The Memphis appeal. [volume] (Memphis, Tenn.) 1886-1890, 1888-02-18
THE INvEsrioArioS.
Ex.Presideut Smith Says the Reading
Company "Wou't De-

PHiLADKLPIIfA, Pa, Feb. l7.--Ex.Prcsi-
dent Charles +. Smith, Of the Reading
Railroad company, was the first witness
before the Congressional investigating
committee this morning which is inquir-
ing into the strike Of the Reading railroad
system and coal regions
Mr. Smith said Int he had been prcsl-
dent Of the Reading railroad from 1861 TO
1869 and director until 1876. IIo re-
signed his dircctorship because he discoy-
cred in 1876, after investigation, that the
company was publishing false reports and
cooking up lis accounts IN the interest Of
stock gambling. In the reports the truth
was suppressed; the floating debt not re-
ported, and while the road was not earn
ing any money Il was paying dividends on
It's stock, which was accomplished by bor-
rowing money. Some OF the directors
were gambling in tie stock, and other in
fluences In the management was compelled
TO pay these unearned dividends through
vanity. The bjcct oithe gambling directors
was plunder. The company. he had found.
had borrowed $4,000, 600 TO pay the diyi.
dcnds which had not been earned. Mr.
Smith Said that the railroad company was
managing the coal and iron company. Al
the same time he proceeded 10 explain
how the railroad company had obtained
possession Of the mining company lie
said that the latter was virtually the crea-
ture Of the former under the presidency Of
Mr.. Gowan. Tho original charter Of the
mining company was obtained under the
title OF the Laurel Run improvement and
Mining company. The bin had been put
before the Legislature In that name No u
wouldn't bc known as the Reading bill,
but as soon a. the bill passed iis name was
changed 20 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
Tillman, (which gives the Reading Rail.
road company the right 10 mine coal3'
Witness--"No, sir, but they do II
through the coal and iron company.
"Well, Is there any law 20 enforce the
State constitution, which forbids thisg'
"No, air"
The Cha irman--Thai, suppose, II be-
cause the railroads own your legislature.
docs the present stock and bonds OF
the Reading road represent money actually
paid In on work donef'
The witness replied that the company
had borrowed Sl5,0O0,0O0 10 pay diyi
dends which were not earned In fact gave
the money away. This loan was secured
by some Of the bonds, and those sccuritie,
did not represent anything except stock
gambling operation.
Then" said Chairman Tillman, 81,
not the company In arranging1ts business
40 as 10 meet It's Interest obligations and
lis expenses charging the public 10 pay the
interest on money which the company
never received and which was used 20 ios
Ter vanity and gambling and Il Il not true
that some Of this money Is wrung from th,
minenT
The witness said that ho supposed that
was true.
Entering into details Of the company,
property, thc witncss said that In 1859 IN,
company was doing a profitable business
and was perfectly solvent, and paid II
per cent. oi earned dividends, and the In
icrcst on lis debt which was less thar
81, ,0OO, 900.
'lIow, then, has Il happened that ihil
present enormous debt oil sle0, 000, 900 ha