Lancaster daily intelligencer. [volume] (Lancaster, Pa.) 1864-1928, 1888-03-15
About DIyIdIpg Profits.

President Roberts has been moved 10
argue to his stockholders Of the pennsyl-
vania railroad that they are being treated
much more literally in the way of O
division among them Of the profits than
the owners of the other great railroads OF
the country are which may be true and
yet not be proper treatment. Mr.. Roberts
does better when he explains that the
surplus OF a railroad Is not cash but
simply the excess Of its valuation over its
indebtedness. lie tells us that one
Northwestern railroad has wiped out its
surplus altogether by charging 1t up
against its valuation which Is mighty
sensible way Of disposing of a surplus
that is incapable Of apprehension and
division. 1t has already been expended
: BY the road and has gone into its cost;
the stockholders will never see 1t, unless
In the shape of stock and IL they should
get that Mr.. Roberts says they would be
simply paying out of one pocket, Ato
another; which may all be very true in
theory. but ip practice the stockholders
would be likely to benefit by tangible
Apprehension Of their surplus in the
shape Of stock, which they could sell
since 1t is the habit of invest.
ors to give pretty much the same
price for stock after it is doubled
q before. Watering stock has been q
very profitable business since the day that
Commodore Vanderbilt did 1t in whole
sale way 30 successfully.
President Roberts evidently thinks that
his company has enough capital to
carry and pay dividends on; and
he is no doubt right. His stock.
holders ought to be satisfied with the
dividends they get and be content with a
policy that will insure them in the future.
Mr.. Roberts has good ground for saying
that railroads in this country cannot be
managed as they may be in England.
They need more play. The country is
bigger and the varying exigencies are
greater. None of our roads consider
themselves completed and must be con
stantly adding to their structure, or think
20. The great majority have been capi
talized with q view to their future value
and they have to grow up to that value
before they can think Of further capital
ixation.
There Is no railroad among us thai
thinks its stockholders entitled to all its
profits although there are many wht
will, on occasions, divide more than they
earn. The English idea, that the stock
holder is the owner Of the railroad, ha'
never taken root here, where the owner
ship practically resides in the managers
who are wont to manipulate the company
for an Individual profit in the stock
market. The Pennsylvania is not a roat
Of this kind, and pays more than usua
respect to the rights OF its stockholders
which shows how inconsiderable these
rights are. When Mr.. Roberts admit
that he uses surplus profits for the bet
terment of the road, he shows the des
potic control of our railroad managers
over their revenues, which belong to them
TO do with as they please, the stockholder
taking back seat, accepting thankfully
what they may get. When our country
is finished and done growing SO fast, we
5 will be able to DO things more nearly ''ac.
cording to Gunter" and the insular ideas
of English stockholders.