The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1888-02-18
IN THE QUAKER CITY.
Examination Of Witnesses by
the Congressional Strike
INVESTIGATION COMMITTEE.
in the Read nE Railway Investiga-
.tion-Interesting Ievelopments-
miscellaneous News Notes.
The Reading Investigation

PHILADELPHIA, February lex
President Smith of the Reading Rail
road Company, was the first witness
before the Congressional strike investi
CATION committee. Smith is said to have
been president of the Reading Railroad
from 1861 to 1889, and a director until
1876 He resigned the dictatorship be-
cause he discovered that the company
was publishing false reports and cook
ing up its accounts in the interest of
stock gambling. In the reports the
truth was suppressed, the floating debt
was not reported and while the road
was not earning any money it was pay
ing dividends on its stock. Some OF the
directors were gambling in stock, and
other influences in the management
were compelled to pay these unearned
dividends through vanity. The COM
pany had borrowed SIS 600, 900 to pay
dividends 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 possess
sion of the mining company.
In reply to the query If the company
IN arranging its business to meet It's OBJ
legations was not forcing the public and
employees to pay interest on money
which the company never had re-
csived, witness said be supposed it was
true; that in $50 the company was do
ing profitable business, was perfectly
solvent, paid ten per cent, earned dIvi-
dends and the interest on its Gebt, which
was less than $1,000, 900.
How, then, has it happened that
this present enormous debt OF $160, 000,-
900 has since been accumulated and the
road sent twice into bankruptc ?"
"By doing q losing business and Dor
rowing money right and left"
Witness Was then asked hi' opinion
as to the ability of the Reading COM
pany to pay its enormous debt, and
the value of its sureties. He replied:
II would not own a dollar s worth of
its bonds except very early ones. The
cannot, in nay opinion, pay its debts,
and will go back into the hands OF
receiver at least within year."
After Sweigert finished, Austin Cor
bin was recalled, and during the ex
animation grew angry and refused to
answer many questions. He denied the
right of the committee to 90 into the
roads private business; he declined to
say how the company could get along
without the coal business. After long
series of interrogations, Fillman drew
from the witness the statement that the
interest charges and other fixed charges
of the company amounted to $4,000
900 year, and Corbin stated in reply
to further questioning that without the
coal trade the company could earn its
fixed charges, which were over 81 ,000,-
900.
But do you expect" was asked, "to
make more than $4,000 600 with your
miners out?"
Mr. Corbin: mo; but our miners
will be back. and ii your committee
will stay here ten days, it will tird |
them all at work again"
Mr.. Corbin denied absolutely that |
there was any ground for The assump- |
ton that it was to the interest of the |
company to have q strike at this time;
or that 1t might be advantageous to the
company TO have strike, in view Of
the company's financial condition, in
order to offer that as an excuse for it.
The next witness was Thomas M
Richards, general sales agent OF the
Reading Coal d Irou Company His
examination developed that the price of
coal at PhiledelpbIg mad risen 81 10
$l.75 per ton since the strike began.
The next witness was George w.
Jones. former vice -presiden: of the
Reading road. Jones entered into the
history of the requirement of the coal |
lands by the coal and iron com aany
under control of the railroad company.
He said that this was Mr.. GoWan's
scheme. Robert McCalmont bad
loaned Mr.. Gowan 5000 shares CT the
Reading Railroad Company's stock in
1869, with which TO purchase coal
lands. This was the beginning of
policy which led to the requirement. of
the Schuylkiil coal lands. which ulti- !
mately led the railroad company into :
the hands OF receiver. ana pied upon !
it debt of over 100000 ,000 He cor
roborated the statement of Mr.. Smith.
made in the morning, that in 1869 the
Railroad Company had only l.,
small debt, was paying interest on it,
and the earnings paying dividends of {
10 per cent. 1t was dealing in coal ]
lands, and the purchas of coal lands 4
which could not be utilized for r
many years, and attempting to '
force small part of them C
to pay interest on the whole f
Investment which wrecked the com
pany. Witness related at some length
the history of the several coal combina-
lions IN the past which had been made
to restrict production, and thus make {
higher prices. He said that the last :,
one did this by a mutual agreement to !.
shut down the mines certain number :
Of days in the year. Until he had heard :
The testimony of witnesses, he had been !;
pertain that this sort of combination
existed now, and that the Reading was
party to it. and he believed it, not
the testimony of witnesses
,afnre the committee e.
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