Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-06-01

] niDW tOuDinl 10 pay lOI tnc pipieii'u
stock OF the East Tennessee and other pur-
/ poses.
@. It seemed but fair and was acquiesced
in by every member Of the then existing
board and by It's then president that the syn
| dicate which purchased the bonds secured
| by the collateral trust deed should be repre-
/ sented In the Terminal board and its asso-
/ ciate cards by single representative. In.
deed the syndicate claimed the right 10 three
representatives on the Terminal board and
/ the boards Of its associate companies 10 serve
| during the life Of the bond, and II was only
after much negotiation that an agreement for
| one representative was arrived al.
| 7. IL was the distinct understanding al the
| time the loan was made that the collateral
trust mortgage should cover the equity OF
the Terminal Company In the mojority OF the
/ Danville Company, the Hen TO he subsequent
/ 10 that created by the preferred stock trust,
/ and the supplemental mortgage in question
/ was drawn and executed and unanimously
/ approved OF to carry out that intent
5. IL was oi course understood, and that
understanding has been and is being carried
| into effect, that the business Of the western
/ North Carolina Company and Of the whole
| Danvile system woulJ be materially i'm
/ proved by the acquisition OF the East Ten
/ nessee, Virginia and Georgia stock.
| Second. The " after OF the Control Of the
! MojIle and Birmingham Railroad Company.
/ As 10 the Mobile and Birmingham Rail-
road Company Messrs. Thomas and Brice
/ did not sell the Mobile and Birmingham rail.
/ road TO the East TennesSe. Virginia aud
! Georgia Railway Company for any sum
! whatever. The contract by which the East
Tennessee, Virginia and Georgia Company
acquired a controlling interest tn the stock
Of the Mobile and Birmingham Railway
| Company, in consideration OF its guaranty
! Of the first mortgage bonds OF that company,
was before It was made, submitted TO, and
| approved by 1lessrs. Rice, Sully, Lehman,
/ and their associates, directors OF The Ter
minal Company, and in every particular ap-
proved by them. The only warranty for
mentioning the sum OF $4,000 Is that on
/ examination It was Ogreed that that there
! had been $4,000 expended up to that date
/ on the Mobile and Birmingham railroad, and
as a matter Of fact. more than that sum had
been actually expended.
mira. The ifqher Of the CONTEMPLATED
| Extensions Of the E1St Tennessee system.
Asto the contemplated extensions OF the
! East Tennessee system, the only extension
/ bonds winch have been issued 10 TO the
present time have been for the purpose Of
I
! Tennessee with the result OF giving 10 The
| East Tennessee, Virginia and Georgia raj :
way the haul OF several hundred thousand tons
/ Of coal While the extension 10 Jacksonville
| has been under consideration, no steps abso-
| utely committing the company to such eX'
! tension have as yet been made. Vice President
! Grice has never advocated the purchase OF
! the Georgia Midland road by the East Ten
| ressee, Virginia and Georgia Company upon
| the terms ramcd or anything like them.
| The Board Of Directors OF the Terminal
| Company were informed. and have In
| di,iduall7 aud officially bad full knowledge
| OF the making and execution OF the extern
/ sion mortgage, and no protest or objection
was ever made by any one against 1t.
Fourth. The Matter Of The Conversion Of
! the Virpoiq Midland Income Bonds INTO
/ fJred Ch0rged Bond. Guaranteed by the
| Kicbmopd and DGpUile.
The Terminal Company were The owners
| oi 81 .GO3,O 600 o. Virginia Midland income
/ bonds. 70 nuke these AN ayaiiable asset
and To effect a reduction OF per cent. IN the
accumulative interest charge the conversion
/ VA, mide Value was also thereby created for
| the bonds in the treasury OF the Virginia
| Midland Company, rendering them aVallaOie
! in the improvement Of its property. Since
D
pany have more than justine it as surplus
] over fixed cnarscs have earned. II IS true
/ that this conversion was made against the
/ proiest of ir. Sullv, he having steadily
| maintained The principle that accumulatiye
! income charges no matter how high the
rate Of interest az long as the paw
ment could not be summarily enforced
pgainst the company were not seriously TO
/ be REGARDED ss Indebtedness after all.
/ F!fia. The Jfatter Of the FvEdHg Of the
( GeorqI1 Pacific Income Bonds INTO Ftred
/ Caqrqe BOnds.
In this connection we reply: These bonds
/ were funded in order TO enHble The Georgia
| Pacific Railway Company 10 extend il Inc
/ 20 the Mississippi river, which was deemed
/ bv all persons informed on the subject
/ greatly to the interest Of the company. The
/ existing second mortgage was N two paris,
and bv its terms no bonds secured by It
/ could be issued on the compauy's line west
/ of Columbus. II was necessary, thHeiore,
/ TO relirc the existing bonds and replace
them by others which would cover the COM
p,ny's whole railway equally. Moreover The
/ existing second mortgage bonds have a
voting power along with the stock after
I 1890. which from Terminal standpoint IL
/ T. desirable 10 get rid Of. Only one-hali OF
at per cent. per anuum.
,. The assertion that the Georgia Pacific
/ Railway Company barely earned interest on
II. tirst.mortgage bonds is incorrect. The
report OF the company for the year ending
/ September so, 1851, shOged:
| Deduc,ine taxes............s 33.467 60
Interest on hrst-mortga6e
nuD'H 80 =, '''' eS9a ts
Leaving net surplus. slSf,sl6 Z.
/ and this Notwithstanding the road wa,
operated in two unconne;ted divisions ioi
| seven months OF The fiscal year.
The floating debt Of the company. outside
OF its equipment trust bonds, Richmond
/ and Danyiie traffic fund, and temporary
/ loans for the construction OF the " Bessemer
/ branch,1 10 meet which securities were IT,
/ ceiyable, was SS0G32, OF which S3S,ii4 was
! due the Richmond and d nville ana Rich
mond and West Point Company. and against
/ this amount the company held consldeTa'
/ bic number OF lis bonds.
/ 3 The fixed interest on the new . pei
| cent. second.mor,gage bonds amounts 10
about sl5O,O0O per annum as against AZ
accumulAtng interest on the ola bonds OF
!
1. The Terminal Company authorized and
advised the funding Of the second-mortgagC
/ bonds before final action was taken by The
directors OF the Georgia Pacific Railway
| Company.
! 5. some Of the directors OF both companies
were interested in these bonds, but 1t Is be-
/ leyed that a majority OF the directors oi
! both companies had no personal Interest
whatever In the matter other than their IN
terest in Terminal stock and The welfare oi
! the companies.
Sirth. TIE Matter Of The Control OF the Va
rious Propert,es Subordinate TO the Ieip'no
| Company
| The only matter under this head thatreslY
! calls for an answer IS the failure OF The Rich
mond and DanyIlle Company 10 declare The
! dividend referred 10. Now that the
psst.due coupons OF the debenture bonds
! v hicb were then untuuded have been sub
/ stautlaly funded, the wisdom OF the poncy
+ that preyen,ed the declaration OF the diyi
/ dend at that time must surely be approved
by every stockholser.
/ Serenh. The M0hsr Of The Washington
/ Ohio and Western Railroad Company.
This matter has been already fully an
swered IN replying 10 the questions under
trsf head