Savannah morning news. [volume] (Savannah) 1868-1887, 1882-03-01
GENERAL ALEXANDER
Defends the Ocean Steamship Conn
pany's Certificates - Aud States
That What He Proposed 20 DO
Has Already Been Accomplished

In Sundays issue of the Macon Telegraph
and Messenger appears a letter from Gen. K.
2. Alexander on the railroad situation, from
which we publish, by request, the following
extracts:
Now, what I proposed to do in the mat
ter of the Central Railroad stock has, to all
intents and purposes, already been accom-
plishsd, and this is all that It is:
The steamship board passed a resolution
that, whereas, its large yearly net earnings
have heretofore been entirely applied to ex-
tensions and additions to its property,
which has now become so valuable and
profitable that q porlon OF the net earn
ings may be reasonably In future turned
over to the Central Railroads; therefore, It
was resolved that this policy should be de-
clared and announced in such form that the
Central Railroad could have assurance of It
for the future.
This assurance was given by g single "cer-
tifcste of interest, which was duly drawn
up by the steamship company, signed,
sealed and turned over to the Central Rail-
road Company:
Now that instrument is nothing but a
permanent regulation that the net earnings Of
the Steamship Company shall be carefully
ascertained and published yearly, and that
the first $3.50 900 thereof shall be strictly
applied to sinking and reserve funds and adj
ditions to property. after which the excess
to the amount of S245 900 shall go into the
treasury OF the railroad company for such
use as 1t shall see fit to make OF It. II there
is a still further excess over the 1896. 900, as
l believe there will usually be, it will be at
the discretion of the board to increase the
reserve above $3.50, 600 or dispose of the ex-
cess as they choose.
This regulation might, in fact, have been
made by a simple resolution of the board.
But the advantage ia putting 1t In this more
permanent form is, that the Central Railroad
stockholders may have assurance that the
policy will not be changed; and the credit
of the Central Railroad may be strengthened
by having something more permanent to
show than the line of policy depending upon
the will Of the board of directors from year
to year. Or 1t may be transferred and used
in part or In whole as collateral, should the
railroad company desire to do so In times OF
stringency. There Is no possible view which
can be taken OF this, or no imaginable con-
currence OF events which can make this
permanent regulation load upon the Cen
tral Railroad or affect ifs stability and credit,
and its ability TO pay dividends, otherwise
than favorably. All that has been done Is
only to give an assurance to the Central
Railroad stockholders that, when the steam
ship company is prosperous they shall In
future receive part of the net income into
the general treasury of the company.
All that remains to be done, for the pres
ent at least, is simply for the Central Rail-
road board of directors to announce to their
stockholders that the money received from
the steamship company shall be first used as
a guarantee fund to assure to Central Rail-
road stockholders niue pei cent dividends,
should the railroad itself fail to make them,
which, however, l don't believe they will
ever fail to do. Ii not needed for that pur-
pose, the amount received should be de-
clsred as an extra dividend 20 the Central
Railroad stockholders, which would be suffl-
cient to give them about two per cent. more;
and the Southwestern about one and six
tenths, IL they are eutitled to share in it.
Then Central Railroad stock may practf-
cally be considered as a guaranteed per
cent. stock, with prospect of at least IL
per cent. in good years. This is estimating
that the railroad itself is able to earn only 9
per cent. II any one will study its reports
for the last few years he will see that it has
never earned less. Last year It earned
enough to have paid 119l per cent, after
spending $457 600 on permanent Improve
ments, as stated by the SnDeriDtendent, and
without counting the 100000 earned by the
steamships. II these large earnings are not
to be divided to the stockholders, the man
agement of the road will necessarily feel no
necessity to be economical, and they are apt
to be spent IN manner which will be of
Your own paper has recently indicate as
an illustration of this tendency plan to
have a double track for about half of the
distance between Savannah and Atlanta.
Now, the business done over this line OF
road is only about 81, 900 per mile per an
mum; and the road has but few and light
curves, and only thirty feet grades. The
main line of the LOUISVILLE and Nashville
does business Of $4,000 per annum, over
eighty feet grades and many curves, and
with lower average rates than the Central
Railroad enjoys.
How absurd, then, would It be to spend
an enormous sum of money in double
tracking road that is not worked to one
third Of its capacity. AS you are not q
stockhOlder yourself it may amuse you to
see it done. But l think that those who are
stockholders would much prefer to have
the money in dividends; and we wish TO see
such policy inaugurated that the diree-
tors will feel a pressure upon them to
economic, and cut off all unnecessary ex-
penditures, and exert themselves to let the
stockholders have the full benefit Of what
the property is able to earn. do not think
they should feel that their whole duty is
discharged when eight per cent is paid to
the Central and seven to the Southwestern.
Very respectfully,