St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1890-01-09
NO DIVY THIS YEAR.
The Reading Railroad Is Short OF
Cash.

PHILADELPHIA, Jan. S.-The Ledger
in its financial article tomorrow will
say: The Reading railroad was again
the uppermost topic in financial circles
yesterday. The street" discussed with
vi9or the question of the payment of
dividends OH the income bonds for the
past year, and, as varying phases were
assumed by the discussion, the Specu-
lation i'll the Reading list moved
up aid down. New York and London,
as well as this city, got their entire
speculative activity from Reading, and
at times the market became panicky,
and as one London telegram expressed
it, even "Nild'' under the conflicting in
tiuenceS at work. The present Reading
situation may be terSely stated. Fhe
companies have not earned sufficient
money for dividend on the first prefer
ence fiveS. There have been expended
about Sl,000,0O0 on the old colieries,
which are chargeable to expenses. This
sum. with possibly some other items,
certain interests in the Junior bonds.
urge shall be charged as betterment
expenses so that enough earnings may
appear on the statement to provide a
dividend on the first preference fives.
If this is done, there may be a dividend
declared, but the company will prob
ably
HAVE TO BORROW THE MONEY
to pay it, as the sum at issue has al
ready been spent. AS might have been
supposed, when it was learned yeSter-
day that the management of the COM
pany had determined not to pay out un-
earned dividends. powerful influence
was at once invoked to change this de-
termination, and both London and New
York operators, and others who are inter-
ested, were bringing these influences TO
bear upon the Reading management.
Persuasion was used, not unmiXed with
threats OF litigation, but so far as had
been developed last night, the determi-
nation of the management remained I'M
changed, and there will be no dividend
declared on the income bonds. The
Reading managers will meet to-day to
consider the question, but it is possible
that they may not finally decide
it, as the first preference income mort
question ION or before the 18th day of
January" and then give the public no.
tice of the rate of interest payable on
the income bonds. There yet remains
several days before the question must
be decided, and there are the usual
pleas for delay. As the accounts are
maze up, however, and the figures
accurately known, the management
can as well decide to-day as later,
and can also thus demonstrate the
enduring quality of the backbone at
present existing in the Reading rail-
road office. The six managers who
with President Austin Corbin will act
upon this subject, are: A. Janet,
Thomas Cochran, Stephen A. Caldwell
and George E. Baer. The income mort
gage strictly defines
WHAT ARE TIE NET EARNINGS"
applicable TO these payments. 1t says
they are the sum remaining of the gross
receipts for the fiscal year. latter de-
Quoting therefrom all the expenses Of
maintaining, operating, renewing, re.
placing and repairing its said property
and premises, including such reasona-
bic implements thereof and additions
thereto as shall be necessary for the
safe, proper ana economical operation
are part of this property and premises"
and few people outside of speculative
circles will say the money spent for
maintaining, operating, renewing, re-
placing and repairing them can be
charged anywhere else than as deduc-
ton for the gross receipts before the
net earnings are aScertained. 1t has,
as we have said, now become mainly
question of backbone-whether the con-
servative management of the Reading
railroad can resist the powerful specu-
lative influences that are trying to
change the actual condition of affairs;
and whether they will altar their ac-
counts so as to produce financial state
ment that will show a sufficient balance
to warrant them III declaring a divi-
dend OH the first preference bonds, and
then going into the market to borrow
the money with which To nav il