Daily globe. [volume] (St. Paul, Minn.) 1878-1884, 1879-09-24
TIE st. Paul, Minneapolis d Mantt0ba
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TIE st. Paul, Minneapolis d Manitoba
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From the Montreal Gazette.
This is the present title of the railway,
whose acquisition by Messrs. Geo. Stephen,
D. A. Smith, and two other gentlemen of
Canadian birth, has excited so much Gu
riosity among the general public, and SO
much interest among persons concerned in
the fortunes of the Bank of Montreal. It
may be proper, on this account, to give
some little account of it and its recent for
tunes. 70 begin then, the road consists of
two branches, united however at both ends.
What we may call the main or more north
erly branch begins at St. Paul on the Mis-
slsslppi river, runs thence along the river
IN a northwesterly direction to st. Cloud,
and then diverging to the westward
for time, gradually runs up
toward the north, and finally strikes the Red
river at place called st. Vincent, Just on
the border of the Canadian territory. The
southern branch leaves that what we have
called the main line at Minneapolis and
lakes direction nearly due west for about
half its distance. Thence it bends up again
to the north and unites with the main line at
place called GAINESVILLE. The entire sys-
tenn will make length of go miles-not a
very uncomfortable property to merit the
title bestowed upon it by the London Times
"of an obscure Canadian railway" which,
besides, has not one inch of its track on
Canadian soil. The original promoters of
the various parts of this system of roads re-
ceived very great land grants as en-
encouragement for its construction; but,
after borrowing large SIMS of money on
bonds, they found it impossible to complete
the undertaking, and in March of the year
1878 suits for foreclosure of all the property
had been undertaken on behalf of commit
tee of Dutch capitalists, who were the hold
ers of these securities. It was then that the
Canadian syndicate, under whom the owner
ship of the road had been
recognized, stepped in and Of
fered to purchase the interest OF the
mortgages. The association consisted of
Messrs. George Stephen, D. A. Smith, N. w.
Kittson and Jas. j. Hill, and we are author
lied to say that no other person had any
interest whatever, direct or indirect, in the
enterprise. Considering their nationality,
the fact that the road is entirely American,
and the vast property which has virtually
come under the control of these gentlemen,
the operation may be not improperly desig-
mated as the romance of railroad financing.
From copy of the original agreement for
the sale which is now before US, We learn
that the purchase consisted of bonds to the
amount of $4,000, 900, owned at that time
by Messrs. Chenet & Weetjen, Kirkhoven,
and other capitalists of Amsterdam. These
we're bought at prices ranging from eleven
to seventy-fve cents per dollar on their par
value. This covered all the property held by
these mortgages, including the enormous
land grant. The conditions were that the
foreclosure suits should be prosecuted with
all possible vigor, and that payment should
be made within six months after final judg-
ment in the last of them. The purchasers
were also to complete the roads by means of
q newly organized company. In the mean
time, the bonds we're deposited with trustees
for the benefit of all concerned, and the pur-
chaser paid into the hands of the same trus-
tees sum of money on account, which was
to be forfeited if they did not fulfil their en-
gagement. It was, however, further agreed
that, as in pursuit of these objects the buy
era contemplated the organization of new
company, the sellers might at their election re-
ceive, in lieu of cash, first mortgage bonds and
preferential shares of the company thus to
be formed. The foreclosure having been
accomplished, and the company organized
under the name of the ST. Paul, Minneapolis
& Manitoba Railway company, new bonds to
the amount of So 100000, stipulated for
in the agreement with the Dutch ommittee,
were issued and successfully negotiated in
New York. A portion was reserved for dis
tribution among the holders of the original
St. Paul & Pacific bonds, who preferred to
accept payment in that manner, and the pro-
ceeds of the others met the cash payments.
It will be seen from this statement that the
means by which the property came into the
possession of the associates did not necessa-
rily require the employment of very large
cash funds. In fact, We believe that there
was no necessity for very extensive loans for
its acquisition. The purchasers raised what
money was wanted from various sources, one
of these being the Bank of Montreal. We
are assured, however, that the loans from the
latter institution were neither unusual in
character nor amount; that they were made
in the ordinary way of business; that they
we're largely covered by securities, independ-
ent of the railway; we're profitable to the
bank, and promptly discharged at maturity.