The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1894-05-13
RAILROAD INDEBTEDNEss

Inc liabilities of the Reading Railroad
company are s1OO,O0O,O0O in excess of its
assets. Officials may juggle the figures
and accountants may strike balance
sheets, but the fact remains that that
company is hopeless wreck. All of its
schemes for reorganization or readiust-
ment are makeshifts that are intended to
defer the day of Its complete collapse.
The corporation has liabilities exceeding
SOS, 100000, and it does not own assets
worth 75,000,000
l., The coal lands actually cost SIG. S52, $50.
but IN 1876 the sum of S14443,57O was added
70 the nominal cost of this asset by Mr.
-Gowen to cover losses on three items
FROM January l, 1876, to the present time
9iOOO,O0O tons of coal have been taken
rom, mat land, and yet this asset, which
actually cost 26,000000, at ridiculously
high prices, and from which $4,000, 900
tons OF coal have been taken. is now
inquired In the assets as worth $50 000 000
Another specimen of the jugglery by
which these assets have been padded APP
peared in 1887, during the process of re
organization, when the managers of the
Reaalng: railroad were confronted by a
loss OF S20,000,000 which had accumulated
on the balance sheet. They wanted to
start with clean slate, and so they
added 900 to the value of the coal
lands by stroke of the pen and wiped
loss ACCOUNT; Similar jugglery dissipated
Sl,O0O,00O additional loss. and the slate
was cleaned for new start. Since then
the value of the coal lands has been
marked up an additional $7OO0.0OO
The Reading railroad and depots were
all entered on the books of the COM
pany in 1888 as having cost S27, $1,000. In
1893, though the number of miles of lines
is absolutely the same 1927 miles,, the
railroad and depots are set down in the
assets as worth SS0,O00,O00 In other
appraised at S26O,0oo. This iugglery Of
$50, 100000 has enabled the company to
make an apparent showing of soIvency.
The Schuykill canal is carried as an
ings, in 1898 were only $4,000, or six
tenths of l per cent. of that valuation.
The Susquehanna canal is valued at
y 200, 900, though its gross earnings in
1893 were only one-half of l per cent. of
that valuation, and its operating ex-
penses are $50 per cent. of its gross earn
ings.
Altogether $1S.OOO.0 900 of assets" appear
counts, commissions" advances to
auxiliary concerns, equities in leased
roads and canals, etc, all of which are
practically worthless.
The accountant appointed by the bond
holders of the Reading railroad reported
that the liabilities of the Reading Rail
road and Coal companies, as appeared
on the books. were $7,1S6O0O in excess of
the assets, but the comptroller of the
two companies figures out that the as
sets are $5,000,000 in excess of the liabil-
~
| is due to the way these bookkeepers are
trained to state accounts. Bookkeeping
! is supposed to be an eaxct science, and
discrepancy of ST., 900 in the balances
! of company might alarm the ordinary
investors, but when a concern has culti-
waited capacity for piling up liabilities
at the rate of $6,000,600 year for period
of ten years these bookkeeping disagree
ments may be brushed aside as trifles
| In fact, the president of this invalid cor
| poration, Mr.. Joseph S. Harris, discusses
these differences in report which has
! just been issued. and dWells upon the
countants in respect to the assets and
| liabilities of the Reading companies A
difference of S1Z,000,000 in balances may
be accepted by Reading railroad investors
| as a substantial coincidence. This
phrase ought to be particularly pleasing
! TO holders of Reading stock who are
| not within $50,00O.000 of daylight.
The wiping out of these stockholders
would have occurred long ago if the
bondholders had not been led to believe
that they would have incurred heavy
company possesses special privileges by
| Legislative grant. If sold out those privi
| leges would be revoked by process oil
law and the reorganized company would
| sylVania constitution which prohibits car
rying companies from engaging in min.
| ing or transportation.
The Reading was earning p per cent
upon its stock before il engaged III coz
mining. The stockholders borrowed
money to buy coal lands because they
wanted to keep all the profits of theil
coal speculation for themselves, anC
they therefore issued bonds instead Of
stock. Their game of greed and grail
has brought its penalty. In thirteen
years the road has been continuously il
possession OF receivers and trustees, will
the exception of one period of eighteen
months.
| The aim of the receivers and court anc
stockholders just now is TO prevent The
dismemberment of Reading. They are try
| ing to maintain the property as an en-
tirety and to preserve the franchises o
cannot succeed The load is too big ever
i! for a Judge of the United States cour
to shoulder. The performances Of TIT