The sun., 1899-02-12
5innaeial.

cfiuAutiRI.
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FINANCIAL FORECAST.
Some nine years ago certain individuals owned
four railroads west of PlttsburE. Al that time the
Pennsylvania Railway %. did not own a railroad
west Of PittsburE for h-southwsst business The
Pennsylvania managers therefore desired TO secure
the control of such property. with that end in
view they entered into negotiations with the owners
of those four railroads. They asked the Of
those four railroads to merge their interests into
corporation and give the PennsylvAniA Railway Co.
the control of that corporation. To induce them
to enter into such contract and exchange their old
securities for securities in the corporation GER
tain conditions we're agreed upon in reference to the
now company AS to dividends on the new stock.
the following explicit words usedi Tho net
earnings of the company as the sAmo may bo found
and declared by the Board Of Directors but not
otherwise. shall be applied TO the payment Of divi
dends each year on the preferred and stock"
Year aftor year since that time the Directors Of
that corporation have published annual statements
to the stockholders. and In those statements have
found and declared" enormous net earnings.
They have not left doubt in regard to such net
earnings. They used these words. met earnings
s4.s5o. .5se. co." This was for year 1897. met
earnings - 1884, ,7e1;" this was for year 1893. Tho
Directors made similar statements OF net earnings
for previous years. yet in recent they have not
given the stockhoders ono dollar. On the contrary.
they have accumulated millions of surplus Now,
We understand. the United States courts have been
view to distribution among stockholders
Before the of those four roads would agree
provements. The exact language in reference to the
preferred and common stock was; THE stock or the
new company shall be issued by tho Directors from
amo to time for improvement of tho company's
property. the purchase and construction of Addi
tional railways and other lawful purposes" Tho
Directors have expended many millions OF dollars
for additional railway track Pittsburg to colum-
bus and similar double track in other localities and
have paid for elevating tracks in Chicago. and
pended other large amounts. and yet have not re-
ipul ahare Of pre NJ
stock We understand tho United States courts are
now asked to grant an injunction preventing further
use of net earnings in this way and are also asked TO
require that securities shall now be sold and tho
proceeds paid over to tho stockholders as originally
contemplated.
The p. c.. G. and st. L. stockholders entitled
many millions of dollars in immediate cash pay
ments. They are also entitled to the net earnings
hereafter which will yield them 3, 8. !. 10 per cent
as developments proceed
The Pennsylvania management 10 now trying to
put Fort Wayne guaranteed stock at near 200.
Which is worth more to that management. the Fort
Wayne stock a road controlled absolutely by
lease 900 years to run. Pan Handle stock
which they cannot control as they choose except
by violating individual rights? II they were now
trying to buy Pan Handle shares they would be act
ing moro wisely. We record the prediction that
P. g.. c. and st. L. stockholders will receive
money In dividends during the next Ave years than
the stockholders of New York Central. Pennsylvania
Railway, St. Paul, Burlington or Rock Island.
PENNSYLVANIA: We have called tho
Pennsylvania Railway
property business miracle Whom We think OF the
relation that property bears to the future growth OF
the United States. its enormous surplus. its compre
hensivc grasp upon the commerce OF this country
and its Glded future generally it seems scarcely a
figure Of speech to call this property miraculous
creation. II there are any misgvinGs In tho minds
pany, those misGivnGs do relate to the property
ITSELF but to tho management. II the Duke of Port
land and other distinguished foreigners return
ing the shares Of this corporation to the Atlantic
coast they cannot be governed by doubts about the
property itself.
What is the matter with the management. il any
thing1 Does 1t relate to the operating department?
Is there something wrong with tho financial manage
ment or Ia II connected with the department OF