New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-02-21
of the Lchigh Valley Railroad by prompt pay
ment of the rentals under the existing lease
HISTORY OF THE READING SYSTEM.
AMBITIONS OF ITS VARIOUS PRESIDENTS
FORMER RECEIYERSHIPS.

was chartered by the State OF Pennsylvania on April
4, 1888. It's original line was sixty miles In lengr,
extending from Philadelphia to Reading 1t gradually
extended It's lines by purchases and leases and
acquired extensive coal fields and became one OF the
largest coal carriers I'm the country. When Franklin
b. Gowen was elected president he became filed with
ambitious schemes for the development Of the property
and attempted, much as Mr.. Mcleod has done, 70
secure a monopoly Of the coal trade. Under ns
management the stock in May, 1880. had advanced to
81 SIS per cent
On MAY OF OF that year. however, the company
defaued in the payment OF It's maturing obligations
and three days later was placed in the hands OF re-
cefvcrs the stock falling to Il IA per cent. Ry
careful management the property was put INTO shape
again, and by February, 1883. the stock Rad risen
that II was selling between 40 SO and 50 IA per
cent. On the last day Of that month the receiver
ship dissolved, and George De B. Keim was maze
president. He Immediately started in TO repeat Mr.
Governs tactics, and within three months had leased
the Central Railroad OF NewJersey for 800 years at
an annual rental equal to the fixed charges ana
per cent interest the capital stock other ROADS
acquired for a Ike term. and the business OF
monopollzlng the coal-carrying trade went merrly
forward once more. until June .. 1884, another
receiver appointed the stock TINS time Jumping
| from A TO "a 34 per cent.
Drexel Morgan & Co. were induced to undertake
the second reorganization, and presented plan WHICH
after long delay adopted by the stocKhoiuers
ard ON January ., 1885, the company was once more
restored TO the hands OF It's owners, with the STOCK
selling at 81 1s per cent. Austin C0rbn was eec'eo
president and retained the Office until he was sue
| cccded In June. 1890, by Alexander A. Mcleod.
prominent feature Of the Drexel reorganization plan
Vas fine Judgement OF the control OF the company III
a voting trust which held proxies for a majority OF
the stock. Mr. Morgan was trustee uhder 'n'S d.
rangcment and had voice In the mahageme" oi
affairs until september last, when the trnst WIS us
..t.1 higoef1v n
holders OF the stock.
Mr. McIeod's presidency was uneventful unli
,hout February l. last. when the transactions In
Reading jersey Central and Lehigh Valley STOCKS
began to Increase. Prices steadily advanced, ana
enormous quantities Of the shares were sold dhhy
People In Wall Street knew that some scheme was
afoat and wondered what 1t was The lew who were III
the secret bought and ought these three stocks uh
they exhausted their resources Finally on February
10 an explanation Of the mystery was given TO the
public The announcement came that the headi"s
had leased the other two lines for 0oo years. ana u'S
was I'm control OF - per cent OF the competitive
anthracite coal traffic of Pennsylvania
The terms Of the leases were that the heanihs
assumed the obligation OF interest. rentals, etc. ana
guaranteed on the stock OF the Lehlgh Valley dlVdehus
al the OF per cent year up to July l, loo2'
dividend OF per for the next year, and d'lueius
Of per cent n year thereafter All profits IN ex
.ss OF per cent were to be equally divided between
Reading and Lchgh Valley until the latter earned 10
nor cent The surplus above that figure was 10 60
to the Reading. The Central Railroad OF New-Jersey
| by It's agreement with the lessor, was TO receive
per cent year It's stock and half OF the surplus
earning, above that figure. The Reading was 10 re-
tain the other half In 1889 the Jersey Central PAID
, dividend Of 3 per cent, but after that paid per
I cent.
| The Jersey Central was nomnally leased to the
| Port Reading Railroad Company. This was organized
| in November. 1890 I'm the interest Of the Reading
| TO build twenty miles Of road from Bound BrooR 10
Staten Island sound. where extensive terminals were
planned.
The financial world expected great results from
| the DEAL J. Ferpont Morgan. OF Drexel. Morgan
4 Co.. who was concerned in the TRANSACTION said that
| IL was within moderate limits to estimate That the
| union Of the roads would add from S3,OOO'ooe 10
- 900 year 10 the earnings o. the Reading CoH-
pany The reduction of expenses in RAINING the roads
and the abolition OF the rt,cutting which had been
Injurious the coal trade would 1t was thought
make the IDEAL" Of immense advantage to the Reading
| sacmcnt made by the Reading people at that
| time said The Reading Company and It's leased
| lines now represent SpcO00o,OOO OF capital ana itS
| earning, will amount 10 Ss0OOO,OOo year. Inc
Jersey Central earned last year 10 IA per cent 90
| that the Reading will get profit on this lease from
| the start. Aside from other considerations, Pres-
dent Mcleod Is confident that the Lehgh Valley after
Nav l. when IT, line IS Completed Is certain to
earn more than the full amount OF the guarantee
wholly regardless OF any benefits which Its revenues
may derive from The relations between the three
companies Tie Lchlgh Valley Is now paying the Erie
II 80 900 annually for trackage, sum equivalent
| to per cent on lis capital stock. II Is estimated
hat the changes taken together will yield new
increase OF NJ least - cents ton on all coal handled
~ the consolidated Reading system As the tonhge
II the three companies aggregates ABOUT -f.oVo''oo
| irnuillv. this single item means net gain OIL
| 5000 COO
Ndr,pcAd questioning to the Legality OF the com
hlnatlon Congress appointed committee 10 lnvesti-
ate the sJer' ana 50 qua 'Sc aaI
NJ 81 r, solution lccalzing the lease OF The Jersey
| Governor Albeit vetod he bill The AtO.ney G,n
| .ra of NcwJcr>ey brought suit to annrl the ase
md on ~cptsm or !. 1692. chancellor Mttrll d.ciitl
that the combination. so far as 1t affected the jersey
| central. Illegal.
| Jersey. in compliance with Chancellor McGills de,
csIon and 10 prevent the appointment Of receiver
the propery ahrSgS'd the n l""SI ana
Meanwhile Mr.. Mcleod hnd been active In other d.
recon,. lie had secured the control OF tne pousn,
kcepsl Fridge and made alliance with the Boston
and Maine under the terms OF when ne was e,ectsa
president Of the latter corporation .c on %ct fh &
troll of the Ncwi9rk end New England 49, although 1nro"s
MANA nlI cement Ills object in entering this field
to enable the anthracite combine to deliver their coal
hrouchout -Eneand over lines uneef ,ner OVID
| The products of New England factories to the West
traHc which hnd not heretofore HHurtu Ill
| The business OF the coal roads. In furthernncc OF
~, ambitions scheme, Mr.. Mcleod VII tiny wiested
Tho Connecticut River road from the Consolidated Com
| many after lease to the latter llhd been agreed
| mon and made every effort To buy mp the Old Col
ony. and thus partly shu' no New-iorN' Ne"iaVeh
| and Hartford ont Of Boston
Mr.. Mcleod's success In carrying out his plans
vn, great nj first but reyerscs quickly followed, and
now less than thirt months after the formation OF
The combine" complete failure has overtaken him.
HEAVY SALES OF READING IN LONDON.