Article: Successful Management of a Bankrupt Railroad - 1894
The Detroit Evening News had an article in regard to the management of the Detroit, Bay City & Alpena railroad that is flattering to the receiver. Of course during the receiver's management his principal outlay was for running expenses. When he assumed control of the road the receiver found it in good running order. The News article is as follows:
There is considerable quiet talk in railroad circles about the good work accomplished by Don M. Dickenson as receiver of the DBC&A railroad.
When Mr. Dickinson took hold of the road last fall it was badly demoralized.
The Farmers' Loan & Trust Co. had foreclosed a big mortgage for non-payment of interest, the pay roll of employees was several months behind, and the general outlook far from encouraging.
Up to that time the road had been principally used for logging operations. Ther log business having come practically to an end there was a great falling off in receipts, and nothing had been done to remedy this state of affairs by finding other business..
It was true that while the equipment was occupied in the log business satisfactory rates probably could not be afforded for miscellaneous freight and passenger traffic, but the falling off of the log business had left a mass of idle rolling stock on the company's hands, while Alpena and other towns which might be supplied by this route very generally adhered to the method of carriage by water navigation which was used prior to the railroad service. Lumber and other manufacturers, produce and outputs for exportation and trade continued to be sent very largely by water, the railroad being utilized only in cases of necessity.;
Mr. Dickinson's first move was to engage good lieutenants. He was fortunate in securing as his general manager J. D. Hawks, formerly chief engineer of the Michigan Central and now general manager of the Citizens' Street Railway Co. Mr. Hawks went over the road and into every branch of it on a hand car. The general offices were removed to 12 Woodward avenue, and put in charge of George M. Crocker as auditor. As the company had no freight agent, a capable man was engaged for that position at $150 a month.
In spite of the depression of business from which the road suffered in common with others. Mr. Dickinson has since paid all the present and delinquent pay roll taxes and the entire floating debt of the company without having to ask the court for power to obtain money or credit. He has also put in many thousands of ties, repaired the bridges, built several miles of new fencing, and equipped the road with a telegraph system instead of the telephone, formally used.
In order to produce these results it was necessary to practice strict economy, both in purchasing and expending, insist on daily balance interest at the banks, withdraw the use of a Wagner parlor coach (running at a daily cost of $10), abandon the practice of issuing passes to shippers, and retrench in various other ways.
At the end of the first six months the road had $50,000 on hand and all expenses paid. This sum has been materially increased since the last statement filed in the United States courts, although $7,000 in state taxes had to be paid in July.
In the language of Auditor Crocker, "We have made it a point to break off something every month and sit on it."
The Farmers' Loan & Trust Co. are supposed to represent Drexel, Morgan & Co. They want the road sold as soon as possible, and after the interest on the bonds has been computed a sale may be ordered this fall. It is needless to say that the road will bring a higher price than anybody expected it would a year ago.