New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-02-21

No one was able TO 90 morc tilah Sl"'"''N -.
the subject. The first answer that sugses'e" ns''
was that the Morgan-Vanderbilt interests WIN"
had been antagonized by Mr. Mcleod during his
year of ambition and power. had taken ad'an'aSo
of the tight place in which they knew the Read
ing syndicate to be, and had precipitated the coi-
lapse for the purpose of wrestling New
York and New-England and possibly the Phlla-
delphia and Reading itself, from the hands OF
the daring management That the control OF the
road had passed from weak into strong hahus
everybody believed j. Pierpont Morgan, how
ever declared positively yesterday that the sltua-
ton of affairs in connection with Reading as mani
tested last Friday was as much a surprise to MIN
as TO ANYBODY ese that he had not bought or SOFA
! q single share of the stock, and could make MS
denial absolute that he had had anything 10 90
with the terrific raid on the securities lie eX-
pressed himself also as unable to give clear rea-
son for the break, except as a mere collapse Oh q
| great speculative venture.
TALK ABOUT THE TROUBLE
| rew persons in NewYork who are close to the
| Reading management and are supposed to know
its secrets could be induced to express an opinion
| on the situation. Their general IDEA scemed 10
| be. however, that the trouble all came from the
magnitude Of the operations that the syndicate
had tried to carry ont with limited capital. III
order to float their immense schemes of acquisition
| in New England territory it became necessary for
| the pool to carry their own large holdings Oh
| Reading on very narrow margins. Last week
when some of their loans were unexpectedly
ca lcd a sacrifice of stock became the only means
| of meeting the demand, and its appearance on th'
| market started prices downward This. OF course,
either reduced or wiped out some of the margins,
| and more. stock had to 20. The result was that
the downward movement became food and swept
on with terrific force, carrying everything before
| il and stranding the company high and dry on a
rrccvcrshp. As one banker, in speaking OF the
ambitions Of the pool, expressed 1t, They have
| been spreading it out too thin, and the day OF
reckoning had to come sooner or later.
| What induced the holders of Reading cOllat-
cra 10 call the first loans is not clear, but there
| is little doubt that Mr.. MclcOds policy of
having the interest on the cOmpany's income
| bond, with borrowed money had large in
| nuence in the matter. \ well known banker
said Yesterday that conservative capitalists ana
money lenders would naturally look with sus-
| picion upon any institution which should Dorrow
LARGE sums of money and begin paying it out as
interest on income bonds. 1T might be reason
| abb. to borrow money to pay of mortgage bonds,
or even to pay interest on them; put II dlu seem
| like. an evidence of bad management of financial
| affairs 10 negotiate loans for any such purpose
| ~ has been alleged was done by the Keadlh9'
| Another cause for the apprehension whlch 'ooN
| hold of the speculative mind was the decrease
| i'm earnings for January. lhe reasons asS.~.t ~
for this dccrcas" grow ont oi the sNeriI vi w, m
| winter which has blocked Navigation ara re-
tardcd freight movement to an unusual degree.
These conditions manifested themselves, IL was was
said in a marked way In the operation 9i J 'nI
| Roadinc company sine the severely cold ana
.tnrniv weather set n The stock began 10
decline. People looked around for reasons ,,, imvS
Iaw the decreased earrings and they TOOK alafui.
| Holders of the stock operating In orhaii OF ,nt
| syndicate called for increased margins IN suoll
| fines a 10 per cent margin H. not cohs,i'Itu "a "
very safe one. and the sIccua,or Mo", no or n" 3o
ror cent additional AS unjustiilab" In thr circulH-
| stances hut If II: wcr" widely spn,dd III Ms
ventures he would find IT rather dulIu', ''g' I;gh,
| 10 put up the required amount IN l' .I il.aI
| of such development. thO-" who had re91'idui ~
call loans 10 the company woul l'F iliu'm me,
| exercising their privirgc ana getting '''" "'o''s
| back soon ~ possible
| SEVERE CRITICISM NOT WANTING
Mora so,.oro criticism than this of Mr.. Me-
Icod's management was not lacking however
| There were those in the Street who held 'na'
n,vmcnt of interest on the income bonds with
| borrowed money was only sample ana NOT 'he
worst of the mismanagcnent. 1t was asserted
th,t Mr. Mcleod had given so much Of his time
f. developing hi, great plan of conquest that ne
| had rot been able to look properly aiter th'
| interests of the Reading itself. and thar ms sud
| nrdinatcs were manilcstly ncapdpi". Us IL. 'N-
| ,nnic of his i'm the operating department at
tnntion was called 10 the Fact mat me roi'l nit
! contracted to deliver large amount OF coal IT,
! emily and had been unable 10 do 80, making IL
nee sSary for the purchaser to go I" 0tiicr con-
n,uios and buy enough 10 supply MS d'llS hF'u
| while waiting for the Reading. II was ;iN3 Sll'i
| th,t thn system OF bookkeeping was bad am
| ,iled to show maturing obligations until their
| ,avucnt was due thus giving to the company ;
| .tatrmrnts n misleading if not Il ialSe showing
| Curio.itv n tO the ultimate control OF New-l ORR
and \ov I'm land was Just eager a. that r"Gal a.
| inc Reading itself. The Transactions III h'd"hs
,crc cnormou, and went far beyond those IN any
other stock. but then Ncw,tngland wa oS ill., III,
mems neglected II stood third on the list with
dnalinps in e74la shares, being kept from second
uncr onlv by Sugar, which was traded IN actiIeiy.
New Eng Land prTsv 9prmGTG at ;riccs & ''l quickly went
dawn 70 "a ID. loss of 1-2 per
cent Later it recovered AMI closed at 40 as a-s
a NET los of - ror cent. The re was
tokmn by ,nany to mean that what not few re
oardrd as The real ohic"; Of the bear crmpiIa1
was a@comrshc Tt Is that W. NeWEnc,ah XII onH cnnd ,a
no lcnrcr touch K. The Rcadinc interest had had
~ t' dr"n il With the Rc1ding holdings Themselves
! Inst where il had gone was the puzzle.
rvERyRoDY's FIRST THOUGHT.
Tho first thought of every body of PicrDont
| uorc,n 1hi, was naturally the ease. TIL" whole
c,mpaion had been laid AT his door. Mr. Morgan
| and I'm, Vanderbilts certainly dld not want MI
| Mel cod i'm control OF III" NcW-EhgIlhu' dhi 1t
was quite evident that he was not in control.
| Wncthrr Reading had been forced down to ram
| him and drive him from the field was qu,Stlohc'i'
| but that ho ha! been driven from the neld as lar
| as competition with the New-lork, New-li3ven
and Hartford was concerned did not, admit OF
nnch doubt The only doubt was whether or not
:, or, n,ssiblc for any of his friends To have
honght M the Ncw-England stock thrown on the
market and prevented its falling into other hanS
some thought it possible that the Parsons ln,er,st
milht have increased its holdings TO prevent the
| Vry yIIaycn people from getting control. =,
President Charles Parsons, of the New-Ens-
land, however in answer 10 Il Question whether
and yyhrtbcr or rot he knew il DrcXcl. Morgan
JS Co. had bought New England, said to a
Tbunc renortrr: There have been llrgc
Hicks of New England bought in my interest to
| nv knowlcdec. know nothing as to whether
| or moi DrnXcl Morgan x Co. have purchased any