The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-02-12
Protection for Security Holders.

Protection for Security Holders
A national commission and state COM
missions have been created to fix traffic
rates on railroads and to protect shippers
against excessive and discriminating
charges but nothing has been done to pro-
tect the holders of railroad securities against
railroad spectators and wreckers. A very
large part Of the wealth Of this country IS
now represented by the stocks ana bonds Of
railroad corporations. These securities are
held in Europe as we'll as in this country,
and from them hundreds Of thousands Of
people, including widows and orphans,
draw their incomes. People are constantly
investing their money Ia them.
There is no way Of knowing whether or
not a railroad is solvent. or whether or not
it is being carefully aud conscientiously
managed, except by the reports issued by
its president and directors. Whether or not
those reports tell the truth. and the whole
truth, about the roads financial and phys
zeal condition no one except those intrUsted
with tho roads management knows. Fig
ures can be juggled with so as to show
almost any result that may be desired, and
in these days Of stock jobbing and railroad
wrecking railroad reports are often made to
show a condition Of affairs that is the very
opposite Of the truth.
Shrewd buyers OF railroad securities are
not often misled perhaps by the reports OF
q railroad corporation, but investors are
constantly mlaled by them. In all parts of
the country there are people who have suf-
fered heavy losses because they have been
guided in making investments in the secur-
tiles Of railroads by tho duly authorized
reports OF the president and directors Of
those roads.
Why shouldn't the holders of railroad
securities have some such protection as is
afforded to shippersl Why shouldn't the
state furnish an officer to make out the ans
nual reports Of tho railroads just as it pro-
vides an Inspector Of banks9 Railroads as
we'll as the banks are creatures of the state
and the people invest their money in one
class of corporations as freely as they do in
the other.
In England the government licenses GER
tain accountants and the law requires that
of each railroad shall be made out by one of
them. They are wholly independent Of the
influence of the railroads aud tho name of
one or more Of them to a statement of the
financial condition Of a railroad, showing
its gross and net earnings and the disposition
of its moneys, ls a guarantee that it is COR
rect.
Why should there not be such officers In
this country, attached to the railroad COM
,,ios{ors or notipc ipdarapdantIv9 II tbara
we're such officers it 10 certain the annual re-
ports Of many railroads would show CON
dition Of affairs different from that which
they now do. They would be a sure
guide to investors. ana they would check
speculation in railroads and the wrecking Of
railroad properties. If the physical condt-
ton of a road was being allowed to deterio-
rate in order to show big net earnings aud
permit the unloading of stock on
innocent holders the report would Snow it.
IL would be notice to security holders to put
other men in charge OF their property and
warning to investors to avoid the securities
of that road
10 is clear that something Is needed for the
protection Of security holders. who include
al classes Of the people. Even the poor
often have their little savings in
vested in the stocks or bonds
of a railroad and courts authorize
tho investment of the moneys of estates in
the securities of roads that have long en-
joyed good credit.
True statements OF the financial affairs of
railroad are the greatest safeguard Of the
security holders of that road, and how can
true statements be obtained in all cases ex-
cept in the way pointed out9