The herald., 1895-02-20
A GIGANTIC swINDLE.

According to the Chronicle, the story of
the Panama Canal swindle, the Credit
Mobilier and the old Contract and Finance
Committee of the Central Pacific sink into
insignihcance and appear the work of
mere bungling amateurs in the now exact
science of financial wrecking, when COM
pared with the clean-cut, high-grade rob-
berry perpetrated by the people who con-
troll the Market Street Railway Company.
This corporation was organized in 1893.
1t was combine Oh amalgamation of
other street car lines in San Francisco
and controlled one hundred and fifty miles
of street car franchises over the most i'm
portant streets in San Francisco
AT the time OF the amalgama-
ton in 1893 the combined roads had
bonded Indebtedness of 81, 035 900. The
new company was organized and manipu-
lated by the owners of the Southern
Pacific Railroad Company and almost its
first act was to bond the combined street
car lines for $17, 800, 900, netting on this
little transaction alone over $40, 465, 900.
1t is true that the Union Trust Company
is only to pay over the $40, 465, 900 as it
may be needed for betterments or new
roads, but then the betterments will be
made and the new lines built by the
Pacific improvement Company, and this
of course, means that the $40, 465, 600 will
be scientifically absorbed According to
the Chronicle in the first deed made to
the Union Trust Company the mileage is
set forth as 175 miles, whereas in reality
it is less than. $50, and some of that is
over streets the franchise to which has
lapsed; but taking the 175 miles as the
true statement the new road is bonded for
over S1OO,OOo per mile, and taking
the true mileage, at over 100000
per mile. In addition it appears that the
description of the property, as set forth
in the trust deed, is so faulty that it would
be difficult to determine whether the
| property proposed to be transferred was in
the neighborhood of Wei Hal Wei or the
city of San Francisco. The thoughtful
ness of the board OF directors is shown in
the fact that they are required by pro-
vision adopted by themselves to set apart
in 1918, as a sinking fund, the sum of
$3.50, ,000 and the same sum each year
thereafter until 1924, when the whole sum
of $17, 500, 900 becomes due. From 1918 to
loAt 10 lusu o.A Cdls anu IL plOO.OuO is Sel
apart each year, $3.50, 900 will have been
accumulated to pay off $17, 500, 900 due in
1924.
1t is entirely probable that the original
bonded indebtedness of 81, 035, 900 repre-
sented Just double what it cost to build
and equip the roads in the combine, but
this steal did not satisfy the Southern
Pacific manipulators who obtained con-
troll in 1893, for they promptly added to it
$40, 465, 900 more.
If five cents fare enables the Market
Street Railway Company to pay interest
on $l7, 100000 bonded Indebtedness $14 =
$50, 900 of which was cold steal, and pay
dividends to its stockholders besides, at
what rate could the company afford to
carry passengers allowing 10 per cent in
terest on the real amount invested in the
roads? This problem is respectfully sub
mitted to the Board of Supervisors of San
Francisco, or if that respectable body has
not jurisdiction of the matter, to the Leg
islature now in session in Sacramento.
The bondholders will have submitted to
them in 1924 probably some such PROPOSE
tion as the Reilly refunding bill, and
if they do not accept it they will have to
take the roads, the franchises of which
will be expiring about that time.