New-York tribune., 1886-01-01
CONDITION OF THE READING
REPORT MADE TO THE STOCKHOLDERS.


oALEb AND CHANGES kECOMMENpED.
The committee, appointed at the last general meeting
of the stockholders OF the Philadelphia aud Reading
Railroad Company of which Charles H. I. Coils is
chairman has prepared long report the condition
OF the property The committee was not authorized TO
spend mOuey in its investigation and consequently
confined its nqueres to the books and accounts and
inspection of part of the railroad. After reviewing
the history of the company from the time of its first
charter in 1888 the report says of the value OF the
coal lands
Keeping within the pury lew of your resolution which,
instructs us to "appraise" the property, we find
ourselves compelled TO disregard the fact that this
property may steadily enhance in value in a ratio
perhaps equal TO that OF stephen Girards valued
at few millions but now producing nearly million
OF revenue, and limit ourselves TO opinion OF its
worth as an asset To do this is AS difficult as to fix
value the exclusive right 10 the fisheries OIL the
coast OF Newfoundland. 1t would depend entirely upon
the amount required by the market and the cost OF
producing the supply. The value could not be based
upon an estimate of the number of fish uncaugh at 80
much per fish,
his coal territory is one of tho rcl est estates the
planet and will be so long as anthracite coal continues
an essential commodity to domestic manufacturing
and other uses and doubtless can be made to earn
profit TOR both the Railroad and the Coal and Iron
Company, whenever those companies relic ed of the
exactons of The debt hch III ir acquisition created,
are enabled to properly utilize the vlgor which they
both possess But is present value to the shareholders
of the Philadelphia and Reading Railroad Company Is
the answcr To II question hat is 1t to-day worth
~ a fulcrum upon which TO place lever which shall
eleratc Us into soheuOyD
II say you sell them To syndicate of capital
lists for $f5OOOO 900 must also say that this would
ieopariUe your iho, aud sale IN small parcels
would be oIen tamc objection for no purchaser
wo1ld consent $50 yor shonld moGopoze his freight
and fix the rate. After very mature deIberaton, we
are of opinion That the most conservative and safest
valuation We place uppn the coal lands IS TO say
that they more than ample security for the debts
Tor which they are pledged.
protest IL made against any further purchase of
coal lands and especially because in tho embarrassed
condition of the conn large acquisitions made
in 1858 and 1884 The true policy of coal production
is stated by the committees:
No matter how widely opinions may differ as to the
policy OF railroad company becoming, practically, the
of 100, 900 OF coal lands some of which
may not be mined for century, there can be but one
opinion to the necessity for utilizing 1t to
produce the maximum results 70 mine ii to its full
capacity would be to OyersOck the market and reduce
the price; TO mIne it only permitted so TO do by
your rivals In the trade il 20 surrender any advantage
YOU may have acquired by reason of your ownership.
You have tried combination for resrictOn OF output
combination for establishing uniform price and aot-
ment Of tonnage prsportiOned TO your respective
control; but OF these experiments have proved
equal to the vcisstudes to which this industry, like all
others. Is liable
There remains yet one untred plan. 1t is simple,
business-like, rChol cd Of all vntangng alliances. fd
stmulatye: viz. to mine .suihcint coal only TO meet
the demand. and to produce this coal from those
cUllienes only where il he done the cheapest, and
stop operations at all Others his might reduce the
price. but it would lessen the cost and would orce
The committee recommends the sale of unavailable
real estate consisting Of FARMS wharyes landings.
beds quarrie, shpy ards, etc. and the abandonment
of unrcmuneratye leases. The lease Of the Central
Railroad OF New Jersey should be maintained, If possi
be but this is not likely TO be accomplished in the
opinion Of he committee. .uness the shareholders should
be content accept payment of fixed charges If an
arrangement of that kind could be perfected, the
committee deems il of vital Importance TO retain
control OF this lease.
The report concludes as follows:
Your committee sincerely hopes that when your
property az ain restored TO soyency dividend viii
ever be declared until 1t il demonstrated to the share
holders beyond all controversy tha t has been earned
And they are further Of opinion, that 1t is of no
advantage to you or t. your property 10 Officially
q condition of prosperity whicn the facts do
not justify. and which result invariably in creating
whose expenditures may be based upon hopes created
by such statements bat which tail IN realization. For
instance the report read January H. 1854. OF the
operations of the year OF 1888 begins with the follow
ing encouraging language:
The Board OF Managers submit the following con-
dcnsed statement Of the result OF the operations OF the
year ending November 30. 1883, showing surplus
and above all fixed charges of So l57. .233 O6,
which equal per cent the preferred stock
per cent upon the common stock and balance OF
57,634 54 applicable to interest upon the deferred
income bonds y; whereas in truth, this very money
and over million in addition due and payable for
the purchase OF stock Of the New-Jersey Central
at page % of the report whereas, also at this
very time the unsod coal the wharves at Richmond
v ~ pledged TO the Pennsylvania Warehouse Company
for $3.50, 900, advanced to your company in the
previous month upon which "a balance OF $3.50 900
remains due and unpaid to-day. and for whieh your
coal is still pawned aud. whereas. further in less than
six months from the creation of these hopes aud the
declaration. at page l9, that the managers no
why dividend OF u per cent on the preferred
stock should not be paid the pro eIty decrted to
be nsoVcn and placed again the hands OF receivers
The Philadelphia and Reading Railroad Company
has demonstrated that it can command traffic in a
bad year SS4 earning thirty-One millions of dollars
of which more than halt Is derived from the
carriage of passengers and general merchandise and
fourteen ana half millions from coal tonnage. Ii
owns and controls at least 40 per cent of all the
anthracite coal In the State of Pennsy lvania. and
controls the best terminal facilities the Atlantic
Coast Its roadway, motive power and rolling stock
are in excellent condition. and all its expenditures at
present timo reduced to the minimum consistent
with efficient service. Such in few words, the
facts which commend themselves to the owners aud |
creditors of the property and which should attract the
capitalists aud business men of the country.
IL H. however heavily in debt, yet not so over |
that ii cannot be made to something
for each class of creditor If readjustmeDt OF interest
charges can he contaminated in time 10 enable the |
company to avail itself OF the improved condition of
business