Savannah morning news. [volume] (Savannah) 1868-1887, 1883-07-04
The aSeneY Crowd"

The most interesting topic of discussion
in railroad circles of late has been the
alleged intention of Jay Gould to secure
control of the East Tennessee. Virginia
and Georgia line, or what is known as the
.sSeneY" system. A NEWS cor
respondent recently gave full
exposition of Gould's plans, which he
gathered from one who appeared to know
whereof he spoke. 1t was thought that
at the meeting of the stock and bondhold-
ers of the East Tennessee, Virginia and
Georgia. held at Knoxville on the 23d ut,
something positive would be learned as TO
ahe plans of its management. But from
the account of the proceedings. as made
public. one is left to draw his own con-
illusions.
The fact. though, that the meet
ing authorized the issue of an adj
ditional S10,OOO.OOO of 8 per cent.
bonds. $3,OO0,OOO Of preferred stock,
and S13. 900, 600 Of common stock, the bonds
to be issued only on newly acquired prop
erty. is interesting. The financial editor
of the New York Times remarks upon this
action: ''The trife of sixteen millions OF
stock will be loaded on to itin addition. As
the East Tennessee Company has only So3,
OOO. 900 of securities now outstanding Tex
elusive of car trusts J, the new issue will
bring its obligations up to the respectable
figure OF sos. OOO, 600. This is in the true
Seney style. and Wall street is flooded
with the veriest lot of trash from the
Seney printing press that ever went under
the name of railroad securities. Natu-
rally enough the 'Seney stocks are in
bad OdOr i'm the street, and they deserve
to be-"
The Times throws some light upon the
methods of the philanthrOpic financier
and his clever associates, who have
earned in Wall street the sObriquet OF
1.-THE Seney crowd" According to our
contemporary, the ''crOwd exists as a col
lective substantive for the purpose OF
issuing securities" The ''Seney method
of railroad financiering is said to be
unique. The conditions for its applica-
ton are simple-plenty of securities and
cheap. For instance, few people would
want one million at 30, but
fifty millions at 10 would
20 like ''hOt cakes" Given a desirable
railroad property, the syndicate" buy ii
up at the lowest cost possible for cash,
make repairs. procure new equipment on
car trusts and make a traffic agreement
with contemplated ally. Then a taking
title must be assumed by the new CON-
pany. and they proceed to divide profits.
Now comes the ''fine" work, which the
Times sketches as follows:
''The printing press would 90 to work with
energy. First mortgage bonds, second mort
gage bonds terminal bonds. consolidated
bonds. income bonds. preferred stock certti-
Gates, and common stock certificates would be
rolled OF by the ream. First mortgage bonds
would be issued in amount nearly enough Il
cover the cost of the property; OF second
mortgage bonds there would he issued 50
much: consolidated bonds to cover mortgages
already resting on the road, income bonds
and common and preferred stock al I'D. The
terminal bonds would cover the terminal
property. the argument of the Seney tinan-
ciers being that terminals are really real
estate. not railroads, and real estate always
has its value. and should be covered by real
estate bond. Equipment, also. Is not road, 81
that must be got on car trusts. First mort
gage per cent. bonds may be sold at 80. and
the terminal bonds also; the seconds may
bring -: income bonds 40; the preferred stock
may be sold for -. and anything over 10 fOl
the common Is unexpected gain.
Having worked of these alleged securities
on the public. the 'Seney crowd would leave
them to be kicked about Wall street for any
price they could fetch. \ railroad company
financed after this method Is the pOssessOi
of an indifferent line of road, covered will
first and second mortgage and terminal bonds
TO a point which brings its fixed charges
nearly to the amount it can pay I'm prosper
GUS years; the surplus goes to pay interest on
the car trusts. If bad harvests come and
other disasters. under which the overloaded
concern begins to stagger, more securities Is
the remedy. The Seney crowd may always
be depended on for an unlimited supply OF
them
This enterprising ''crOwd" 1t was that
shut up the eyes of our solOns at Atlanta
with liberal display of philanthropy
and added the people of Georgia to theiI
/ tribute-payers, who are taxed to enable
them to make show of sOlvency. Verify
these be wOndrous days that are upon us
The ''crowd," they say, ''scooped'' Gould
| for several milliOas on "Nickel Plate
/ Can it he that he will be caught again: