The New York herald. [volume] (New York [N.Y.]) 1840-1920, 1878-04-11
BALTIMORE AND OHIO.
STOCK DIVIDEND INSTEAD OF cAsH-PREsI-
DENT GAERETT's EXPLANATION or TIE SUB
sIrrurIoN-A CONSERVATIVE POLICY TO

s1rurIoN-A CONSERVATIVE POLICY TO
REJOICE DEBr
tBY TELEGRAPH TO THE HERALD
BALTIMORE Nd, April 10. 1878.
The action OF tho Board OF Directors OF tho Bati-
moro and Ohio Railroad to-day 10 substituting stock
for the usual cash dividend has created considerable
surprise, and the action o the board was tho subject
OF comment among bankers and business men gen
orally Tho board ratified the setemen Of the state
debt according to tho action Of the Legislature
by consenting TO the payment OF the sum named 10
tue act 1886, 600
Tho Finance Committc, which has had under con-
sideraton The subject OF tho DIVIDEND reported the ol-
lowing resolution, which was unanimously adopted:-
.ns espt. osl o. The main sss 70, the nan year winch
pany ON and after the 18th ~ May proximo
PRESIDENT oARRErT's EXPLANATION
In explanation of the resolution, connection with
tho recommendation OF tho Finance Committee 10
declare dividend in stock, President Garrett rc-
marked that although during tho present admnistra-
ton, which had continued for twenty years, the
dividends had been uniformly madc IN cash,
even during the great war, at six, eight.
the form proposed by the COMMITTEES was not at ali
novel IN the history OF the Baltimore OHIO Com
company needed money, ratncr Than press
sales OF its bonds and securities 1t adopted
Of its earnings by borrowing the sum from the stock
holders and issuing therefor Its stock. large
amount Of the cost OF tho road between Cumberland
and the Ohio River was supplied under this system.
In order TO aid tho Pittsburg and Conneisvle,
tho Marietta and Cincinnati. the Virginia Midland,
and to construct the Chicago, tho Baltimore short
line, tho Cincinnati ana Baltimore roads and other
enterprises associated with It's interests and develop
ment, the Baltimore and ohio Company created a
floating which Is tho policy OF tho company to
liquidatc rapidly.
INTEREST IN CONNECTING LINES
Tha ~ iaru m N Of 4 q n
securities OF Its connecting lines. some OF which u
will DO desirable mold Tor tho purpose vt
ing interest and influence IN regard TO the
policies and cooperative relations OF those cOmpa.
Mes But large amounts OF the bonds OF those
sufficiently advantageous rates can DO obtained for
them. The company has pursued so conservative
policy that has heretofore paid from It's net
ings through the action OF It's sinking funds, aud
by payments III cash from It's net earnings
Sill G5l.219 81 OF mortgage Indebtedness; and the
annual earnings upon the present Investments in lis
sinking funds ana appropriations for the payment Of
its mortgage indebtedness amount to $685., 900
nually.
PAYMENT DEBT.
In pursuance OF this conservative policy tho COM
mitteo has recommended that portion OF the earn
ings r0aliZed within The last SIX monthsvtZ., Jour
per cent b,ng 1925 76S be used Tor the payment Of
the floating debt and that stock be ued therefor
1t will be noted that this dividend VIII DO payable
the common stock OF tho company. THIS sum Is thus
added TO the capital which interest Will DO paid
but only such dividends as may be declared from tho
net earnings at the discretion Of the directors from
time to time the capital stock. While the floating
dcbt has already been materially decreased yet this
action will insure It's rapid reduction
After the Presidents remarks tho resolution OF the
Committee Of Finance Tor The declaration OF the dv-
dend was unanimously adopted. tho earnings for
$l137,4l3 %, being $44,4l9 95 moro than for the
Same month Of the preceding year.