Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1892-01-24
BLANKET MORTGAGE.
CHESAPEAKE AND OHIO's SCHEME
TO INCREASE FACILITIES.
eI3, 600, 900 for Stock Adjustment, and
$4,000, 900 tor Improvements, &C.

The details Of the new blanket mortgage.
which will be issued by the Chesapeake
and Ohio railroad were made public yes
terday in circular issued by President III.
4. Ingalls, TO the stockholders, says the
New York Sun. The main purpose is to
make adequate provision for increasing the
facilities of the company for handling Its
rapidly increasing business. Here are the
main points of the statement;
1T Is now about three years since the
present management took charge of your
property, and during that time the deyel-
opment OF business has more than equalled
expectations. This can best be shown 10y
the following figures taken from the last
annual report: Gross earnings for the year
ending June 30, 1889, 1920, 900; for the
next year, S7,l61.000 and for last year,
S.127, 900.
This development has been brought
about by the use of bonds which were
provided at the time Of the recognition,
and TO some extent by what might be
generally considered large increase IN
the percentage of operating expenses.
Your Board of Directors are confident
that il the continuation of the present
policy OF enlargement OF facilities can be
secured by adequate financial provision
even more favorable results can be shown
in the future. The possibilities OF extend
ing the business of the company are prac-
tically unlimited. The question TO be met
is how to make such adequate provision
in wav that shall also deal Justly with
the equities Of the preferred stock.
The requirements of the company
can only be met by using what 1t earns
or by mortgage taking precedence OF
preferred stock. Under these circum-
stances your board has not hesitated to
adopt and recommend for your approval
the following scheme, WHICH provides tor
an equitable adjustment with the pre-
ferred stockholders, as well as Tor the fu-
ture needs of the company;
ut is proposed to create new general
mortgage on all the property of tie CON-
pany (Which will be also frst lien on
property hereafter acquired by use OF the
proposed bonds. so far as practlcaole). 70
secure bonds for the amount OF $4,000 900,
and bearing ~ per cent. interest, ooth
principal and interest payable in gold CON
of the United States of the present stan.
dard weight and fineness, the principal
payable March !, 1892. and interest on the
LIST OF March and September IN each year;
"Of this amount about S33.OOO,OOO VIII
be reserved to pay off bonds issued or to
be issued under all existing mortgages on
the property and for the equipment notes,
EXCEPT the bonds on the Richmond and
Allegheny division, which run until 1881
and bear not over per cent. interest
"Of the remainder about S13,OO0,000, or
such part as may be necessary, will be
used in the adjustment with the flrst and
second stock holders. and about S24.OOO,OOO
will be available for use under proper re-
strictons for improvements, additions TO,
and enlargement of the companys system,
recently made and as may hereafter be ne
I'm addition TO the fixed amount Of the
mortgage, provision will be made In 1t for
the issue of additional bonds at rate
not exceeding an average OF S25,OC0 a
mile. for the purpose OF mountaineering
the line of the company, as may DO
necessary from time TO time. Of the bonds
which are reserved for improvements,
il is proposed to sell $4,000, 600 at once for
improvements recently made or about to
be undertaken. They Will be offered to
the common stockholders at s. per cent.
and accrued interest as soon as they are
ready for delivery"
The first preferred stockholders get two
thirds in bonds and q third IN common
stock; the second preferred stockholders
get q third in bonds and two thirds IN
stock. The issue of common stock Will
be limited to $15.OO0,0OO. A syndi-
cate has been formed to purchase
any bonds not taken by the stockholders.
The proceeds of these bonds will provide
for all expenditures at present required on
construction account, and leave the COM
pany free from floating debt.