Savannah morning news. [volume] (Savannah) 1868-1887, 1882-10-04
THE L. AND n. RAILROAD.
HOW THE COMPANY BOUGHT
ROADS THAT Do NOT PAY.
Only a Part of the Condition of the Com-
pany Heretofore Disclosed-Its Power
full Competitor.
Neac York World.

Nec York World.
Inc disclosures made in the World as To
the condition of the Louisville and Nash
vile Railroad Company have aroused great
interest not only among those who have in
vested in the company, but among the pub
lie at large, which is indirectly affected bv
the condition of one of the greatest corpo-
rations in the country. The mistakes and
errors which have brought the company to
Its present condition were the subject of
endless comment and gossip at the clubs
and hotels where the affairs of the dav are
discussed. The policy of building hun
dreds Of miles Of road through the medium
of call loans was unanimously denounced
by those who have any intelligent knowl-
edge of such matters. A gentleman who IA
a stockholder in the Louisville and Nash
Vile Road, and who has unusual facilities
for obtaining an insight into the
interior WORKINGS of railroad corporations.
said to World reporter last night:
Il remember, IS do all who have been
observers OF the conduct OF the companv.
that last winter the existence of anv
hoating debt to anv serious extent was posi-
lively denied by the management; vet at
that time the debt had assumed enormous
proportions, far greater probably than even
the Board OF Directors themselves imag-
ined. The facts were studiously witbbeId
until cOncealment became no longer possi-
Bile, and In consequence came the break
down In the price OF stock from over par
to the neighborhOod Of 60, the present fig
ure.
"When the scheme was devised for the
issue Of the funded $40, 100000 trust bonds,
friends Of the management and those who
held other securities of the COMPANY were
induced to subscribe for these bonds unon
the unqualified assurance Of the manage
ment tnat II relieved the company perma-
nently from all embarrassment and placed
1t upon sound basis. In q short time
however. 1t cropped out that oply mart of
the true condition of the company had been
reluctantly disclosed. There was vet still
further floating debt, for which 50 600 OOO
Of car-trust bonds were Issued, with ali the
attendant burdens imposed by the creation
OF such life-sucking attachments as are
peculiar to customary car-trust securities.
One of the greatest mistakes of the
present manage ement of the road, it is now
universally conceded, was the wild project
OF building the Pensacola and Atlantic
Road through the sand wastes and bsyous
or Southern Florida. The road when com
pleted has nothing to depend upon for
traffic but lumber aud the limited winter
travel Of Florida tourists and invalids,
None but those Of the most ssnguine tenn
perament and least sound Judgment
expect that the road will earn It's running
large land grants threaten to prove a delu-
sion and a snare; it being well known that
countless thousands of acres of land in
Florida, similar to the land lying on the line
of this road, can be had almost for the ask
ing.s
"The unexplsinable lease OF the Georgia
Railroad in conjunction with the Georgia
Central Railroad guaranteeing ten per cent.
on its stock, was another grievous blunder.
aOd hoc
direct connection with the Georgia Railroad
and the relations between the two roads
were all that could be desired. The deficit
under the lease last year was nearly $3.50, 900,
the burden of one-halt of which falls upon
the luckless stockholders of tbs Louisville
and Nashville Road.
"The extraordinary price paid for the
control OF the Louisville and Cincinnati
Short Line imposed another heavy burden
upon The Louisville and Nashville Company.
This road, only few years ago, went into
bankruptcy and was In the hands of re-
ceiver for several years, failing to pay the
interest on less than SO 900, 900 Of debt. Yet
the Louisville and Nashville assumed to
pay interest on it's watered and increased
obligations OF over $1,000 900. The
building Of the sO-called Knoxville
Branch Extension was another improbable
Investment OF the stockholders money
This road runs through the mountain fast
nesses of Southern Kentucky, and Is at the
best questionable and doubtful expendi-
ture. The early completion of competing
lines is another danger that threatens the
future of this road. 1t is well known that
the Erlanger system is weaving an iron net
work around the Louisville and Nashville
system, striking It at some OF its most vital
points. The road DOW building from Meri-
dian, Miss, to New Orleans takes a shorter
cut to New Orleans.
Huntington, with his Chesapeake and
Ohio system, has within sixty days opened q
competing line with the Louisville and
Nashville Road from Louisville to Mem
phis. The most formidable competitor,
however, that threatens the very existence
Of the Louisville and Nashville Road is the
prof scted so called Louisville and Southern
Road, extending from the city of Louisville
TO the nearest point on the Cincinnati
Southern Road, about seventy-fve miles
only. This will bring the great competitor
of the Louisville and Nashville Road into
the city of Louisville itself and give the
Cincinnati Southern the shortest and most
direct line to nearly all points now reached
by the extensive Louisville and Nashville
system"
The World also publishes the following
special. 1t shows how the management has
blundered:
LOUISVILLE, October 1.AThere is some
anxiety felt here as to the effect that the |
bottom falling out Of the Louisville and |
Nashville Railroad will have upon the for |
tunes Of this city. Much consolation is |
felt, however, in the thought that IS long |
as the aft airs of the company were managed |
by Louisville men the company was very |
prosperous, and 1t was not until 1t was taken |
hold of by Mr.. Baldwin and his associates |
in New York that it started upon the road |
to bankruptcy. Attention has been directed |
by publication in the daily papers to the |
following facts and figures extracted from |
the official statement of President Baldwin. |
1t is a statement of the earnings and ope- |
ratings expenses OF the road for the months |
of June and July, $780, 1881 and 1882: