The Republican journal., 1881-09-15
The Refunding Movement.

| apparent stoppage IN the refundlTg of city
| debt My language to the motives and aims of
certain persons has been criticised as too mild
1t is boldly charged that the real aim is not to re
fund the debt at lower rate ofinterest but to re
pudate it altogether that the intention is to
wreck the entire scheme By adopting impracticable
methods and ignoring all proper aids, throw the
blame Of failure on Others if possible, and then
raise the banner of reputation. And it is cnarg-
| ed too, that the next city election is even now
| being worked up to the end that it may be cap
tured on this issue shall not, however. believe
these charges without further proof rep, at the
statement made recently, that success IN the re
| funding movement so important to tax PAYERS of
Beltast-is not achieved because it is the tetermi
nation of those having the matter in charge to
change the management Of the railroad and the
disposal of its rental This unsettles the basis of
| The new loan, embroils citizens in continual
| discussions, throws unnecessary issue into each
| recurring city election and prevents harmony of
action when such harmony and 60 operation are
essential to success Is it not wise then. to take
this question of the distribution of the railroad in
come, "out OF politics 50 that the movement in
the refundins project may 20 on unchecked to
successful results Is il not more important that
reminding, which would reduce our railroad tax
one third, should be effected and speedily AS nos
slb!e, than that the rental Of the railroad sbouh
be disposed Of in different way from the present
| Even 1t the present way is not thought 10y some
to be exactly right, would it not be best to abide
by 1t rather than to wreck the refunding scheme or
even endanger it And when it appears from a
candid examination of our railroad affairs that the
demand that the non preferred stock b placed on
the same footing, as to dividends with the pre-
terred s not right, why should il continually be
brought forward and thrust upon MS! The cjt,
stock is to be put into the hands of trustees as
security for the new loan the definite and assured
disposal OF a certain income from that stock gives
a value to that security and adds iuducrmcn to
the loan. To pledge stock and retain control Of
its income is somewhat anomalous But a settle
ment Of the matter of income can be made now as
well as any time 1t need not be made an open
question for the future As there seems 10 be a
good deal of msconeeption upon the subject
WILL if You will give me space. add further facts
to my former rather brief statement
stated there that preferred and non preferred
stock had been recognized ii the charter 81. in
lhc W "HlNH prov lUcu tdl Il per cent ulN
idend should be paid to the preferred stock before
any should be paid to the non preferred l IN the
subscription books. the towns subscribing for
non preferred and the individuals for preferred
stock lth in the books Of the Co each sub
scriber being charged with preferred or non pre-
terred stock according to the subscriptions and
credited thereon with each assessment when paid .
9TH in the certificates issued If the Id ca OF pre-
ference was thus recognized, Is 1t To be discarded
now closed in my last by saving that the pre-
terred stockholders might perhaps complain that
the directors had not Wv en- them their rights This
may sound strangely to those WHO are charging
that the directors have acted in the interest OF the
preferred stockholders But they shouid rem,m
Der that the directors were primarily selected and
elected by the city, and have been re elected each
wear since,-the preferred stockholders having NO
control of the matter But see what the directors
might have done for the preferred stock
When they took control the railroad had passed
Into the hands Of the Maine Central under lease
for % years at IA rental Of $4,000 This sum gave
Ii per cent valuation of 9G0uOo0 But the
capital actually represented by bodrd and loaliug
debt preferred stock and non preferred stock was
over Sl.ubV.h'b utHtt ~Sb,huU NHulI nor pay
interest on the debt, and per cent dlvldeIds TO
the preferred stock and lerye anything for the
non preferred If the debt had been funded and
the rental applied to paying interest theron and
dividends on the stock the preferred would have
received nearly Z per cent. dividends from the
start On the contrary it received no dividends
for seven years and now received tut per cent
because the rental after pay nE interest on the
debt, has been applied 70 the payment Of The Itin
clpal All tins has been for the benefit of the
non preferred stock And look at tho distribution
of tho rental made now ald see If it does not
favor the non preferred stock The rental of So
900 Is disposed OF substantially as follows $4,000
III payment of interest on st mortgage bonds
SI4 500 in payment Of interest on city note labuut
-, 300 and to provide sinking fund for same.
$4,000 in 4 per cent dividend on preferred stock
and 200 for expenses But this setting aside OF
- 500 for sinking fund reduces the dividend ON
the preferred stock to 1 per cent 50 that the pre-
telrei stockholders claim they are contributing
$1,000 of the - 800, towards a sinking fund which
is solely for the benefit OF the non preferred stock
For there is necessity tor this sinking fund
The mortgage bonds have yet many years {, run
and when they become due, new bonds ut lower
rate OF interest can be readily placed IN their
stead The city note is but 81 900 and deducug
the funds on hand ready to he applied amounting
to SIS 6o0 the real amount is but s 300 THIS can
be paid now, when it becomes duc. by a sale OF
that amount of preferred stock, or by a time loan
As the stock would draw i per cent it might be
best Ia borrow the money at lower rate The
sinking fund being abandoned and the entire
rental used 70 pay interest and dividends there
would be enough lett. after pay ING interest To pay
i per cent. on stock to the amount of $4,000
But the present amount OF preferred stock Is bit
S261 400, that there would be about 81 G00 to he