Savannah morning news. [volume] (Savannah) 1868-1887, 1886-12-01
CENTRAL'S BIG FUTURE.
THE COMPANY, CONDITION
AND PROSPECTS.

VI 'hO
SAVANNAH, Nov. 29.-Editor Morning
NelgS: The recent advance in the market
value of Central railroad stock has
caused many holders to sell. Some have
been prompted to do this because they
thought the stock had been run up by
speculation to point above its real value
Other holders are beginning to inquire
into the real merits of the property, and,
although reports are annually made,
and made as clear and full as possible,
the officers of the company are frequently
asked for information In regard to it. 1t
has therefore occurred to me to give you
! for publication as brief a statement as
! possible of the condition and prospects of
! the company. will say, however, in
| the outset that can give no information
that cannot be derived from careful
! reading OF the annual reports made 10
the stockholders.
LAYING STEEL RAILS.
Soon after the present administration
| was inau urated, not quite four years
| ago, we were called upon by several
| branch roads that were being cOntem-
! plated and which would act as feeders to
] the main line, for assistance in tue way
of second hand rails and rolling stock.
| There was in the track Of both the Cen
| trail and Southwestern roads, where the
traffic was large and increasing, large
! quantity of iron rails that it was thought
| could last there only two to four years,
| but il placed on branch or light traffic
| roads would last ten to fifteen years. 1t
Was therefore deter mined, as steel rails
We're very low, to take up and dispose OF
these iron rails and replace them with
steel rails.
A BIG OUTLAY.
! Accordingly, IL, 900 tons OF steel rails
were pu chased wi b the determina-
| ton to spread Their cost over three
Years (see fOrty-niGth annual repOrt)
No account, however, was taken
at the time OF what would be re-
ceived for the iron rails to be sold, so that
| IN reality the difference between the cost
| OF the steel rails and what was received
Or the iron rails was almost entirely
paid out OF the earnings of the two years,
1884 and 18S4-5. leaving but little to he
paid in 1856. The rolling stock of the
company was also Ia. gely increased
during those years. This accounts main
| ly for the large reduction in operating ex'
! penses during the past year as compared
| with former years, and must continue to
| operate in future In the same proportion
that The durability OF steel rails compares
! WIN IH6 uuTdDlliLN vi IRON FAllss
| The branch roads referred to, in addi-
ton to proving valuable feeders to the
main lines, are themselves earning and
paying interest on their obligations given
| in payment for their rails and equipment.
THE CAROLINA SYSTEM.
The roads acquired In South Carolina,
| and which have just been completed, " ere
| practically acquired for the cost of super
| structure and rolling stock, the right OF
| way having been secured and the grading
| done by stock subscriptions ia the local.
ties they are intended to serve. ltis con-
| ndently believed these roads will earn
interest on their bonds issued in payment
| for their completion, besides contributing
| considerable business to the Central road
and the Ocean Steau ship Company. The
| last annual report gives the reasons for
extending at this time the Co.
lumbus and Western road, owned
entirely by the Central, to Birmingham,
Ala. This extension is now under con.
tract to reliable and experienced railroad
builders and is to be completed by Sept.
10 next, by which time the connecting
road, the Kansas City, Memphis and Bir-
mingham, is to be finished to Blrming-
| ham.
THE COLUMBUS AND WESTERN.
This extension is to be paid for
from the proceeds of bonds of the Column
| bus and Western road, the interest on
which, it is believed, that road will earn
from it's own business. The sale of these
bonds has already been negotiated at a
premium. 1t is difficult to est-
mate the value of this extension,
Tor in addition to the large local business
which must be exchanged with Kansas
| City, Memphis and Birmingham and all
intermediate points, it makes, in connec-
ton with the Ocean Steamship Company,
The shortest freight mileage route in ex-
istence between Kansas CITY, Memphis.
Birmingham, and other points on the line,
and Boston, New York, Philadelphia and
Baltimore. TO do this additional business
over the Central will require very little
| additional expense, except the actual
operation OF additional trains, though it
| may necessitate additional stea for
| the Ocean Steamship Company, but which
| can be paid for out of the sinking fund OF
that company, it being remembered that
| $100,000 per annum is added to this fund
from the earnings of that company.
HOW THE WORK is DONE.
1t will be observed that the extensions
named, though large, have and Will be
! accomplished without drawing from the
earnings o. the Central or depriving it's
stockholders of dollar of dividends.
| OF the obligations of the Central out
| standing and which mature within the
next six years there are So 000, 900 of 7
! per cent. bonds on the main line, 81 800
| 900 of 8 per cent. bonds of the Western
| railroad of Alabama, in which, by reason
| of the lease OF the Georgia road, the Cen
| iral has tbree-fOurths interest, and
| 81. 900 900 of per cent. bonds of the Ocean
| Steamship Company, besides few per
| cent. bonds of the Mobile and Girard road.
| These bonds can certainly be funded at
! not over per cent, which Will reduce
he fixed charges at least $160,000, or
more than 2 per cent. upon the capital
! stock of the Central.
TO BE REWARDED.
Now then. with the change of gauge
! improved roadbed, increased and im-
proved rolling stock, valuable extensions
and connections obtained for actually
less than cost OF construction, and the
recent decision of the United States
Supreme Court forbidding States, through
commissioners or otherwise, from inter-
fering with rates on Interstate commerce.
it does seem, with the growing prosperity
of the country, that the stockholders OF
the Central VINO have for several years
been deprived oi fair returns upon their
capital, are soon TO be rewarded. This is
foreshadowed in the increased earnings
of last year when larger dividends would
have been paid but for the reasons fully
in ha al