The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1886-01-20
The Future OF the South Pennsylvania Road
Still q Problem.


The Future Of the South Pennsylvania Road
Still q Problem.
The decision of Judge Simonton. in the case
Of the State of Pennsylvania against the Penn
sylvania Railroad Company, on Friday last. is
attracting good deal of attention. The ques-
ton at issue was the right of the Pennsylvania
Railroad Company. through its creature, the
Pennsylvania Company, to buy, and the right of
the South Pennsylvania Railroad Company to
sell, controlling interest in the latter corpora
TONS unfinished line between Pittsburg and
Harrisburg. The Constitution of Pennsylvania
forbids the absorption of a railroad by parallel
or competing line, and it was argued that the
vania Company violated this provision. The
railway organs of the East take the view that the
smotheriDg OF the South Pennsylvania is accom-
pllshed anyhow, and that therefore the
@sch against i Sill, will not make sss
PRINCIPAL stockholders of the South Pennsylva-
mia say that the road will be pushed to compile
ton at once. and that the Reading system viii
certainly find in the new road its long-sought
western outlet 1t will be remem bered that the
absorption of the South Pennsylvania by the
Pennsylvania Railroad Company was only per
mltted by the Vanderbilt party, who controlled
It, IN order TO obtain the aid of the Pennsylvania
magnates in securing control of the West Shore,
Central and so advancing rates on the trunk
lines and ending long, deadly war. Now the
New York Central-West Shore half of the ''deaP
is an accomplished fact, and the Vanderbilts are
secure. On the other hand, the law has pre-
vented the fulfllment of the Pennsylvania South
Pennsylvania part of the bargain, and it would
not be surprising il the Vanderbilt party should
obey the spirit of Judge Simonton's decision and
finish the South Pennsylvania road as an indie
pendent line.
Roads in Receivers Hands Capitalized at
$4,000 Per Mile.
The latest statements show that the present
receivership record embraces ffty-one roads,
having total of 9,8S2 miles of line and CAPT
talization of $591, 100000, against forty-fve
roads, with 1892 miles and 1862 924. 200 in 1884.
1t does not follow that the amounts specified as
total capital has been or is to be wholly wiped
out. The roads remain and their value as internal
improvements is in way impaired by their
financial disasters. Their intrinsic value is not
lessened by the fact that their capitalization was
very far beyond their earning power. The
Stakeholder says: when it is observed that the
capitalization of the roads now worked by re-
ceivers averages nearly $50, 600 per mile, the
mystery of so many roads in country abound
ing in traffic being in bankruptcy at the time is
quite well explained. 1t is quite probable that
the real cost Of these roads and actual
value estimated by their earning capacity
was considerably less than one-half of the total
stocks aud debts and as capitalization is quite
evenly divided between shares and bonds. and
stocks are issued, as rule, without money con-
sideration. it is quite apparent that no real loss
is incurred at least by original holders of these
excessive issues. Three roads include total length
of 2,086 miles, and combined capital of $685.,
100000, over 45 per cent of the aggregate
amount of the capitalization of the roads recent
~ IN the hands OF receivers. These roads. con-
ceived in recklessness and capitalized with prod
igaiity, removed from the receivership record
of last year, and the statement of mileage and
and capital in financial limbo is much less start
amount of bankruptcy in 1885 below the figures
Of tine preceding year.