The Wichita daily eagle., 1893-08-05
TOO MUCH WATER.

There are valuable lessons in the col
APPS e of the Erie railway. 1t discloses
co!lasal debt the greatest mismaragen.e .ent
and a capitalization of the fabulous
amount of 100000 per mile for the
entire length of the system, which is
551 miles. The last statement rendered,
some twenty months ago, showed
surplus of $10,000.000. On the appoint
ment of receiver last week, it was
ascertained that the surplus was sub
stituted By deposit of Sc, 600, 900, and
the stock of the company found no
buyers at ) per cent. of Its par vaitle.
Upon this showing the whole affair
bristled with interrogations. What has
become of the SIG, 600, 900 and the vast
earnings of the road during the
twenty months of most prosperous
business? What was the oc-
casion for watering the stock
of the company for the unheard OF sum
above stated? By what means and upon
what showing were the managers aole
to float this enormous amount Of diluted
stock of concern already bankrupt:
How many officers of the company VII!
be reduced TO want by the failure:
What amount of stock were they carry
ing and what is the financial condition
of those who have handled the funds:
These are matters of vital interest to the
shareholders, especially those who have
their savings locked up in the concern.
Surely there has not been a want OF
patronage. The line connects the two
great cities of the continent and every
mile OF it lies ia thickly settled terri |
tory. Neither have adverse conditions
come upon il in the way of general busi-
ness depression. Railway traffic has
never been mole prosperous. The carrying |
of the main trunk lines has |
been taxed to the utmost limit, and |
there has been no decentralization IN |
rates. There is. in truth, but one solu- |
tion-somebody has used the money, but |
who can be held to account for il!
Great ado has been made by eastern |
investors about defaulted western mort
cages, yet here is single corporation
wiplng out a greater amount of capital
i'll less than two years than the total loss
in Kansas mortgages within the same
period. 1t is the evening hour that
brings the chickens all home to roost
The crowning infamy of this failure is
in the capitalization of the property for,
three times its actual value.
The earnings would have undoubtedly
paid a good interest on the cost of
and equipment, but when
loaded with this burden of water. there
could be no possible show for dividends.
This fabricated increase sostensibly ''for
of the line" is diverted to
other channels and bankruptcy follows.
The sickening details Of the story may
lot reach the ear of the public, but it is
certain that millions have been swal-
owed up, ana that the ignorant but
;onfiding shareholder will pocket the
oss This new method of increasing
he capital stock" is the crime Of'fthe
When it is made a penal
,ffense and public sentiment rises to the
luty of enforcing the penalty it will be
stopped, and not till then.
The trouble just now with the Erie
'allway is that she is not provided with
/ kansas division" Sixteen million
iollars is quite shortage to make up,
out local rates on long haul would do
he business.
What with the brown stone fronts, the
private cars, the yachts, the horses and
carriages, the laces, diamonds and i'm
ported silks, supported by the inaccessi-
be, unapproacha5le, irresistible railway
general manager, the grandeur of King
,olomon's court would have been
chool of economy.