The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1895-09-08
Railroad ReorganizatiOns Not
Always Conducted Honestly.
CONFIDENCE GENERALLY BETTER
But Some Cases Open to Criticism
The 0. R. g. N. Said to be
One of Them.

A Nov York paper, commenting on the
effect OF railroad management on general
business. says that during the last few
DAYS pans for recognizing two OF tho
important railway systems of the country
have been promulgated to the public ana
are now under discussion in financial
circles. The Erie reorganization plan as
made pubic contains an apparently full
disclosure of the physical and financial
condition OF that extensive property,
with complete details of its earnings,
treasury assets, outstanding obligations,
the several Classes of its securities and
their relations to each other, with what
seem to be reasonable estimates OF earn
ing capacity and the possibilities OF the
future. 1t has been noted that this an
nouncement, made over the names OF
persons having the confidence of capital
lists and investors on both sides OF the
water. has had a somewhat inspiriting ell
feet upon the market for railroad secur-
tiles. the movement in which has been
marked and significant. The renewal OF
confidence in this regard is most en-
couraging sign. For it is not to be de-
MED shat distrust of the financial ad-
ministration of our great railroad systems
has had much to do with the long-con-
tinued business depression and financial
distress. 1T would be very unfortunate
IL anything should happen in the course
of other reorganizations to impair public
confidence or renew the old distrust.
Fears are expressed that in the pro-
posed reorganization of another great sys-
tenn, to-wit, the Oregon Railway and Nav
igation Company, a contrary effect may
be produced by what appears to those
interested to be a lack of candor, and
reticence as to details and particulars,
on the part of those who have under
taken the work. by the terms of the
plan offered by them the holders of the
company's stock are called upon to pay
an assessment of Sc per share for the
privilege of participation in the reorgani-
zation. Complaint is made by some OF
these that they have been kept in ignor-
ance of the condition of the company
ever since the property went into re-
ceivers hands, some fourteen months
ago. They complain that during all this
time no statement of earnings and ex-
penses has been published, 'and that this
is without precedent in the history Of
railroad corporations of such magnitude,
it being the practice to publish earnings
statements monthly And they say that
this information which has been with
held from the pubic and themselves has
been regularly communicated to the per-
sons engaged in the reorganization, and
has been made the basis of their plan.
They allsge, moreover, that there Is good
reason to believe that during the year jus.
closed the company more than earned
its fixed charges, and that under judi
cious management it could have cured its
defaults and have been taken out of the
hands of the receiver.
1t Is understood that a conference of the
dissatisfied stockholders has been had, at
which the statement was made from what
seemed to be authentic sources of infor-
nation that the net earnings now in the
hands of the receiver would, with the 6
per cent assessed upon the stock, be
ample to meet all defaults and provide a
substantial, sum for contingent cbigl-
tions. In this state OF things they say
that a pan of reorganization, which, af-
ter making an assessment of Sc a share
upon them, takes the control out of their
hands and passes it to the preferred
stockholders who eject ten of the fifteen
directors, is manifestly unfair. If we
are correctly informed, these stockholders
contemplate taking Legal proceedings with
a view of setting aside the decree of fore
Closure and restoring the property to
the corporation. The possibility of such
a complication Is much to be regretted
though it must be admitted that the
Withholding of monthly statements by the
receiver and the apparent lack of candor
on the part OF the reorganizers, would
justify such a procedure. Several other
reorganizations are pending, upon the
conduct of which great deal depends,
If public confidence in our railway man.
agement is to be restored. We repeat that
1t will be very unfortunate for all our
financial and business interests If in the
course of these important transactions
any color is given to the charge of sharp
practice and doub,e-dealing.