Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1888-02-18
ILL IS VANITY.
A Former President Of the Reading
Railroad Tells How That Company
Pays its Dividends.
TIE Congressional Investigation Com
mittee Inquiring Into the Strike.
In the Hands of Receiver.
POvasriy Denies the Rgmors That the
Strike Wan ba Declared on by this TX
esutiVe Board of the knights.
THE CONGRESSIONAL INVESTIGATION.

THE CONGRESSIONAL INVESTIGATION.
PHILADELPHIA, Pa, Feb. LEX
Pres dent CHARLES E. Smith OF the Resd-
ing Railroad Company was the first wit
NESS Examined this moSniug by the con-
gressiSnal investigating committee, which
is inquir:ng into the strike on the Read
ing Railroad system and In the coal
regions. Sir. Smith said that he had
oeen president of the r aiding Railroad
from 1861 to 1869, snd director until
1876. He resigned his dictatorship be-
cause he discovered in 1876 after inves-
legation that the company Gas publishing
false reports and cooking up its &C.
counts ia the interest," OF STOCK
gambling. IL the reports the truth
wss suppressed. The floating Gebt wss
Oot reported and while the road was not
earning any money it was paying diVi
dends On its stock which was accomplish
ed by borrowing money. Some OF tie d.
rectors were gambling IN stock. Another
irfiaence which impelIed the manage
ment to pay these unearned demands WAS
vanity. The obi CT Of the gambling di-
rectGrs gas plumber. The company he had
found had borrowed $4,000, 900 to pay
dividends which had not been earned
Smith said that the railr sd company WAS
managing the coal and iron company
st same time and he proceeded to
explain how the railroad company bad
obtained possession OF the mining COM
pauy. He sid thst the latter wss viz
JuallY creature of the former under the
presidency Of Mr.. GlWen. The original
Char er OF the mining company was OBJ
tanned under the title Of the Laurel Ran
IDproV ment ard Mining Company. The
bill had been put before the Legislature
in that name so that It
WOULD NOT az KNOWN
rs the Reading bill, but as soon IS the
oil passed its name was changed to the
Reading Coal and Iron Company. There
was no stock issued until the name was
changed and the Reading had control.
"Is there any law" asked Chairman
Tillmsp, (which gives the Reading kali.
road Company the right to nine coal?"
Witness: "No, sir. But they do it
through the Coal and Iron Co Apsny?"
"Well, is there any law to enforce the
stare constitution which forbids this?n
"No, sir"
Chairman: "That, suppose, Is because
the present stock and bonds of the Read
ing road represent money actuslly paid in
on work doue7"
hsdH6orrowed SIS, 600 900 to pay divj-
deuds which were not l0an,d In fact
gave money away. Tnis loan YVES Sc
cured by some OF the bonds, and these Sc
curities did not represent anything except
stock gambling operations.
"Then," said Chairman Tillmsn, ISIS
not the company in arranging It's business
so as to meet Its interest obligations and
its expenses, charging the public to pay
interest on money %hich the company
never received and which VAS used to
foster vanity and gambliDgi And is il
not true that s1ms ct the money is Wrung
from the minere?"
Witness said that he supp sed thai was
true.
Catering into details of the company's
property the witness ssiG that in 1869 the
company was doing a profitable business
and WAS perfectly solvent, Sod paid 10
per cent. of earned dividends and Inter
est on its debt, which WAS less than SO,
000. 900. How then has it happened that
this present enormous debt OF $3.50 ,o00,-
600 has since been accumulated aud the
road sent twice into bankruptcy?
"By dong losing business and Dor
rowing money right and left. The nature
of the compsny's business has been
changed. Accounts have been cooked
and debts concealed, and the character OF
tran sections have been altogether revoIu- |
tiOnized "
Chairman Tillman-"A sort OF wrecking
business2"
Mr. Smtth-"Well, reckless business,
certainly"
Witness was then asked 8 number of |
questions leadinglpp to al ex ression Of |
nl- opinion as to he ability Of the Resc-
ing Company to pay its enormous debt |
and the value Ct its securities He re
piled fnslly: "IyHCuld BOT oWn dollars |
worth of its bonds, excspt very early
ones. The others are worthless. Tn
company cannot, in my opinion, pay its
debts"
When asked iursner as to whether he
thought the road would go back into the |
hands OF receiver. ne said: "Yes, and |
Jhst Will happen 81 least within 3 year,
from present indications"
WILL NOT BE DECLARED OFF
SCRANTON, Pa Eco. II Mr. PoWderly |
says the rSp 1T tn2t ne and Lewis, nS- |
tionsl master workman Ct the nsttona
district had decided TO declsre the Resd-
Ing strike Of is incorrect. The STRIFE,
ne sass, wss discussed by them, but NJ.
Lewis principal purpose ia coming here
vas TO have Secretary Hayes ate: to
some routine matters. Lewis, however,
before leaving Scranton this morning for
tod an Acquaintance thai
ne IVES going u Schuy lkul county right
IF, and would order the miners bAcK to
work.
To BE DECLARED OFF
PoTTsVILLE, Pa Feb. II -Chsirmzn |
Lee sends word mere from Pailadelphia |
thst the whole Reading strike is likely to |
be declared of sEd ended within twenty
four hours. The joiat committee In ses
sion here declare there j. big chsnge |
near a. hand. Secretary Duffy on com
ing out OF the committee rooms said: "i
cannot give you detzils, but this strike is |
now TO be settled in short order"
AUSTIN CoRBIN's INFORMATION.
NRw OK, Fec. II Mr.. Maxwell, Of |
A~si-s --.-4-'. L. ~ .4Ls cay, saia |