Savannah morning news. [volume] (Savannah) 1868-1887, 1883-02-03
GOULD'S GRAND LAUGH.
The seney Syndicate Make twenty-five
Million in the Sale to Vanderbilt-How
the Deal Was Worked.
Neqc YORK 1fornino .Tournal.


Nesc York Moyzfn0 journal.
The annual election of officers Of tho
N1ckle Plate Railroad Company at CIeye-
land to-day adds fresh interest to some of
the important and unrevealed facts con-
nected with this company. No one road
has created so much public and private
talk in financial circles. Mr., Gouid's re-
ported desire to get the road as an outlet
to his wabash system; his bid for the
property, the ''hitch'' over the price and
Mr.. Nanderbilt's subsequent purchase of
the controlling interest: the latter gen.
tleman's incautious haste and the fancy
price he paid to secure the road, have be-
come matters of Wall street history.
Inc Morning JOuTnQt was first to point
out the fact of cOl0red gentleman of vast
dimensions secreted in this railroad wood
pile, and the Journals dispatch from
Cleveland created sensation in railroad
circles. The revelation made at that time
had much to do with the resignation of
two directors in the Lake Shore Com.
pany, when Mr.. Vanderbilt attempted to
saddle the new road on the Lake Shore
people.
The best part of the history of the
Nickel Plate transaction remains to be
told, and the Wall street representative
or the Morning Journal has been able,
with much difficulty, to get the real facts
IN the case. The showing is one calcu-
lated to continue the furOre that was made
at the time Mr.. Vanderbilt telegraphed
orders to buy the property Immediately at
the company's own price. Just how much
profit the Nickel Plate directors made in
this transaction has never been revealed.
They are interested parties, and when
asked for the actual figures in the case
very naturally decline to give the infor-
nation.
The original directors and builders of
the Nickel Plate are gentlemen of unoues-
toned ability and high financial standing.
They do not profess to be practical rail
road men, and affirm that they built the
road to sell. Their success in the sale of
1t entities them to the front rank of rail-
road projectors in the United States, and
for successful schemes the Nickel Plate
transaction ''takes the bakery"
The original projectors of the road in
Z. ). Brice, ID. p. Eels, WalstOn Fl.
Brown, C. r. Cummings, f. H.R. Lv-
man, John T. Martin, n. Robinson and
ID. W. Caldwell. The entire length of the
road is 52O miles, running parallel with
the Lake Shore. The actual construc-
ton cost was $4,000 per mile, or about
$7,000,000.
The first move of the company was to
capitalize this road to $95, 900 per mile.
This was effected by the issue of $50 OOO,-
900 of stock, $15,OOO,OOO of a first mort
gage bond, filed in every county of the
State of Ohio, $S,000,000 of construction
bonds, and 81, 4,000,0 of equipment bonds
the construction bonds alone more than
paying the entire cost of the road. The
actual capital advanced by the syndicate
was less than $7,000,0O0. Its proximity
to Lake Shore made it dangerous rival,
and Mr.. Vanderbilt was the golden game
to be "bagged."
Stories were industrionsly circulated
that Mr.. Gould was after the road, and
these stories were carefully dropped into
the ear of William II. We have good rea-
son for believing that Mr.. Gould never
seriously contemplated the buying of the
road, although he went so far as to ask for
a pass over it on one of his Western trims.
Mr.. Vanderbilt made hasty purchase of
the controlling interest, and ordered the
bargain closed without delay. He gave
between seven and eight millions cash for
bare control, paying 81 for the preferred
and IL for the common stock. This pur-
chase money fully Unidentified the Nickel
Plate directors for their original outlay.
The directory disposed of 500 200, 900 of
stock for $15,000,000, or 70 per cent. of a
par value, on the market. Mr.. Vanderbilt
guaranteed the first mortgage bonds of
S15,OOO,OOO at per cent. This mortgage
is still held by the Nickel Plate syndicate
as first lien on the earnings of the road,
and can be fOreclosed in case of a default.
This fifteen millions added to the seven
millions of stock held by the syndicate
represents clean profit to the Seney in
terests of $22,OOO,OO0 divided equally be-
tween the ten members, giving each di-
rector the handsome sum of 81, 100000.
They still hold nearly an equal division
of road property with Mr.. Vanderbilt,
While the latter gentleman has guaran-
teed SIX per cent. interest on the fifteen
millions of the first mortgage bonds.
The road is still untinished; its connec-
tiOns, its rolling stock, its terminl, its
pooling arrangement for traffic, and a
vast amount of difficult labor-all of
which the Seney syndicate dumped into
the lap of Mr., Vanderbilt-scarce half
made up, 1t is not surprising in the light
of these facts that the latter gentleman is
anxious to make the Lake Shore road take
the property off his hands.
1t is not surprising that the well-in-
formed in Wall street laugh every time
the Nickel Plate is mentioned.
Said an old railroad constructor to the
JOHT1ldI representative: HIt was the
slickest job ever worked in Wall street.
Western Union amt marker to it. 1t
Outgenerals Gould and puts Mutual Union
stock-watering way in the shade. The
Elevated Railroad deal, wherein the bogus
Manhattan Company swallowed the New
York and Metropolitan stock, will have to
take back seat when the Nickel Plate
boys come to the 'front.'"
What Mr.. Vanderbilt will do with this
white elephant is the latest question that
is agitating Wall street, while Mr.. Gould
chuckles to himself every time he thinks
of how the son of the Commodore was
taken in,