New-York tribune., 1894-01-08
REPORT ON READING.
LONG STATEMENT BY THE RECEIVERS
OF THE RAILROAD
ror.1. DEFICIT FOR THE YEAR OVER $500 600
EX-PRESIDENT MLEOD AND HIS
STOCK PURCHASES.

STOCK PURCHASES.
The annual repor. which the receivers OF the
Philadelphia and Reading Railroad Company and the
Philadelphia and Reading Coal ana Iron company
will submit TO the stockholders to-day VIII be ex-
tremely interesting not only TO Reading stockhod-
ers and friends of ex-Presdent Mcleod, but to all
railroad investors The report on the railroad COM
pany shows gross receipts for the year from traf-
&c s22 SIG GO: gross expenses. S3369 423 49,
ngs from traffic. $9.54942S 81; profit from other
sources ssOeO72 25 total. s006s, 40 &C. From this
must be deducted: Rentals $2c OPS 81 interest
count, s5273S64 80; profit and loss. s2i3O6 Go taxes.
.oo6ss AZ; terminal trackagc sS5s15 2l; equipment
ravnents sl,46s39O3 81: improvements. including
Rroad-st and Lehigh-ave. Philadelphia. s221.sg5 96;
total N0.675 1888 Sc; deficit. sGO6.69S CO.
Coal and Iron Company-Gross receipts S2i5s5.-
ss s4 gross expenses. G72 4 profit sl04ls5 so;
less interest. s9sii s2 deficit Sl964s 30; deficit
for two companies $sO2,342 W.
The net result for both companies Is also stated
as follows: Railroad company's not earnings,
sOO6s 4a5 06 deduct for equipment dismantled dur
ng 1885, s7796 COZ IS: S92SSsS7 GS coal and iron
nany's net earnings $l0i 1876 so: expended for i'm
proveInents SCI. .S2 56s. S1202S 06; combined net
earnings SLIGO sl5 "A: deducted railroad company 8
fixed charges $lO675.lSS &C; less for equipment and
,mnroyements sl6942 61-sS.9s0.9ol 50; coal and
iron company's fixed charges sl.29?,sA $50 $780,
746 81; surplus fixed charges $SSO,lGS 93. This
has been applied to- Payment for railroad i'm
$40 81 less equipment dismantled. &79GO7 SS-s6Ss-
7S 90: coal and iron company's Improvement, s767-
So JG-sl 6S2 5l s.; leaving deficit of sSO2342 o..
CHANGE IN METHOD.
The receivers call attention to the fact that this
method Of stating the business showing surplus
over fixed charges Of ssSOlSs 9S approxmates closely
that used In the previous annual report. which
showed a similar surplus of $3lSl,4 4S6 80. But
saws the report. "as in the present condition Of
the companies there Is no other fund than that
arising out Of the income out of which TO make
PAYMENTS on account OF improvements and new
equipment the In which the account Of
business for 1898 has been stated. which shows
deicit for the two companies OF $Sc23i2 o. is be-
Neved TO be the proper one
In the statements OF the operations of the rail-
road company the years 1892 and lss he figures
for 1892 are changed follows Railroad proh
s syen In the report for 1892. S15147 12 net pay
ments on account of equipment In 1892. s12s22 81 :
net payments on account OF improvements IN les1'
s7I SO profit for 1892 $sO7Ss 0l. Operations OF the
coal company are similarly restated Here II IS
shown as explained: The profit in 1882. 1903 L.
and the loss In lS93 1891 200 49, arise from an over
valuat. Of the unsold coal on hand at the END OF
the year 1892 The report adds:
The decrease In railroad gross receipts has been
caused by the prostraton OF business IN the last
half Of the year. For the first six months' eho-
ing May g. ISs the receipts were in excess OF the
corresponding period Of 1892 by 500 whereas the
second six months chow decrease OF receipts, as
compared with 1892 Of si27.20l
The annual report for the year 1892 showed that
the Philadelphia and Reading Railroad Company
and the Philadelphia and Reading Coal and Iron
Company after paying all obligatory charges, mad
a profit arising out Of the operations OF 'he TWO
companies Of S3.lN.4sS52
The security-hoders have naturally found II dl'i-
cult TO understand how 1t came that bankruptcy
followed, and that the property was taken posses
sion OF by the United States Court on the suit OF Its
creditors in less than two months after the annual
report was issued. and 1t seems fitting at this time
that the circumstances that led TO this disastrous
change In the company's affairs shall be plainly
stated
The last annual report stated page % that the con-
tract that had then been recently entered INTO WIN
the Finance Company Of PENNSYLVANIA to provide
cantal 70 carry on the coal business. and the
negotiations recently concluded for the sale OF
securities held in the treasury or the company
would provide for the liquidation OF the hoatng
debt and cover the requirements for capital eX-
uendjtures during the year 1893 The negotiations
spoken Of were in reference TO the sale OF certain
mortgage bonds 10 q syndicate represented by
Messrs Speyer G. Co Of New-Ycrk. which sale was
coupled with option to the syndicate 10 purchase
certain other general mortgage bonds and included
also q loan of s3.Ooo.coO. with bonds issued under
the collateral trust mortgage end other securities as
collateral security
An Issue was made as Of Jaruc y l. 1895. of So
0o00W of per cent bonds secured by a collateral
trust mortgage covering BONDS and stocks OF sub
sidary companies OF pr value OF So.oSi,oOl These
bonds and stocks represented In several cases the
majority interest in a. number Of companies whose
control has throughout the history Of the company
been considered Of prime Importance When. in the
early part OK 's93 II became apparent that the
fnancia! relief Iorded by these transactions
not sufficient ) extrcate the company from its
difficulties It's securities fell in price that the
syndicate dec ned to exercise its option for their
purchase.
ADDITIONAL OBLIGATIONS CREATED
Che repor. says that the contracts under which
the Lehigh Valley and the Central Railroad OF
New-Jersey companies passed under the control OF
the Reading created large additional obligations.
r @ng 10 the blocAades in the hard winter Of
iSsc %, from December TO February 2S. Reading
net earnings fell below the required to meet
the fixed charges accruing IN that quarter by
NsaA3 for the railroad company. and siGS.262 for
the coal and iron company Lehgh Valley fell
sslc.$jl. Philadelphia, Reading, and New-England
S3e567, and to this had to be added the large
losses consequent upon the purchase OF the capt.
tai stock OF the Boston and Maine and NewYork
and New-Engand Railroads. which had to be sold
at great sacrifice. netting loss to the company
OF 81 .i12. "a
When the made up Of Feb
ruary IS. 1885, ii found that the cash railroad
lab!lite, were IN excess Of the cash assets. G96,
S23 co. and the cash liabilities OF the coal and iron
company were In excess OF the cash assets $751;
Gi6 o. the total for the companies being $685.
800 g.
An estimated comparison OF the cash assets and
liabilities of the railroad and the coal companies
for November. 1898. gives for the railroad
OF liabilities OF ss72ss3o 70, and for the coal
pany an excess of cash liabilities OF s.42soo 70:
excess OF cash liabilities for the two companies
$220.2Si 81: estimated decrease In excess Of cash
liabilities since July 81. 4.4l456s 49,
During this period there an increased liability
for interest and rentals accrued. but not due $780,
oSs 80. and decreased asset Of coal on hand OF
g. 420s6i Sc. From this Is deducted an increase OF
railroad material and equipment $54,s5C 81 making
an increase in liability of S2523c9 1s This |
from decreasn oH tho o,o... As .a