The Portland daily press., 1883-06-05
Proposed Lease Of Eastern Railroad wit
Tho Rna+n,, e. Ahairn


An article published in your issue of May
nth, regarding the proposed lease of the Eas-
tern to the Boston & Maine Railroad, did an
injustice TO the latter and conveyed wrong
impression in regard to the situation of the
Maine Central. The proposed lease is in one
sense protective measure for the benefit of all
three of the above named roads, as the rivalry
that exists between the Boston u Maine and
Eastern roads has the tendency to cause one or
tho other to cnt rates that additional passenger
or fieight traffic may be secured. The day
such movement Is inaugurated the weaker Of
the TWO roads will go to the wall and the Maine
Central, which has become dividend paying
road will be deprived Of a large portion OF the
profit II now derives on tho through business
over these roads. The amount thus received Is
no inconsderahle sum and may be roughly es-
timated at one dollar for each through regular
ticket sold, and about the same amount for
each ton OF freight To illustrate For each
regular ticket from Woodford's Corner TO Bos-
ton tho Maine Central receives 1910 The
local fare from Woodford's Corner to Portland
is 10 cents. and 1t pays the Boston ~ Maine or
Eastern $l,50, making total of $780, which
leaves n net profit to the Maine Central OF
Sl.50 for which IL renders no service. In the
case OF Lewiston, the rate from that place IL
a
between Portland and Boston $780, not profit
to tho Maine Central, S1.25. The profit on
through tickets to the Maine Central from
Brunswick is 1925: from Bath, Augusta, Wat
erville Pennington, Skowhegan, Belfast and
Bangor, $1.C3 Where will DO the dividends
OF the Maine Central II this lease falls and the
Eastern and Boston q Maine go into sharp
competition, making the rates to the public
the same as to the Maine Central? Ii may DO
said that under this state OF affairs the public
ha lint mot ~ In fha inug
run, These rates would cripple all thrse roads
and poorer accommodations less service and
less safety appliances would be the result, 10
say nothing of loss OF revenue TO the holders Of
the securities OF these three roads, held largely
by the savings banks and in trust funds for
widows and orphans. The tendency of two
such rival roads TO quarrel or cut through rates
and the harmony that comes from o oonsoida-
ton is we'll illustrated in the history OF the
Maine Central aud the old Portland & Kenne-
bee Railroads. The harmony now enjoyed,
the good service rendered the public, could
never have been secured otherwise than BY
consolidation, and no one to-day familiar with
the railroad history of this State will deny the
fact.
Ii consolidation thus works we'll in Maine.
why will it not between Portland and Boston?
The Boston a. Maine Railroad is no enemy 10
Maine s interests. The Maine Central is the
great eastern feeder for the two roads now run
ming between Boston and Portland, and the
this road, the better il will be for the Boston
and Maine, whether the lease is contaminated
or not. The Boston and Maine can make no
changes in the Maine Central road If the lease
Is carried into effect, for as you say the ma
jority OF its directors must be Maine men. and
in addition to this no change can be made In
the contract now existing between the Maine
Central and the Boston and Maine, Except
with the assent of the directors of the Boston
q Maine, Eastern and Maine Central, and OF
81
given at meeting OF the stockholders special
~ called for the purpose" When such pse-
ponderance as that shall exist il will be time
evidently to effect a change, and till then the
Maine Central will remain as il is now under
its present management. It will have the same
opportunity for and the same interest In the
DEVELOPMENT of the state that it has had in the
past. 1t can make whatever contracts and
leases it may choose with connecting roads,
and the Boston q Maine cannot say word. II
will In fact retain its identity as fully as ii
does now with the Eastern railroad.
