Savannah morning news. [volume] (Savannah) 1868-1887, 1882-02-25
CENTRALRAILROADA AGAIN
JUNIUS EXPRESSES HIS VIEWS.

He Thsnks General AIexander,s
Policy JustIf1able And Quotes
Figures aud Cites Facts TO Sustain
His Judglnent-AL the Same Time
has EVery Confidence sn Colonel
Wadiey's Sterling Integrity.
| Editor Morning NesOs l am glad that Gen.
Alexander has explained more fully. His
letter in your issue of the 23d instant is clear
and unmistakable. In passing upon his
plan as compared with that of others, moth
ing is gained by heaping denunciations or
abuse on either him or his opponents;
neither would be robbed of a single adhe-
rent, though the measure Of villiflca-
tion rose to a height before which the Gizeh
of Cheops psled.
| The opponents of the ocean steamship de-
| benture charge that the scheme of General
Alexander means the dismemberment of
our "great corporation" and, that after that,
| with fettered limbs and eyeless it will walk
forth second Sampson without his after
story in wreGkiug vengeance upon it's de-
stroyers. The proposition of General Alex
ander, as shown by his letter, is the ex-
treme opposite of dismemberment. Had
General Alexander proposed to realize or
supplement a cash dividend from the
sale Ot the assets of the company, then
could his opponents, with some show
of justice, have accused him of attempting
disintegratton, though Colonel Wadley
would furnish parallel for 1t in bis report
to the stockholders December I'd, 1872.
After casting up the operations of the wear
there occurs this paragraph on page 6:
"The foregoing statement shows that the
| net earnings Of the past year have not been
equal to the usual dividend, but inasmuch
as the deficit has accrued on the Southwest
ern Road, which was more seriously affected
than either of the other two by the very
short crop OF 1871, and in view of the fact
| that that company brought very consider
able surplus over and above its dividend at
the time OF its lease, the board has deter
mined to declare the usual semi-annual
dividend OF S. a share, payable so soon as
securities which are held can be made avail
able, or whenever the financial condition of
the company from other sources will Justify.
Here Is dividend declared partly not out
OF the past earnings of the Central (msrk
this) nor in anticipation of future profits
but from money to arise from the sale of
assets-that, too, in year of railroad de-
preston and short crODs, the great precur-
sors of the crash of 1873 Was that time
to divide the assets of the company or mort
dendsS II disaster had overtaken the ehip.
would not ke have been the wise mariner
who would have reefed his sails and put his
PROV to the wind? But you may tell me that
it was better at that time, for strategic rea-
sons, under full canvass, to have def I'd the
storm and maintained full dividends
though dealing death TO the corpus. | do
remember that about that time, when the
Macon and Western Railroad Company
was absorbed by the Central, vague rumors
about limited guarantee filed the air.
trsceable to no reliable source, but that
some brokers, in offering Macon and West
ern Railroad stock for sale were willing TO
guarantee 10 per cent. annually for two
years. The terms of this amaIgatiOp. as
VIGOROUSLY understood, were perfect equali-
ty between the shareholders of each with
out guarantee to or from either II there
was any inside arrangement, OF which the
above dividend was. a necessary result, It
were better had 1t gone to the world specif-
cslly as such and It's declaration not permit
ted TO rest upon grounds so untenable and
so uDjustifable as those assigned in the
paragraph under review.
For this conclusion one is not confined
to the declarations aud figures of the rep0rt
of 1872, but turning to the subsequent re-
port, dated December %, 1873, we find on
page o, $4O7 900, paid out in that year, but
chargeable to the previous, which reduces
the net income Of 1872 to 1920 OBS O5. or
less than per cent. on $500, 900, while 10
per cent. was paid with the aid of the sale
Of assets. With the light of these figures
that proper system of bookkeeping, at
that time, should have brought to the atten-
tion OF the management, how much better
the herein below quoted psragrsph
would have sounded preceding rather than
following the one previously quoted. They
are Colonel Wsdley's own words, on pages
and of his report of 1873. ''From The
foregoing statement of earnings and ex
penses 1T will readily be seen that the de-
claration of a dividend is wholly incon-
sistent with prudent management of your
financial affairs. This the board regrets ex-
ceedingly, but 1t is beyond their power TO
change, and 1t is believed to be sound policy
to place your financial condition bevond
doubt rather than yield to the temptation
OF distributing money that has not been
fairly earned y
In December, 1874, the affairs of the Cen
trail had become so.embarrassed, and the dis
satisfsction of stockholders deprived of
their accustomed semi-annual stipends so
great, Colonel WadleY invited an investigs-
tion Of the affairs of the company. Accord
inglY, committee of five were appointed
who Immediately entered uoon the tnvesti-
CATION, and formulated their labors into a
report, which they submitted at the next an
nual meeting OF stockholders, in December,
1875 1t was an enormous labor for the
time allotted, and gTatuitOusly rendered.
Its conclusions have stood unimpeached
and unimpeachable, yet, in the very
teeth OF their terrible analysis OF
the company's condition. dividends were
resumed. The committee took as their
basis the report Of She condition OF the
company August 31st, 1874, after dividend
Of four per cent. had been declared and
paid only three montbG before. If the in
vestigating committee correctly pictured tie
comDaDy's condition, the Jupe, 1874, divi-
dend has less TO justify it than the last one
before the default. 1t was dismemberment
aud di integration in it's last analysis. The
only reason conceivable for It is that the I
company's condition was so involved In a
labyrinth of accounts that the management
were unadvlsed Of its real condition until
laid bare before them by the scalpel OF in
vestigatiol.
From June, 1874, to December, 1877, the
company defaults in dividends to resume at
latter date IN five per cent. per annum,
aud by gradual advances reaching eight |
per cent. per Gnnum in 1881.
The period between these dates marks an
Important link in the company's eventful |
history. The failure to pay dividends and
gloomy future, always pictured fer the |
company by its management, drove the |
value OF its shares to thtrty-three dollars for |
tne par OF one hundred dollars, and the /
writer on one occasion was forced to sell five |
shares to complete the education of a minor, |
for which he received less tha4 one snare |
commanded In Juue last. For the widow |
and orphan it was indeed an Egyptian
night, because In days past there was such |
confidence in its management and it's reye-
nue-prodpcing capacity, that hundreds in |
vested everything they had in it.
About the close of these dark days q star
arose in the west, and from the Atlantic to
the Mississippi the Central is absorbed In
grand system OF through transportation,
and It's future as a six per cent. security
assured to its holders. But, fortunately for
its long suffering shareholders, the alliance
was dead ere 1t was alive; for in two years.
from the date Of the annihilation OF this
combination, a second searching analysis of
the company's condition-not this time by
an investigating ommittee-discloses to
view mine OF hidden hidden treasure. su,,a
Time we thought, and said, ourselves SO
poor, and our stewards refused to
advance but mere pittanee on