Year: 1867


their ancient idols-State rights and negro
slavery.


stocLjebbing In the Management Of Railway


and Steamship Companies.


1t is unfortunately notorious fact that men
generally seek and fight for places in the man
agement of railway, steamship and other pub
lie companies, not for the sake Of proving them
selves useful members Of society, but to ad-
vance their own selfish interests by every
means at their command, provided they involve
no risk of consigning themselves to peniten-
tiary. A new board of railway directors is no
sooner elected than q number of heads are at
work to discover the quickest method of filing
Individual pockets at the expense of the stock
holders in general, and conscientious scruples,
it may be safely assumed, are very seldom
allowed TO stand in the way of the execution
of any plans that may be decided upon by the
majority.


These reflections are suggested by the re-
cent action Of the directors of the Hudson
River Railroad Company in voting to double
the capital stock for the ostensible purpose
of double tracking the entire road and con-
structing new passenger and freight depots to
meet the increasing traffic of the line. 1t is
proposed to issue the new stock to the old
stockholders at the price of $4,000 for each
hundred shares. This, therefore, would be
equivalent to selling 1t at sixty per cent dis
count, q proceeding which might reasonably
be regarded as ruinous sacrifice. The sock
in this way is to be increased from nearly
seven millions to within q trife of fourteen
millions. or course 1t will require
twice as much money to pay ten
per cent dividend upon the stock after
this wholesale watering" as 1t does at
present, and it is an open question whether the
net earnings of the road will be sufficiently in-
creased by the improvements which the pro-
ceeds Of the watering process are to effect to
double the amount Of money in the company's
treasury. In any case, however, the plan which
has of late become 30 common with railway
and other companies Of issuing new stock4s to
be condemned, and in the present instance the
large holders Of Hudson River shares who favor
this project are liable to the suspicion Of being
Influenced by stockjobbing motives.


Such improvements a. the company In ques-
ton propose should be made out Of the earn
ings of the road, and sinking fund should bs
established for that purpose. 1t is always to
the ultimate advantage Of . company to reduce
or postpone dividends rather than increase it,
liabilities by issuing new stock; for in propor-
ton to the extent to which it does 80 its divi-
dend paying power is diminished. We had
very recently conspicuous instance Of this In
the decline of Pacific Mail from about 240 to
220, and q reduction of its quarterly dividend
from five to three per cent after 1t had declared
an extra scrip dividend of thirty-three and .
third per cent at the end of last year.


How is it that most Of the railways In this
country are poor dividend paying properties.
Notwithstanding their enormous traficf Sim
ply because they are generally managed BY
corrupt men, who strive TO divert as much -
possible Of their earnings into their own pock-
cts, and who look upon the stockholders pretty
much in the same spirit - cormorants re-
gard fish. In France, where the government
supsrintends the railways, they are much bet
ter properties than here, for the obvious reason
that the opportunities for mismanagement and
corruption are very limited, whereas with us
they are unlimited. The time will come, how
ever, when oil the railway stocks now floating
about Wall street will be bought up for per-
manent Investment, and then the present in
ducements to "water" stocks and increase or
suspend dividends without good cause will no
longer exist, and such stockjobbing as we have
witnessed in Pacific Mail and are threatened
with in Hudson River will be known no more.
Proposed American Line Of Mail Steamships


to Europe.


We notice that Mr.. Pomeroy has reported
from the Senate Committee on Post Ofices and
Post Roads bill "to provide for an American
line Of mail steamships TO run between New
York and one or more European ports" This
bill has passed q second reading, and 1t Is said
that the Postmaster General has approved oft
in special report TO the Senate. 1t authorizes
the Postmaster General to contract with the
Commercial Navigation Company, q corpora
ton existing under the laws of New York and
under o special charter granted by the Lsgis-
lature last year. After stating what sort Of
vessels shall be constructed for this service
the bill provides for the compensation the
company shall receive, which is to be all post
age on letters, newspapers and other matter
transported by or in the mails carried by the
company. This is all very well, and perhaps
we might be disposed to greater liberality for
the purpose Of promoting American steamship
lines and shipbuilding. We would encourage
such important national enterprises But the
projectors of this scheme have gone too far in
the kind and amount Of aid expected. The bill
actually provides that the Postmaster General,
acting for the government shall guarantee the