The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1855-09-17


Lease Of Peoria aud B. v. road. 12SoSo
which is an increase over The amount originally esti
mated for net earnings Of $685., lel.
This will give the stockholders two semi-annual
dividends Of u per cent each, and leave in the
treasury s1S2,500 for contingencies. The contin-
gences Of a railroad company are numerous, and ut
times important Every railroad company, new or
old should make reservation for depreciation, for
accidents, such collisions, brcakages, &C., not
usually provided for in current operating expenses.
There are but three railroad companies in the coun-
try, that we know Of, which can do this. and that
fact gives greater valne to their stock. We alude
to the Galena and Chicago, the Michigan Southern,
and the Chicago and Rock Island. These three
companies have large surplus, after paying large
dividends and their managers know well the impor.
lance Of retaining sufficient to meet any emergency
In the last report Of the treasurer Of the Chicago
and Rock Island Railroad Company we find the fol
lowing, which is applicable to nearly all the rail
roads of the country. The only exceptions we know
or We have named =
When road in successful operation, the claims
of the stockholders for dividend Of all the earnings
yond running expenses very strong and often the
desire prodiabe operations by Initiating the stock has
stl stronger influence in producing large dividends.
As the stock becomes desirable every regaison for
increased expenditure Is promptly met by new issue Of
stock TIE result H. thst Al the end Of FIVE years
the capital which dividends are to be declared
Is found 70 be double what understood 10 be al the
time the road purported 70 be finished And the stock
holders after nxuriaug for years ten, twelve and
fifteen per cent dividends with occasional div
dend stock aye informed that dividend viii be paid
them provided they will take the amount cut Of
issue Of stock or bonds at par.
A proper reservation from the net income after
paying dividends, TO meet any contingency prevents
that rapid increase In construction account which we
see in railroads The true system Is TO deduct from
the net earnings certain per cent TO retain in the
treasury, and make dividends out Of the balance,
whatever II mey be. II il will give but two or three
per cent semiannually the stockholders will have
guaranty that there VIII be no delinquency
that il will lie permanent, and can be safely
calculated upon. In many Of our rail.
road companies the stockholders cannot tell from
one six months to another whether they will get
dividend or not. Something is likely 10 occur any
day on any railroad that will call for heavy ex.
pendituIes, ard where every cent OF the net earn
ings, and more too, are divided annually In diy.
derds there ia no alternative but to either increase
the debt or cease paying dividends to stock
holders. There is almost much virtue Ia
the fact that at the regular dividend day Ger
tain rate will lie forthcoming IS in the extent
Of the per cent paid 1t is the safety and permanent
productiyeness Of the Investment capitalists look to
more than anything else, and when railroad stocks
become so they win command premiums a. high a.
any other class Of securities.
Whoever examines the respective merits Of the
various securities Of the Harlem Railroad Company
cannot fail TO perceive that their present market
prices not correct tests Of their comparative va
lue. The common stock Is now selling at about p
per cent, and the preferred stock al about 90 per
cent. The former pays dividend, and is not likely
20 pay any for an indefinite period Of time: the lat
ter bears interest al per cent which Is still due for
the part year and goes TO the purchaser. The Grst
mortgage seven per cent bonds amount TO $1,000
coo, and they are secured by first lien only 80
miles Of the road though they purport on their face
to cover The entire line from New York 10 Chatham
-Four Corner; they sell at % per cent. Tie second
mort gage bonds Issued and 10 be issued, amount TO
81 900 600 They are o second len upon the same
tortion OF the road which i covered by the frat
mortgage, and selI at 70 per cent; bu. their value
might he largely increased by providing a
suitable sinking fund, 70 he raised by sales
II the company's superaucas real estate
Tic only remaining securities o. the Harlem Rail
read Company are abou. 100000 Of Albany Fxten
sion bonds being the balance of The 100000
origii ally issued, all the rest having been converted
by the holders into stock and thus paid. These out
stardng bonds are the first and only lien o. aboat
Gfythree niles Of the road, costing $4,000 ,OO0 and
upfn all its earnings a. well as on certain portion
o. the earnings Of the other part Of the road, and
are in point or security, decide NY superior 70 the
first and second mortgage bonds and preferred
sto,k and are the beat aud safest obligations which
the Harlem Railroad Company has Issued or can
issue under It's corporate seal yet they command 10
\ the market but 65 Per cent. " has not been the
practice Of the Harlem Railroad Company y cancel
the Albany certificates when returned TO them on
being paid by conversion into stock and In conse.
\ qucnce Of this shameful negligence. number we're
| frauduentIy reissucd by Robert Schuyler, bit we