New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-08-28
CHECKS ON RECKLESS MEN.
NEED OF REFORM IN RAILWAY MAN
AGEMENT
SOME VIGOROUS VIEWS BY EX-MAYoR HEWITT
Louis wINDMULLER ON THE DUTY
OF STOCKHOLDERS

last year and a half monuments Oh 'he ioi''
and ambition of the men who nave causeu ''e
wreck of the properties and the shrinkage IN tner
market values The causes leading to the rum Oh -
MANY railroad companies have been shown IN the
developments and disclosures made IN the cou''e
of recognizing the properties, ana d i'e"'o
prevent a recurrence of the disasters witnessed -
1864 are now being discussed in railway anu
financial circles. .
The confidence of the public has been shaken 10
sucb an extent by the disclosures of the practices
of the men who managed the Atchison. the Noi'"-
ern Pacific and the Reading that there Is iee
in all circles that reform should De pesu" az 0''
The Tribune in recent articles on TINS SUBJECT, pr
scented the views of eminent bankers ana ra""'
men, and their views have received genera c. 60.
tion and their ideas OF reform have met Win sfed
satisfaction The impression in railway anu "''
.cial circles seems 10 be that the Dest wa! ~ Pr
people from playing with the hnances oi oo'p
tlons in the future is to find out just eNac'is "a
is being done at al times and TO give to the stooh
holders the right know about the Workings vi ''e
company Publicity must be given to the actions VI
those who are responsible 10 the stockholders io' Wv
proper use OF their money. Inc sys'e"
iEngland and by the Newly rk ontario anu
ern and the Denver and Rio Grande III "'s 49,.
try of employing accountants Tor the s'o0N ,.ho
seems 10 be a method that is approved py ih., W..
have s,udied the question. Then 1t is possioe ~
tho roads 10 be run for the stockholders anu WV
nublic and not the officers and directors
"a MORE PUBLICITY NEEDED
/, - ,A,,, : Hewitt is a director in sew
-, ao.rora,,ors and he has decided views on '"e
-osnonsibiItv OF a corporation and lis o'e1'o''
tho stockholders and 10 the public IN sp''"'e
the subject recently he said: ,ha
believe in corporations. The larger they ud give
better out II i,s afsrs il is duty owes the pun
lie If man is not Wiling 10 e m ns an officer
Wn nSn e ~ corporation he should resign DIS
ZION Such a man should never te apx,reme;y de-
with eo" have stockhoders accountant to en-
smipe the books for the benefit OF the u
Tn sneakinr further on the subject MI he",''
AZ tnon, an address he delivered before the
American Institute of Mining Engineers IN low
said in part: ~ aud son,e
There is undoubtedly great reueian0e Of a cost and
ground OF objection TO the feci the transfer OF
business TO large corporations has reay nenecon
information public R Se great which the
n, mb,c can apply in order to correct aG gisconrag
avoid conflicts and disastrous s hat the legislative de-
,,ar,ment has shown not mereiy ihutens whrh
abect cowardce dealing WI, MN "T OF the
iw What we need Is recurrence 1917 ~ . order
LAM "prncples Of jurisprudence higher , pf'o OF
@ 'sftsstemanship and the courage on the phoush
our public men 10 STAND up loi cri6cs of personal
Tbe course Of procedure Gear rovsIon Of
,ions which avail themselves OF the psoshs omd he
@ law for the creation Of corporations snoud and
required TO report the result o. Inr Of public
% Amounted for the purpose ms pFence
is already recognized and enforced win com
80 savings and other banks. ana insuI e,,,a a,
10 ss Pnbc;y as to profits and losses wou Oh, a.
once remove the most serious cause OF he workmen
propeb reied upon not make an issue wnlcn can
only result in failure IL WA h pectdcation to the
give any compulsory power OF e., 'insnec;ion 10
eficers charged with the duty or ~ me press
real abuses can S hsn FUN i've investigated by i'm
partial iribuna. Violation Of the 10 be
cipleS ,iw nnnisbed The Legislature VII. readily re-
spond sound public sentiment "a ,ba hest security
a stern enforcement OF the Id" . ''''
The duty of corporations TO Us @ ynrIoves
~onewbat similar to the duty il owes lts einioSr
With industry under the control OF erea' H.
tions endowed with adequate CAPITA, dot ct their
..rorL Won thorouphly organized TO prottct
rhHs and advance their interests win p i',ro
public inspection and pnolcty nb Hesitation COW
"rino, the grounds Of conflict. ana WIN o r,r
pd steadiiy enforcing the law it does nov o SfT
dificuit to forecast the outcome OF uiv
VIM regard to the responsibility Of ra1I n What
rectors | would say that they , khO" ssume their
tiss and the law provides for remedy ea
they are recreant to tner nt7cers and directors
Ing and Northern Pacific railroads nave
light FROM MR.. WINDMULLkh.
1ou,s Windmuller sets forth in recent hunDei y.
.tIarner.s Weekly" history Of the panic ana par.
mis-
,,road nro3erties and other corporations anu 're
',netbods of some railway managers WIN" .@...
..rsed 60 much ruin TO railroad properties Aiu.
sneaking OF seventythree raliroaus III
hands he continues in part as follows
The floating debt Of cot, he e @ when we add to
this the companies which had been neniiarter of
% mense capital invested in railroads mas pc
come unavailable The longer n, The holders OF the
ge,it,es Years elapsed after the pancs OF a.
and 1873 before confidence IN our neriod Of stag
ation now, An examination Of the causes obs
to this state of affairs suggests no m Of reform
b,cb may hereafter alleviate the evi rsnresen,s
me ocai cost To allure capital to me es.apsHn a.
ment Of new line terms are 9ferT ear" casds When
inc pnh1r Of men organize 10 6ulid I She,tmre
~snav sell bonds at about w. lnlo" w. ~ ranwav in
bonds and Snenne often for less than they feaz
for the bonds There are iounders " nc nrooerty
pnd the prosperity of the country oPened UP a soon
road but a majority sell DonT n nakine Inaccurate
a. about the condition OF the prTp,ra
There is too oi1en eorporations know little Of the
,ns tbev agree TO direct. and nave men.
time nor o Who have some bona-fde interest
re chosen because they are competeun' "ia cor
W. nerccntages Of the net profits OF the c,hF,iiy
s.hicb they have every reason 10 ST. 40 ~ orr
* sIniar course has been adopted oy Tme Exec
;nastrai companies each member OF the tS c
tive Committee receives an anua ,o business
nhich is well conducted. Our corporatio,ts ,basa
W. better administered II they were 10 loio" ''e'e
Dxamnles more generally. -, .,o srnerylsion
Ranks are supposed to be under tht
of National state authorities ~ arn6nr these
onoh as I ouOted are not uncommon aHoiiT -.
ssti,ntjons what may expect from raI.ru"d1'
Ssnh nra ctcally are without restraint iheA Va,
Mn,cn p,eneraIiv RELY on a president TO whom they
re- botr election and who controls the proxies OIL
O.me,holdors n one of them should have an opllion
na,n and the courage to express H. ne SOM
would be dropped from the board fnr ,ber
NJ, ~ emploves depend on the presdeht l9I .nu
and retention From among thelr a. .
her he chooses as managers men VINO nav ~,
pe. ~. in the road other than the salaries they
narn. they exert nevertheless. great lnnuehte py
ESTABLISHING and preparing rePpris aMd nfan
gaybicd form basis for the financial directlon;
The president himself often pays MOI earnngs Of his