New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1888-01-30

TO the Edtto- OF The Trfbune
o'h Ion or twelve years ago the writer bought sene
bonds OF the Cedar Falls and Minnesota Railroad Com
pany Up to January I the interest punctually
pad' that then due not and the matter has been
considerably discussed In the daily papers Not find
ing In any OF them clear statement, have sought
the correct Information and knowing that others arc
much Interested. give IT,
In 1866 the Dubuque and Sioux City Railroad was
In good part built. About fifty miles from Dubuque
tho Cedar Fails and Minnesota was commenced, and
fourteen miles bnilt and the balance rapidly pro-
crossing This road north to the Minnesota State
line toward ST. Ranl and intended to reach there.
in september 1868 tho Dubuque and Sioux City leased
ths road the Cedar Falls and Minnesota agreed to
finish the road soon as practicable and to build as
Good road a. the Dubuque and Sioux City. The
Terms or the lease were $500 rental per mile per
annnm the Dubuque and Sioux City agreeing to equip,
mrnsh and operate the road and to pay all taxes and
tho lease rms for forty In the following year.
September 1867 the Illinois Central leased Dubuque
and Sioux City for twenty years. agreeing to pay IS
per cent Of the gross earnings as rental and In the
lease Is the following covenant: "The party of the
second part (Illnols CenfraD shall the lease
made by tho party Vt the part Dubuque and Sioux
City, OF the Cedar Falls and Minnesota Railroad Com
pany copy Of which Is hereto appended marked A.
1t VIII be noticed It does say for term twenty
years, for which had leased the Dubuque and Sioux
City. Tho Illinois Central had by tho lease the
option OF renewing for another term Of twenty years.
The rental under this lease 80 per cent Of the
gross earnings Tho agreement between the Dubuque
and Sioux City and Cedar Falls and Minnesota
signed by Morris X. Jcsup president of the Dubuque
and Sioux City and John 5. Kennedy president of
tho Cedar Falls and Minnesota, and they both state
that the instrument executed by the authority
OF the Board Of Directors and acknowledged the
and deed OF said company" PoOr's Manual gives the
length OF the Dubuque and Sioux city 142 74-fo0
miles and Its cost with equipments. S., gu, liza little
less than 100000 per mile the length of the Cedar
Fails and Minnesota, IS 55-100 miles and its cost
S3,lI3.j 800. about $4,000 per mile The Cedar Falls
and Minnesota issued first mort gage bonds of II 377
OO0 The rental Of $1,000 per mile was certainly
moderate road costing $42. 90 per mile and so
was the ISSUE of the bonds OF these Poor states,
$4,000 have been retired by the sinking fund leaving
S1,2Oi OO outstanding at this date.
Instead OF renewing the lease OF the Dubuque, and
Sioux City they had the right to do, and I'm antcl-
patton of lis termination the illinois Central began 70
buy the stock of the Dubuque and sioux CITY and after
cons siderable difficulty they bought large part Of 1t
at about so Der cent Poor states the amount of stock
Of the Dubuque and Sioux City 81 $50 and then
having elected directors of the Dubuque and Sioux
City to suit their purpose they repudiated the lease Of
the Cedar Falls and Minnesota and to pay the interest
on ts bonds The proceedings are In fact the action
OF the Illinois Central In The newspaper articles the
Dubuque and Sioux City and Illinois Central at first
claimed certain Irregularities I'm the making of tho
lease but later they say The lease Of the Cedar
Falls and Minnesota to tho Dubuque and Sioux City
was a downright swndlo in It's inception" and again,
" the lease was fraud and swinde.' This Is very
known than John S. Kennedy and Morris X Jesup
and reputcd. for their intelligence and integrity
PARTIES one would not expec: TO find endeavOring
TO sot aside lease which they had paid rental
for twenty years and which their company knew all
about when they entered upon 1t.
The parties suffering In this are the holders OF
the Cedar Falls and Minnesota bonds but IL affects all
holders of bonds they cannot but fear that something
they hold. 1t is severe blow to confidence in rail
road bonds.
Netg- York, Jan 90. 1893