New-York tribune., 1885-03-17
SHARP TALK FROM McHENRY
RITTER ATTACKS ON RAILWAY MANAGERS
CAUSES OF EUROPEAN DIsTRUsr IN AMERUANRAiI-
WAY SECURITIES.

IA
time for It was not ripe" but he expressed Willingness
q, give hjs views on the general railroad situation anu
the need of reform in many OF the methods OF American
management. 5000 -.
How do American railway securities stand aproao "s
reoar,ls their credit r. Mr.. MeHenry was asked.
{" How can they he otherwise than Stunned py every
ans,h,o man who has been deceived by investments
beretofore and lost confidence in the whole American
svstema Last year, when here, took occasion u "o
nounee the system of American railway management
ard espccially attacked the pools, as being merely
nbrse used as disguise OF fraud also created great
deal of i-w toward myself by stating that most OF the
traffic of the country conducted by ghost trauls
meaning that quantities OF produce were aspoeu
over some the leading lines without remuneration W
those lines-the tonnage not being reported III .ne
regular way and the earnings being divided among the
eonfederates The present position OF dscret
ont the whole country justies all said and all prophe
s,ed There is universal paralysis OF American railway
credit This the extraordinary because 'nioush
out the world railways considered the ssfest OF III
vestments The United States presents an IDEAL terr-
tory for the construction OF railways being larger than
all Europe and having population of 60,OOOOO0 OF the
most Industrious and ingenious people ever kho"h
speakng one language, without the barriers between
States not keeping up standing armies OF iders' ana
every doing his best to increase his own prosperity
I have always contsnded that a railway In America
after allowing IL reasonable time for 1t to ren into
profit should give safest investment and the most
profitable returns OF all kinds Of investments
.The wide discredit which exists Mr. McfIenry said
further "has arisen from the general corruption or
general ignorance of management l have learned
great deal of the ways and methods OF railway manage
ment and paid dearly my education, but my con-
dence I'm the results of wellmsnaged railway has not
been In the slightest degree shaken. The most pracuca
and intelligent and successful railway manager know
IN Mr. j. c. Clark president Of the Illinois Central and
to him I owe my first lesson in uncoverng the
mysteries of American management The rationale
Of n railway is simply this: Ii is con-
structed transport goods and passengers, ana the
only thing railway has to sell is this transportat0n
and the profits a railway based on the difference
between the what they receive for ansporta
ton full train be from New York to Chicago
Mt cost of not exceeding $780, including depreciation
litigation all expenses taxes etc. The present rates on
grain are equal about 81 ton and this Is set up as an
excuse by different managers for the suspension o de-
elension OF dividends on the stock An average train
can carry 400 tons or $1,000, and don't think any
business In the world pays alarger dividend on the In
yestmeut When low profitable than high
rates why not boldly follow them
am largely interested in Western railway and I'M
der the autocratio government popular in this
democracy the managers Indebtedness in
they please to do without the knowledge consent of
the proprietors and custom justies it, They show
siderable profits after debtng earnings with about 80
per cent expenses being about 20 cent more than
can be justified But this moderate percentage OF
profit left seized and appropriated for what called
betterments This sort Of thing has destroyed the con-
dence of investors The managers have no more right to
dspate earnings belonging the propretors than has
the manager OF this hotel to create mortgage the
house 1t so please him Ieave 1t to imagination what
Mrs. Paran Stevens would think II she found
out that such thing had been done by
the lessee of this hotel. Reorganization
another rather popular themo in the United States and
profitable those concerned in IT, but fear like the
Roman fever company ever catches It, 1t liable TO
"iti is not difficult" Mr. McIIenry added Ito restore
the credit of American railways to the position they de
have First, the past must be explained, mys
teres cleared up and the misappropraton OF capital
security for the present that an issues have been made
disposition the funds and statements given showing
where interest is to come from for the ISSUES 20
made Neither Of these things however is important
as the third requirement, namely absolute security
against the recurrence of disasters against the whole
systen OF sinking funds, trusts, collateral trusts.
Greetings OUT and other ingenious Inventions for con
ascating the property nrs!ea 70 us inanagers Inc
There should be a wheebarrOw bought without esti-
mates made and presented after due notice te the
pretors for their approval II me snddeness with
which issues announced and hoang debts dis
In short an annual report of American railway is
received with the greatest doubt TO It's sincerity and
truth. This be only by inde pendent audit
which will countersig the reports. the auditors be
esrcr IL fRs in &%eres now is to
serve OF the Erie the Atlantic and Great
am more or less interested. No one has invested
much money In any one railway IN Anerga Al % as nave
practically unsaabe shall endeayor while here while
Changes in their will lead to the re-
eoyery intrinsic value Of these great properties
viruenty pursued these May years Is net ended but
Is We'll known that the $50 600 negotiated for Erie
was applied 10 Otner matters What these were have
susp and think Is 70 the interest OF the Erie
that the facts should be made known"
DO you approve MI. Kings management T. was |
asked.
prefer TO say nothing now % except that have al
ways had high regard Tor Mt; King -, ,Ao o,.
said 1 have known Mr. FINK by reputation many |
the Louisville and Nashville Railroad but had
the pleasure OF meeting him. He must be gentleman
issues his ukases for the rising and falling
of companies in which he has personal in
teres and with which he has official connection and
therefore power enforce his orders. The readiness
with which he listens to the frauds praetsed him and
the simplicity of his attempts TO reform them reminds
very much of Dog1ery when he gave orders to the
sohctude. What would be said If Lord Tay should
enter into pool with Macy that they should not sell
any more than silk dresses on a certain day
and to eostumer who came 10 at O'clock IN the after
noon say politely; You must go TO Macy's for your
dress . What would be thought Of such shopping
eds an roas ReadSs Win shi @ SapS
invested in coal lands actually enters into contract TO
lug the Investment increase production TO the
utmost possible extent The eorsllary .to put shop
When an inq ry was made about the advisability OF
Meeny is rseS Sand Rray Of Is England
was built up by the energy and ntelgence Of man.
baltimore and Ohio, the Pennsylvania and the New
York Central together; IL competing line from
England Scotland against three old ldesabshcd lines
aud yet is common stock is selling at 125 When the
Atlantic and Great Western built by me,
every dollar of capital furnished by me, / took
the first train from New-York TO St. Louis that
accomplished the run. There then less than $50
miles OF railroad west OF ST. Louis. while there
over 10000 miles, and yet asked to believe that
earnings at the Atlantic less than they
then Minnesota, when the Atlantic aud Great West
srn was opened had pOpa@ssio%n @ % Of less than 100000
$4,000 900 bushels OF wheat alone each year, and is
settling up rapidly The population Of the States
OF the Ohio River has Increased from 100000 TO