, 1888-02-18
CorbIn Up a

EISsSIOudl SlElhS luNGSllpaJlO0 committee.
Smith said he had been president of the
Heading railroad from 1861 to 1869, and
director until 1876. He resigned the
dictatorship because he discovered that
the company was publishing false reports
and cooking up its accounts in the inter.
est of stock gambling. In their reports
the truth was suppressed, the floating
debt not reported, and while the road was
not earning any money it was paying a
dividend son its stock. Some of the
directors were gambling in stocks and
other influences, and the management
were compelled to pay these unearned
dividends through vanity. The ompany
had borrowed $4,000, 900 to pay diyi-
dends which had not been earned. Smith
said the railroad company was managing
the coal and iron company at the same
time, and he explained how the railroad
company obtained possession of the min
ing company.
In reply to a query if the ompany in
arranging Its business to meet its obliga-
tons, was not forcing the public and its
employees to pay interest on money which
the company never had received, witness
said he supposed it was true that in 1869
the company was doing a profitable bust
ness, was perfectly solvent and paid 10
per cent earned dividends and entered on
its debt, which was less than 80. 900, 900.
How then has it happened that this
present enormous debt of 500, 900. 900
has since been accumulated and the road
sent twice into bankruptcy"
by doing a losing business and Dor
rowing money right and left"
Witness was then asked his opinion as
to the ability Of the Reading company to
pay its enormou debt and the value Of its
securities.
he replied, Il would not W a dol
lars worth Of its bonds except the very
early ones. The others are worthless.
The company cannot, in my opinion, pay
its debts and will 60 back into the hands
of receivers within a year"
After Sweigart finished, Austin Corbin
was called and during his examination he
grew angry and refused to answer many
questions. He denied the right sof the
committee to go into the roads private
business. He declined to say how the
company could get along without its coal
business. After a long series of interrog-
atories, Tillman drew from the witness a
statement that the interest charges and
other fixed charges Of the company
amounted to $4,000, 900 a year, and Cor
bin stated IN reply to further questioning
that without its coal trade the company
could not earn its fixed charges, which were
over 81, 600.
But do you expect" wa asked, ''to
make more than $4,000, 900 with your
miners out"
Mr.. Corbln-''No, but our miners will
be back and ii your committee will stay
here ten days it will find them at work
again. Corbin denied absolutely that
there was any ground for the assumption
that 1t was to the interest of the company
to have the strike at this time. He said
that 1t might be to the advantage of the
company to have a strike in view of the
company financial condition in order to
oter that as an excus for it.
The next witness was Thomas NJ.
Richards, general sales agent of the Read
ing Coal and Iron company. His exami.
nation developed that the price of coal at
Philadelphia had raised from 81 to SI.75
per ton since the strike began.
The next witness was Geo. W. Jones,
former vice president of the Reading
Railroad company. Jones entered into
the history of the requirements of the
coal lands by the coal and iron mpan
under the control of the railroad com
pany. He said that this was Mr.. Gowcn's
scheme. Robert McCalmont had loaned
Mr.. Gowen $4,000 shares of the Reading
Railroad company's stock IN 1869 with
which to purchase the coal lands. This
was the beginning of the policy which led
to the requirement of the Schuslkill coal
lands, which ultimately led the railroad
company into the hands of a receiver and
piled upon it a debt of 800, 900, 900. He
~corroborated the statement of Mr.. Smith,
made in the morning, that in 1869 the
Reading Railroad company had only a
small debt, was paying interest on it,
and earning and paying dividends of
10 per cent. 1t was dealing in
the coal lands and the purchase Of the
coal land which could not be utilized for
many years and attempting to force a
small part of them to pay interest on the
whole investment which wrecked the com
pany.
Witness stated at some length the his
tory Of several coal combinations in the
past which had been made to restrict pro
duction and thus make higher prices. He
said that the last one did this by mutual
agreement to shut down the mines a Ger
tam number of days in a year. Until he
had heard the testimony OF witness he had
been certain that this sort of combination
existed now and that the Reading was a
party to it and he believed 1t, notwith-
standing the testimony of the witnesses
before the committee.