Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1872-10-18

Iuc DOuuS KNOW IL AS bHe LotdU5ltdU, tslItl-
ford and Chambly bonds, although perhaps
properly a Trust debt, are nevertheless Sc
cured by the bonds of the s. S. and c. Rail-
road, amounting t0oyer six hundred thou
sand dollars, and about five hundred thou
sond dollars of the stock of that road.
The bonds and stock of the S. S. and C.
Railroad thus held by the trustees and mana
gers carry in fact the title to that property,
and the notes of the trustees and managers
issued on the strength of the pledge of
these are therefore substantially the First
Mortgage Bonds of the S. S. and {. Rail
road, and having been issued for the specific
purpose of distribution to the bOndhold-
ers, ought not in fairness to be reckOned as
part Of the trust debt against the manage
ment.
These bonds and stocks are, however, en-
tered properly as assets in the statement OF
the Treasurer given below, and it is be-
lieyed that they are good and ample securl-
ty for the notes Of the trustees and mama
gers.
There should be added to the above inter
est account the interest on the Missisquoi
Bonds, 50 called The principal of these
is not trust liability. The bonds are issued
by the Missisquoi Railroad, and secured by
a first mortgage on that road. The road is
about twenty-eight miles in length, extend
ing from ST. Adams to Richford, and runs
through the rich and fertile valley Of the
/ MssisquOi river, the great dairy prOduc-
ing portion of Franklin county. The trus-
tees and managers have leased the road on Il
durable lease, agreeing to pay therefor as
rental forty per cent of the gross receipts OF
the road, and have guaranteed that the forty
per cent. shall be equivalent to the interest
on the $500 600 Of the First Mortgage
Bonds
IF in any year the forty per cent of the
gross receipts shall be insufficient to pay this
interest, then the deficiency advanced by the
i trustees and managers constitutes a debt
against the road, to be paid back out Of the
earnings,
The road is one that can be economically
operated. The country through which it
passes is thickly populated and is an eX-
ceedingly rich one Besides the dairy prod
ucts there are extensive timber districts,
composed principally of the finest spruce
and hemlock which will thus be opened to
market There are also rich mineral dep0s-
its along the line, prominent among which
are iron ore and yellow Ochre, existing. 1t Is
believed, in large quantities and of the
richest quality.
The towns ON the line of the road contrib
uted by way Of town bonds authorized by
act Of the Legislature, to the extent of two
hundred and twenty-four thousand dollars,
the proceeds of which We're expended npon
the road and formed the basis of the first
mortgage bonds. 1t is valuable feeder and
will soon be a remuneratlye one.
The interest on these bonds, therefore,
added to the above interest to be provided
for, makes the total sum annually charge
able upon the the earnings of the road at the
present time seven hundred and sixty thou
sand dollars.
1t will be noticed that in this calculation
the second mortgage bonds are omitted for the
season that in the compromise above referred
to it was the understanding that these bonds
should not be considered until the develop
ment of the road fully justified their being
taken on as an interest bearing security.
Adding these, however, and the total cap
ital chargeable to the Vermont and Canada
and Vermont Central roads proper with their
extensive and valuable properties and busI-
ness relations, stands at Sll 800 900 From
this deducsing the S. S. and c. bonds, which
in fairness should not be reckOned as part
of the Vermont Central capital, 100000,
and we have Sll, 900, 900. From this de-
Quoting again the second mortgage bonds,
and we have Il capital chargeable Mt this
present time to the road for interest and div
idends, 50 500 900.
On this latter basis the average per mile
Of the two rOads-Nerm Central and
Vermont and Canada railroads. l84 miles
is about S5l 900; or, including the second
mortgage at its full face value, the average
per mile would be about S58, 200.
The manag gers submit to any candid mind
whether even on the latter and fairest
basis ofthe computation the road in its high
condition, with its equipment and its valu-
able real estate and wharf property, does
not stand at very low average of cost.
The injustice and untruthfulnesS of the
criticisms which have been 50 freely in.
dulged in recently, is made most glaringly
apparent when it is remembered how mucf
the road has had to contend against to at
tain its present position of power and pro
ductiye capacity.
Forced by the requirements of the char
ter to build two expensive branches to the
:, main line, obliged to ballast almost the
/ entire length of the track Of both roads, t
reconstruct almost the entire rolling stocl
: and equipment, and at the same time t.
more than double both the cars and motive
power, to construct new and enlarged shops
to rebuild almost every bridge on the line
r and at the same time to meet with regular
| ity and prOmptness the dividends and inter
} ests on all the securities, while the onl,
f resources at the command of the manager
5 have been the earnings Of the road and th
= comparatively small amount of loans whicl
| they have been enabled to make when al
5 these are considered the managers do no
= hesitate to say that but few if any roads il
/ the country can show more rapid or NOR
e satisfactory and successful development, no
7 do they believe that any evidence of wan
: of fidelity to their trust can be discovered.
The argument that because the annua
reports do not show large net over th
E operating expenses. that therefore it is to b.
: accepted as proof of mismanagement, an(
! that the road does not and cannot earn it
l dividends and interest, is not altogethe
sound.
The construction account was closed OF
their assuming the management, and al
o expenditures were charged to operating ex
q penses. The reports have, therefore, al
Q ways shown the worst against the mnnag
o ers.
o Nevertheless the fact remains that as eacl
= half year revolyed, the dividends and inter
Q est on all the securities chargeable upon tn
trust have been regularly paid. The addi
tional fact also remains that each year ha
exhibited a steady improvement in the con
dition and value Of the property. Eacl
year has exhibited a growth of its business
% an increase of its earnings, and large aug
:, mentation of tonnage; while the other ant
u not less important fact remains that tn
n only source of supply from which to Great
all this was simply the earnings OF the road
Q and the money borrowed and funded from
y y time to time How small portion of th
3 amount expended in developing this proper
% ty was derived from added capital will full
= appear from the report of the treasure
y herewith Suhmittad-whiIp on the Othe