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Jiily 21, 1994
Record and Guide.
De/oteQ to KeM Estate . E)■JllD!^'G i''^R,c>(iTECTjr\E,HousE:[ioiD Dreoi^notJ,
Bas!i^ES3 A^foThemes op Gi:fJEj\d Wterest.
PRICE, PER YEAR IN ADVANCE, SIX DOLLARS.
Published eccry Salurday.
Commiinlcatlona should be addressed to
C. "W. S"\YEET, 14-lG Vesey Street.
J. 1. LINDSET. Business Manager.
Beooklyx OFFifE, 27t)-2S:i \VAsnixnTOX Street,
Oi'p. Post Office.
" Entered al the Post-office al New Tork. jV. 1'., as second-class matter."
JULY 21, 189-1.
For additional BrooMijn waiter, see Brooklyn Department immediately
followina -Vcfl! Jersey records (pane 101' i.
THE imiirovement in Tjiisiness which wa.^ induced by (he
prospect oj; an early end to tarilt' discussion disappesvrs
■\vitli tlie new outbreak of ditlereuces in CongTess, As the
memorial from the Ohiciigo business men stated, what is wanted
is a settlement, the details would not matter. Last fall saw a
dispute with rlie President, House aud ma.iority of the Senate on
one side and a minority of tbe Senate ou the other; now a con¬
flict has arisen wilh only the chaus'e of the majority of the
Senate for the niinority in tbe parties, aud it remains to be seou
whether victory can be achieved by the larger elements thi.'s
time as it was in the case of the Silver question. The
interim is, however, likely to be a very unsatisfactory
period for the business world. Without some sucb
e.vasperating cause it would be impossible to explain the
weakness in the stock market which held so firm during the rail¬
road strike and which now ]iresent.s such a disorganized appear¬
ance, notwitlistantbng that Debs has shown a preference for the
inner walls of the Cook Conuty Jail to meeting the men whom
be misled. The simultaneous selling of several Southwestern
railroads'bond issues sngge.sts foreiirn selliui,^ which may also
be attributed to di.><gnst at the failure of Congress to dispose of
the Taritt bill aud which also is the most probable cause of the
renewal of gold exports. The market will move on news from
Washington under professional manipnlution nutil the present
disciiSxSion is ended, but it is certain that outsiders will ouly be
vfiilizers as long as present uucertaiuties exist.
jf CARNOT'S tragic death has shown that men's hearts are
in the right place after all. The sympathy that was
lavished on Triince in the moment of her terrible bereavement
is finding response in the better feeling witb which France her¬
self is regariling her neighbors, both in Europe and across the
ehaunet. Santo's dagger may hiive opened the wsiy to the
universal peace that all good men have desired ; if this is so its
victim would himself, from all that Is known of his love of
rountry and humanity, not regret the sacrifice. The wave of
Iricndliuess that is passing over Europe is uot without its result.s
on business. There is there, as we feel here, a vibnitiou as if
the forces of commerce were i>repariug to put forth their
strength again. One of the best signs is the roovemeut of
money away from London, aud the fact that banknipt countries
like Greece and Italy arc finding a basis npon which to settle
wifh their foreign creditors. London financial .journals
ivcognize the ]n'obubiIity of gold coming this way
soon. Active measures wvv being taken hy repre-
sentalive commercial bodies in France to i^rotect
and extend its foreigu trade through a group to be formed in
the (.'hiimlier of Depuiies. tlerman iron exports increased 19.;i
|)er cent in the hrst tive months of this year compared with the
.same time in 1808, largely owing to the Knssiau demand. The
project of establishing a (ierman bank at Mi.hui ha.s fallen
through. Later advices from Austria are not more favorable
for the wheat harvest which now cannot fail to be a poor oue.
The City of A'ieuua has for the iirst time issued a loau witbout
the aid of hiinkers and with complete .success. Fifteen Vienna
banks jiaid dividends last year varying from 0 to 18% per cent.
