the first ol
 last January! That is to say, the large class of small investors are told to day what the
 managers of the roads knew four months
 ago. Nearly all the railroad companies ot 1 the country follow the plan of letting the 1 stockholders who are not directors and the 1 public know little about the condition o1 1 their property until such knowledge ceases to l be useful.
 It is easy to see that no system could be l devised which would be more for the interest of the few rich operators in railroad stocks than this. By knowing the real condition of railroad properties long before it is made public, or by making public cooked" fig ures they can send up worthless stocks or depress valuable ones, and cheat everybody who accepts their statements and invests money on the strength of them. The worst harm is not done to speculators-they, per haps, deserve to suffer some-but to small investors. AS the Financial Chronicle says ssThis system of ,concealing accounts not only enriches our largest capitalists but puts widows and orphans and the immense class of small investors-to protect and encourage whose investments should be the aim of a government like ours-entirely at their mer- cy. What railroad security is it possible for a man, with 8 few hundreds or a few thou sands, to purchase today with complete safety? Only in 8 few cases can he know what he is buying. Even if it is high priced bond, the annual report, issued four months after the year expires, may tell him earnings are short of paying the interest, and then he wakes up to the fact that prices have seriously declined, and to the further fact that the cunning managers, knowing the truth as to earnings while they kept him in ignorance of it, have sold out their holdings EO u1n alu OIuer OVer-COnuulDS OuCSlQerSS For it is 8 remarkable circumstance, that when in the case of one of these close cor porations the actual condition of traffic be- gins to be really unfavorable, not only is that condition concealed, but the outside rumor becomes for time peculiarly glowing" An other damaging effect of the system is to bring our railroad securities into disrepute in other countries. We are now sending gold to Europe when we should probably be sending securities if the Europeans had any way of knowing their worth.
 At least partial remedy for this state of things would be to compel the railroads to make speedy and easily understood returns. The Chronicle suggests stringent law con- polling every railroad to publish a monthly statement made up on a certain uniform plan. It believes that if New York would enact such law all other States would fol- low. To the reply that it takes time to com pile the returns, the reply is made that the gross earnings of the largest roads can be told at once, while the net result could be made up, at the longest, inside of thirty days. Such law might lessen the gains of some of the great stock operators, but if rigidIy enforced it would save small inYes tor a great deal