Burlington Strike, 1888; Labor unions -- United States; Railroads -- United States -- Employees
In June the following statement appeared in the Chicago _Herald_: "The
Burlington Company is having a hard time to make both ends meet. Its
statement of net earnings for the month of May, which came to light
yesterday, showed a decrease of $803,000, and for the first five months
of 1888 the loss compared with the corresponding period last year
reaches the astounding total of $4,194,172. Never in the history of
Western railroads has such a disastrous record been made by a big
railway corporation in so short a time. Less than a year ago the
Burlington Company was reported to be the strongest corporation of its
kind in the country. It paid the highest rate of dividends, and its
securities commanded larger prices than any similar paper on the New
York Stock Exchange. Since the beginning of 1888 its dividend rate has
been reduced from eight to four per cent, and even the four per cent has
not been earned by many thousand dollars. The interest requirements,
which come ahead of the stock, alone amount to, approximately,
$6,000,000 per year, or at the rate of $500,000 per month. The net
earnings for five months, however, are only a little over $1,000,000, or
less than half of what would be required to pay current interest
charges. In face of this showing, however, the company has, since the
beginning of 1888, paid three per cent in dividends on $77,000,000
stock. This required an expenditure of nearly $2,400,000. If this
$2,400,000 be deducted from the net earnings of the company for the
first five months of the year an actual deficit of nearly $1,400,000 is
left, without allowing anything whatever for interest on bonds, which
are always a prior lien. Deducting $2,500,000 interest charges, which
somebody must pay, and the deficit is swelled to nearly $4,000,000. To
put the matter plainly, the Burlington Company lacks $4,000,000 of being
able to pay its debts out of its current earnings. It had a a surplus at
the end of last year of $1,000,000, but this has been wiped out, and a
floating indebtness of approximately $3,000,000 now stares the
Burlington management in the face. It is currently rumored that the
company has been trying to negotiate a loan of $2,000,000 in Chicago to
help it out of its present difficulties, but these negotiations have
fallen through, and it is understood that an effort will be made to
raise the money in the East. The depreciation in value of the
$77,000,000 stock, of at least one-third, is another serious loss, which
will probably never be retrieved."
THE DYNAMITE PLOT.
Public-domain text, read in full here on John Shaqi.
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