Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1884-03-28

rRroAY FvfNrNo. MARCH 40, 1884.
Preaching and Practice.

Mr.. william II. Vanderbilt falls an
easy prey to the interviewer, nowadays,
being seemingly In no way reluctant to
ventilate his opinions. He has just
given expression to an opinion which,
though sound, is remarkable as coming
from him. He says that no president Of
q railroad company should be president
OF o construction company organized to
build IL. He thinks this should be for
hidden by law, and that any such double
president should be made to pay back to
the railroad company the profits he has
made on the construction company.
1t would seem from this that Mr..
Vanderbilt would hold that not only the
president, but all the officers and mana
gers Of a railroad company should be
forbidden to be president, officers and
managers of the construction company
organized to build it, The reason of the
objection to having the same parties
managing both the railroad aud the
construction company being that the
party paying should not be the same as
the party paid, the objection to having a
common president of the two corpora
tions applies with equal force to com
mon managers. When the railroad com
pany contracts with the construction
company, and the construction company
IL made up of those who manage the rail
road company. it is clear that the rail
road company is very likely indeed u
pay liberal prices for construction. Th
stockholders OF the railroad company, Il
there are any who are not In the con
struction company, may reasonably oh
ject to having their officers contrac
with themselves to build their road. AnC
even though the railroad stockholder
and the construction company stock
holders are the same, as they usually ar,
nowadays, the state and the public
have a strong interest, which the law
should defend, in prohibiting the build
ing of railroads by construction compa
nies that are in fact the railroad com
panies The object of this interjectior
of the construction company being sim
ply TO swell the stock and bond
account of the company, and TO make il
appear to cost great deal whilei is being
built as cheaply as possible, it is obnox
ious to public policy and needs to bt
forbidden by law, as Mr.. Vanderbilt
says; or rather as we would uuderStan
him to say, but for the fact that he il
himself a chief offender in this stat
against the public justice he proclaims
He is the promoter aud mainstay {
the Southern Pennsylvania railroad, th
contracts for building which are mad
by the American Construction compan,
which builds 1t on the bonds of the roat
the stock being bonus, or on the stoCl
with the bonds as a bonus, whichev,
way you choose to have it; an equ
amount of bonds and stock being issue,
the one sort being paid for and the 9th,
thrown in free.
Now Mr.. Vanderbilt is engaged in Il
undertaking to capitalize this road
surely twice its cost, and probably at
much greater proportion. This thing ";
condemned by Pennsylvania law al
this particular road loudly demanded
new law enlarging its possible capita
under the assertion that it could not
built under the limit in the old Law
which was 100000 per mile in stock an
$50, 900 in bonds. The Legislature passe
law for Mr.. Vanderbllt's accOmmodi
tion permittinga capitalization of ha
million dollars, we believe, Goyern(
Pattisou said 1t was too much and REFUSE
his signature until the amount was I
duced to $780, 900 in bonds and stOcl
The loud protestations of the projecto
of this road, made TO the governor a.
the Legislature, TO secure this increa
of nominal capital, seem 10 have been
near TO deliberate lying as the protestC
well could get since they at once fl
themselves so flush of securities that tn
conclude to give away their bonds
their stockholders. Mr.. Vanderb
should try to practise little closer wi
he breaches
Blaine's OHensIyeness