Evening journal., 1892-02-11
THERE'S MILLIONS IN IT.
The Most Gigantic Coal Road
Deal Ever Consummated.
AND THE READING NOW Is MASTER


Il Absorhs the New Jersey Central, Lehigh
Valley and Delaware, Laciawanna and
Western Railroads and Controls the
Anthracite Coal Markets and Prices.
PHILADELPHIA, Feb. 11-Through the
greatest deal ever made in the history Of
railroading, the Reading Railroad company
will pay a dividend on ts stock this year,
and its net earnings will increase s4,250,0O0
ia the next twelve months
The Reading now controls, by lease Of 900
years, the Lehigh Valley and New Jersey
Central railroads, and on Feb q the Della
ware, Lackawanna and Western win be CON
trolled in the interest Of the Reading The
Reading and its leased lines now represents
$50O,000,000 Of capital and its earnings win
amount TO ss0,00000O per year.
This is the greatest coup ever known in
corporation finance, beside which the Ia
nous South Penn-Beech Creek West Shore
deal Of 1885 pales TO absolute insignifcance
The statement as to the control Of the I.e-
high Valley md New Jersey Central is
made authofifatively At the general Of
foes Of the Reading Railroad company
President Mcleod Is today the king Of rail-
road iinanceia The Reading controls ~
per cent. Of the anthracite coal production
and hereafter it is absolute master OF the
situstion BY this combination the net re-
ceipts for anthracite coal win be at least
twenty-five cents per ton greater than last
year
A stupendous Deni.
The results Of this stupendous deal are 50
far reaching as to be difficult Of compre-
hension. The terms Of the lease with the
Central provides for a guarantee dividend
Of Z per cont. on the stock Of that company,
and in addition the Central is to receive one
half Of It's own net earnings IN excess Of the
amount required for the 2 per cent dividend
until the total dividend reaches 10 per cent.
per annum, the surplus over the 10 per
cent 70 revert TO the Reading. The Central
earned last year l0& per cent. so that the
Reading viii get per cent. on tins lease
from the start.
4 The Lehigh Valley Is guaranteed a diyi-
dend at the rate Of 8 per cent per nnnum
/ until May 81 1902 from that date until
/ Dec ! at the rate of q per cent, and after
the lnst named date the guaranteed divi-
dend Is per cent.
In addition 70 the guaranteed dividend,
and after the latter Is paid the Lehigh
Valley stock Is To receive oue-half of the net
earnings of that road, until the total
dividend shall equal 10 per cent per annum,
after which the surplus goes TO the Reading
IN the same manner.
Aside from Other considerations, To be
mentioned later, aud which will affect the
earnings Of these two companies equally,
: President Mcleod is confident that the
/ Lehigh Valley, after May L when its new
line 70 Buffalo win be completed Is certain,
on its own merits to earn more than the
full amount Of the guarantee, wholly
regardless Of any benefit which its revenue
may derive from the new relations between
the three companies.
To Reyolutionize the old system.
II should be remembered that the Lehigh
Valley ia now paying the Erie Sl go, 900 an
nually for tiackage a sum equivalent to 3
per cent. on its capital stock, and that the
Lehigh Valley makes net gain Of this
amount, which, added 10 the per cent. the
company is now paying, win provide for the
per cent guarantee and leave a surplus Of
per cent. In addition to this the Buffalo
and lake traffic Of all these lines viii be
thrown over the Lehigh Valley
1t is Mr.. McLeod's conviction that the ex-
isting methods Of marketing anthracite are
unnecessarily cumbersome and expensive.
An agreement has been reached which viii
completely revolutionize the old system and
result in enormous savings 20 the compa-
nies Interested in the mining Of coal The
/ plan is to consolidate Offices and reduce the
number Of officers and employees
The joint business Of marketing the pro-
I duction OF these companies win practically
7 be controlled by President McI.eod's cor
7 poration, and win be 80 conducted as to not
I only secure economy, but 70 prevent com
I petition.
It is Mr. McLeod's theory that the indus
tries of Pennsylvania are now paying fair
and reasonable prices for their fuel but
that the rates prevailing at New York,
Boston, Chicago, Canada and other distant
| points should be so equalized that they will
bear proper and just relation 70 the loca-
tion Of those markets with regard to the
source Of supply,
The Acme OF Railroad Financering.
This viii give the Industries of PennsyI-
vania their proper advantage over those Of
distant points, which have their own adj
vantages Of locality, and which now operate
against Pennsylvania because, ia addition
20 such advantages Of location, they have
now those of equal prices for fuel also. This
Is a wrong which win be righted.
1t is estimated that these changes taken
together will yield an increase Of at least
twenty-five cents per ton on all coal handled
by the consolidated Reading system, and
without costing the consumer one penny
more than at present except at such places
as the product Of the mines is now sold at
actual loss.
It is now plain what was in Mr.. McLeod's
mind when he acquired the Poughkeepsie
bridge and the lines tributary thereto, which
throw the Reading and its entire augmented
system into the very heart of New England,
giving it the only all rail route from the
middle and southern states to the east, with
connections with all important New Eng
land roads and enabling it to virtually con-
troll the coal traffic of that entire region.
This coup OF President McLeods is the
greatest in the history of railroad fnan-
ciering and makes the Reading as strong a
corporation as there is in the world