The objection TO the lease ON the ground
that the Boston and Maine is a foreign corpor-
alton and great monopoly is novel one, as
this road owns all tae mileage it operates In
Maine, while the Eastern, on the other hand.
has not a dollar invested in railroad property
in Maine-except in connection with It's lease
Of the Portland, Saco and Portsmouth railroad
and IN the stock OF the Maine Central-tO
give IL the control of that road. Moreover,
tho stoCA Oh Tue East6En 49, or mas TIL very re-
Gently, been largely held by the Baripgs OF
London, whose interests have been cared for
by Mr.. Bacon. now one of the directors of the
Maine Central. The amount of Boston and
Maine stock held in this State is double that
OF the Portland, Saco and Portsmouth, so that
the charge that foreign corporation is going
TO control the railroads of Maine, any more
than at present, fails of snbstantiation. You
also say that "by the terms of the proposed
lease. before the Eastern or Maine Central can
participate in any of the net earnings, by
means OF which they can declare dividends,
no matter how much These roads may earn, a
dividend OF nine per cent. must be declared
and paid TO the stockholders OF the Boston and
Maine before one cent can be paid on the
stock OF the Maine Central This an error SO
far as the Maine Central is concerned. The
Maine Central 10 not party to the lease, aud
the Boston and Maine has no more to do with
the revenue of the Maine Central than the
state OF Massachusetts has to do with the rev.
enues Of the State of Maine.
We have thus far considered the relations OF
the Boston and Maine with hardly reference
to what benefits will accrue to the Eastern
under the terms of the lease. At present the
road is compelled by special legislation to
pay certain percentage upon its bonds, and
il any surplus is left to set aside a certain
amount as a sinking fund. The earnings OF
the road and the dividands il is now receiving
from the Maine Central have enabled il 10
meet the interest upon its bonds, but nothing
mas renamed TOT the SINKING fuud.
The present year the interest ON the bonds
of the Eastern road is increased from Al per
cent. to per cent, requiring something over
S200,000 additional OF net revenue. III on ac-
coant of business depression or any serious dis
aster the Eastern should fail to earn enough
TO meet It's interest the deficiency must be
made up by the Boston and Maine. This Is a
point worth considering as the stockholders OF
the Eastern are as much a part OF the body
polite whose interests you have chosen to de-
iend as the passengers who travel over the
road. They have had the fortune, or the mis-
fortune, to invest their savings in railroad
stocks that have at times had fugitive value,
while the travelling public, as general thing,
derive their revenues from more satisfactory
investments. A ride over such portions OF
the Boston and Maine and Eastern Up. s.
x p } roads as lie in this state will convince
any one that the location OF the former is best
calculated, 10 several towns and cities, TO serve
the wants Of the public, and the tendency
therefore, Is to patronize that road. To accom-
modate this patronage and to secure greater
safety TO life and property, double track Ii
being laid between Portland aud Boston. I'm
der the terms of the proposed lease such iu-
creased patronage can make no difference TO
the Eastern as the legislature Of this state has
provided that "no railroad having established
its business shall cease to run i,s
trains and operate its roads," and the railroad
commissioners may require the erection and
maintenance OF passenger and freight stations
on any railroad wherever they deem that pub
lie convenience and necessity require them
1t will thus be seen that no material injury
can be done to the rights OF the public along
the route OF the Eastern railroad, and the fol
filment OF all present obligations of that road
is provided for in the terms Of the lease.
A few words more OF explanation and am
done. First-The injunction. The hearing
upon the bill In equity filed in the Supreme
court by Mr.. Willard p Phillips to restrain
the execution OF the lease has been denied. as
the court has decided that it cannot take &C.
ton upon matter that has not been consum-
mated
Second--The Maine Central stock. The
per cent. bonds Of tho Maine Central we're
never a drug on the market at 30 cents. No
sooner were these bonds issued than the whole
amount was taken by the directors OF that road
individually at sd cents and no one else could
buy one dollars worth without paying pre-
MUM for them The payment of dividends
upon the stockgof this road will not be affected
by the leuse for the reasons stated above, and
no reference whatever TO the Maine Central
dividends is made in the terms of the lease.
In closing / will say that this lease affects, to
q certain extent, the interests OF three states,
but Names the least OF all. In considering
whether its contamination is in the interest OF
public policy broad view should be taken.
The greatest good to the greatest number
should be our watchword The success
of business house depends upon Its
ability and willingness TO meet the
public demands. Tho situation of these
three railroads whose interests we have been
considering Is such that the pursuance of any
ttnn tRnla NIL Or. In