Savannah morning news. [volume] (Savannah) 1868-1887, 1882-03-30
THE MEMPHIS AND CHARLES:
TON RAILROAD.
Something About the Recent Tum.
BILE in its stock.
Philadelphia Press.

LfsetttActEftsU L 1000
The course of the Memphis and Charles
ton on the stock market has for some
months past been most puzzling to the out
siders in the stock market. To understand
the situation, and the reasons why the stock
of a non-dividend paying road that sold as
high as SO in 1881 could be knocked from
S23s in January to 46 within less than six
weeks, 1t will be necessary to look into the
circumstances OF the struggle for its control
that is not yet entirely at an end.
The road, running through one of the
most fertile and prosperous regions in the
South, from Memphis to Chattanooga a
distance of three hundred and thirty miles,
was. before the war, the cheapest operated
road in the South, having easy grades and
few curves and large local traffic. In June,
1877, its controlling interest being almost
identical with that of the East Tennessee,
Virginia aud Georgia, r 7. Wilson being
President and Charles NJ. McGhee Vice
President and General Manager of both, it
was leased to the latter road for twenty
years for the interest of its debt and ope-
rating expenses, the lessers to receive the
net earnings. This lease was terminal at
six months notice, but in December 1879,
the lessons waived their right, in return for
which the lessee agreed to buy the coupons
on its bonds for three years following, In
case the Memphis and Charleston failed to
earn sum sufficient to meet them.
The East Tennessee, Virginia and Georgia
then operated a road PAL miles long, be-
tween Bristol (where it connects with the
Norfolk and Western for Norfolk and the
Atlantic coast). In October, 1881, III
miles, the Selma, Rome and Dalton was
bought for two millions and a quarter in
bonds, and the Knoxville and Ohio was &C
quired by purchase Of $780, 900 OF its capital
stock of 81, 100000 At the close OF the
year it operated 592 25 miles. The Wilson
party had already lost control, and the road
was then in the control of the Cole syndi-
cate, which was backed by the Newcomer
Walters party, of Baltimore. Last year the
Seney syndicate-the powerful association
of capitalists which also controls the Ohio
Central and Lake Erie and Western, and will
have completed by the 1st of August the
New York, Chicago and St. Louis, between
Buffalo and Chicago, without placing upon
the market dollar of its securities-this
party came into the field and added the
new lines OF their own, bringing the total
mileage up to 902, with 221 more in progress
to be completed by August Of the present
year, when the system will comprise 1923
miles of road. At the election in Novem-
Der last, James r Ogden and o. FL. p.
Rogan, of Knoxville; B. f. Newcomer and
Harry Walters, of Baltimore; r. G. jackson
and Joseph jacques, Of Tennessee, and Jas.
A. Roosevelt and Henry B. Davis, retired,
..
Boice, OF Lima, Ohio; A. N. Denison and
Samuel Thomas, of Columbus; George j.
McGourky, B. &. Mitchell, Nelson Robin
SOB, George l. Seney and Samuel Shethar,
of New York. Cole aud McGhee were re-
elected, the former, it is said, with the IN
Outstanding that he should resign when
asked. Several Of the local direc .ors were
also retained.
The management Of the Cole party, with
Cole as President and McGhee as Vice Pres
dent and General Manager, had been no
more satisfactory to the Memphis and
Charleston than to the new owners of the
East Tennessee, Virginia and Georgia,
which had already displaced President Cole
from the management and appointed Henry
Fink, brother OF the Commissioner, Gene
raj Manager of the entire system. They
secured a majority of the stock through
their purchase; ran the price up to 90 at one
time last summer, and at their annual meet
ing November 10, 1885, made clear sweep
of the old board-Wtlson, Cole, McGhee
and all. The new board (Which was unani-
mously elected) is as follows: v K Ste
venson, Charles j. Swan aud Daniel L.
Evans, Of New York; w. r. Rtson, of
huntsville; William Harrington, J. A
Hayes, Jr., and R d. Frasier, of Memphis;
q. NJ. Fogg, William Duncan, James d
Porter and Jere Baxter, Of Nashville; and
G. H. Phinizy, of Augusta, Ga. The direc-
IOrS elecJeu V n stevenson, HfeBlQe0b, and
Jere. Baxter, Vice President.
Steps were at once taken for a consolid2-
ton with the East Tennessee, Virginia and
Georgia. and plan was agreed upon which
was fully detailed in a recent issue of The
Press 1t meets with the entire approval Of
the latter company, and has already been
agreed to by President Stevenson and the |
board of directors of the Memphis and
Charleston, who, with their friends control |
a majority of the stock. The consent of |
three fourths is necessary, however, under |
the law of the ate, before the schem. can |
be carried through. 1t is anticipated that |
such consent will soon be obtained though |
there is some opposition on the part of the |
minority, who have been ousted As soon |
as the required approval shall have been |
obtained, the East Tennessee, Virginia and |
Georgia will deposit the securi les agreed
upon withlthe Continental National Bank, OF |
New York, which will receive the stock OF
the Memphis and Charleston and make the |
exchange, acting as trustee and accounting |
for the 5000, goo, which must be used for the |
payment of the floating debt.
The interest on-the funded debt of the |
East Tennessee, Virginia and Georgia is |
1915, 154 The gross earnings for the last
six months of 1880 were 81. 125, 800; same
period of 1881, 81 735, 5S0-an increase of |
$6l0 26S, or 54.4 per cent operating ex-
peuses $780, 54 (5l2 per cent J, against
81 0l9, $50 (the cost Of rolling stock being |
double that in 1SS1)-an increase of $37S,- |
096, or SO per cent; net earnings, $23l, 626, |
or 4S 2 per cent. This left funded surplus |
after paying the interest on the funded debt !
of $54S, US out of which will be paid on the |
1st of ADrl per cent. semi annual interest |
on $17, SOC, 600 income skies. 1896, 600.
The last statement of the Memphis and |
Charleston is for the year ending June 30, |
1881. in which the gross earnings were |
81 342, 0S2-an increase OF $338, 81, or 80 9 |
per cent.-and the net earnings $511 ,345, a |
gain of $248, 42l, or almost 100 per cent. |
The interest charge upon its funded debt |
was 1926 $40, leaving surplus of $2l5, S05,
equivalent to per cent upon $5,312, 725
stock.
Under Mr.. Fink's management there has
been a marked improvement of earnings,
due to proper development and local and
through business, and the road has been
operated. Within one month |
the last of the old iron will be taken up,
and then the track will be either steel or
new iron throughout. The last of the new
bridges will also be put IN place, and the
road will be In comparatively first-class
condition. Its directors expect that con-
solidation road will be able this year,
besides paying the interest on it's income
bonds, to earn at least per cent. upon its
per cent. preferred stock. Memphis and
Charleston sold on Saturday at Sc. By the
terms OF the consolidation for every 81, 900
OF Memphis and Charleston stock there are
to be issued 800 East Tennessee, Virginia
and Georgia skies Quoted on the New York
Stock Exchange at $50 asked), worth
1914 50 500 preferred stock CLOSED at
2018 asked), worth SAB so; $500 common
stock (closed at 12I asked) worth $50 so.
Total, $605 so, or the rate of 60% for