Business ou foreign exchanges is increasiug with prices .slightly
THE value of Federal interference to protect comineiThal com-
muuication from violeut aud lawless obstruction is natur¬
ally drawing atteiUiou to the ciuestion of the proper relations
between the government at AVasliiugtou and the railroads. As
a eouseiinence we may expect soon lo have a disi-ussioii which
will not only coiilirm the position already takeu by the Federal
authorities, but which may also open a way to (ransferring to
them the whole supervision of these most necessary channels of
commerce. Riotous strikers and their nnthiukiug sympafhizcrs
are not flic only antagonistic forces from which the railroads
need protection. Granger legislatures aud State courts have
done so much more damage to railroad enterprise than mobs can
ever do by their attacks ou investments iu them that ifc would
be a good thing for the railroads directly and the prosperity of
the country as a whole indirectly, if not only the dutyof kee])iug
open the mai! routes aud iuter-state commercial conununica-
tious, could be iu the keeping of the Federacy, but also the
makiug of the laws necessary for their entire regulation, lu
order to accomplish tbis there need he no thought of their
purchases by the Goverumeut or of the relief of the rail¬
roads from their obligations to contribute toward the rev-
eunes of the States through which they run, but
simply that the terms under which they shall serve
the public aud the Government itself shall be decided
by reference to the only authority which is in reasona¬
ble probability likely to be freest from prejudice for
or against either the railroads or their employes, the States or
the individual shippers. To soaie exteut this is already Un¬
case, foreii;n railroad corporations have found I'elief byai»i>eal
to the Federal courts against unjust demands ot State authori¬
ties, aud it would only need to offer the same refuge (o home
railroad corporalions, and at the same time, of course, enlarge
the regulative powers of tho ceutral authority.
The Cost of Eaih'oad EaoTganiaatioiis,
(CONSIDERING the many gTeat railroad companies Wiiich
-^ rerjuire reorganization the fiuestion of the probahle expeii.se
of returning them to the solvent list is a very pertinent and
iui]iortant one. It is well known that trustees, money-lenders
and lawyers always get fattest from insolvent estates; but if it
was known how fat tliey get from insolvent railroad estates tiie
public, and particularly that partof it which invests its money
iu railroad securities, would receive a .shock quite eijiial tf) nny
that has been caused by the investigation of the Police Depai't-
ment, A Wall street hrui, that should kuow how these (hings
are manatced, commenting on the Atchiseui plau, estimated the
pi'Obable eost of the reorganization at a million and a-half of dol¬
lars. Thisestimateisuotoulyuotan exaggerated oue but amod-
erateoue if the Atchison is to be reorganized on the same bnsisof
cost thatother companieshave been. Besides this, while milroad
companies are being reorganized their properties are always so
expensively managed that any one who expressed surprise at
the increase of operating cost under a receiver wouhl \ir. looked
upon as a greenhorn in railroad aud financial circles. 'J'hat a.
railroad receivership is an unusually lucrative otHce can lie
readily understood when it is remembered that a Pennsylvania
judge last year resigned a life position to take a receivership
before the cpiestion of remuneratiou was settled at all, aud only
recently a Massachusetts <^ourt fixed the honorarium of the
receivers of the New England road for giving some fragments
of their time to looking after the load's affairs at a sum for
which a first-class railroad mau would devote the whole of his
time and energies to the work.
If then the courts, whi<-h are supposed uot ouly to watch over
aud protect the interests of the creditors of a bankrupt coi'pora.-
tion, but also of the debtors, ('. c, the stockholders, as well, are
inclined to take such a liberal view of the extraordinary value
of any services performed for the security-holders, it eaunot be
surprising that the reorgauizers of the insolvent corporations
who are subject to no supervision or control feel licensed to
estimate the value of their own services at a very high rate.
That the reorgauizers are accountable to no one but ihenisclves
may seem extraordinary, but it is a fact nevertheless, and it is
easy to see bow it is so. A reorganization committee, as at;
present formed, usually consists of a voluntary organization
of representatives of trust convpauies and banks who hope to
loau large sums of money at high rates of interest in times
when money is a drug iu the open market at ],
or 2 per cent and to secure to themselves the trust
fees and commissions for the issue of the bonds under the new
mortgages and of the new stock certificates that maybe required.
Sometimes a large holder of bonds, though holding relatively
to the whole issue a small amount, obtains membership on a
committee, and by throwing in his securities to back the com¬
mittee is more th:in recompensed for any loss his holdings ma.\-
sustain by sharing the cununittee's fees and availing liim-
self of the iuside information his position on the C(mimittee
gives to him. The committee undertakes to issue certain new
securities or readjust representations of indebtedness and to
collect and disburse asse.ssments for certain imrposcs, among (he
latter beiug the exiienses of reorganization, Hut for tlie moiR\y
coming iuto their li;nids iu excess of rliat )-e(|uired to jiay
off float ing debt and back interest oi' other tilings Niat
can be deiiuilely known to the outside security holdei'