New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-02-11
PRICE THREE CENTS.
TWO COAL LINES LEASED.
TILE REMARKABLE ADVANCE OF THESE
STOCKS EXPLAINED.
PHILADELPHIA AND READING SECURES CONTROL
OF THE NEwJERSEY CENTRAL AND
THE LEHICH VALLEY.

THE LEHCH VALLEY.
1t was officially announced yesterday that the
Philadelphia and Reading Railroad had secured
control of the Central Railroad of Ncw-Jerscy and
the Lchieh Valley Railroad The secret of the
enormous transactions in the stocks of the anthra-
cite coalproduction companies and their remarks
able advance in price in the last ten days is now
explained. The combination is one Of the most
inportSnt deals that Wall Street has known in
some time. Ii brings under one control fully
- per cent of the competitive anthracite coal
traffic of Pennsylvania and promises TO assure
management of The coal trade which will return
millions of new profit to the companies engaged in
mining and hauling coal. Those who are inter-
ested in the new combination Indignantly rcfute
the idea that it means any trust scheme or VIII
| result in any oppression of the consumer. IL IL
claimed that the benefits to be derived from 10
will flow from economies in operations and from
| the abandonment of ratc-cutting practices which
have demOralizcd the coal trade in the past.
The compact was completed in Philadelphii
yesterday, where the officials of the three conn
panies concerned had been in conference. The
terms in general were given out in this city by
| DreNel, Morgan < Co. The Reading acquires by
| lease or a similar arrangement control of tho
Lchigh Valley, and of the Central Of NeW-Jcrsey.
The Reading guarantees the stock OF the Lehi2h
| Valley dividends at the rate of per cent per
annum up to July 1. 1892, a dividend of 4 per
cent for the next year, and annual dividends e
| per cent per annnm thereafter. All profits III
excess Of 7 per cent are TO he equally DIVIDED
between Reading and Ehigh Valley until tie
latter earns 10 per cent, when the surplus is to
| 20 TO the Reading. The Lckgh valley now pays
dividends at the rate of ) per cent, and In recent
years has paid as high as s per cent From 1871
tI,. paF9
In 1876 it paid per cent: in 1877, - in
1873 1879 and 1850, 4 in 1891, ) IL; in 1882!
6 l.? in 1888 and 1854. 3 in 1885. 6 in 1856,
| in 1887, l-2. ard in 1858 and since then at the
rate of per cent year
The Reading agrees by the agreement IN
! pay the Central of New-Jersey per cent year
and all surplus earnings above that figure 10
| he evenly divided between the lessor and lessee.
| The Jersey Central has paid since 1ss9 the fol-
| lowing dividends: In 1883. IL per cent:
1884; IL in 1889, and since then, per cent
per annum.
| Looked at solely from the railroad point ~
! view, the coalition will bring under one control
nearly 5000 miles of railway. The Central II
New-Jersey will furnish about 700 miles. and tho
, other two companies own or control between from
! 900 to 500 miles Of road. The effect on the
coal trade, it may readily be seen, will be trc-
ment threequarters of the competitive traffic, and
thereby reduces the chances of rate-cut,ng OF
quarrelIing. Wellinformed men in the coal
| trade say that no one appreciates the terrific
/ extent TO which cutting of the schedule
prices of coal has gone. The consumers have
received little benefit from this quiet war
but the middeman has derived great profits. which
the companies now propose to take 10 themselves
j. PierpOnt Morgan. of DrcXel Morgan & Co.. said
yesterday that it was within moderate limits TO es-
timate that the union of the three roads would
add from S3,000,000 to $4,000. 900 n year to tho
earnings of the Reading Company. The stock mar
ket reflected the inside knowledge of the CONSUME
nation of the deal. The total transactions
amounted to more than ~. 600 shares. to which
Reading stock contributed over 100000 shares.
| The opening price 80 j-S and there was a
wild advance to 50 3-saj5 3-S There also were
enormous transactions in the Reading bonds at adj
vancing figures. in spite of heavy selling credited
to foreign account. The stock of the Erie road
also WIS strengthened by consideration of its po.
,ition as coal-carrying road, and New-York and
New-Engand advanced sharply because of the
cloSc relations whicE it expects 10 have with tn,
| Reading through connections with the Poughkecp-
sic Bridge. recently acquired in the interest Of
Reading.
There were many rumors before the official an.
nOuncemcnt was made of Readings acquisitions
that the Nanderbilts were parties to the deal.
Chaunccy VI. Depew. president of the New-lork
Central gave a sweeping denial of the stories. de-.
claring that neither the Central nor the Vander-
bilts were interested in the coal deal. The rca-
tions between DreNel, Morgan & Co. and the
Vanderbts. however. encourages the idea that
| the Reading combination will be beneficial to the
Vanderbilt interest. The Lehigh Valley has Nlr-
tually completed its line into Buffalo. and as
an ndcpend,nt trunk line through this State
it might have given the trouble that
| came through the opening of the Lackawannas
Buffalo extension. Under tie control of Phila-
dIphia interests that are in thorough harmony with
the Vanderbilts Reading viii be able to prevent
ob..leperous conduct OH the part of !.ehigh VAL
lev The new deal may not he liked by the Penn.
sylvania Railroad for, while it may benefit by
the profits 10 come from better regulation OF
the coal trade it will be hurt by the Solidiication
of interests that are its chief competitors IN Penn.
sylvania and New-Jer>ey.
The Importance of the new alliance TO the Bail-
| more and Ohio is obvious Ii strengthens the last
named road by reason of its connection with the
Reading and Jersey Central as part of through
line from Ncw-lOrll 10 the West. But IN TINS
respect better security 10 peace among the trunS
lines Is furnished lie Vanderbilt or DreNel,
Morgan party, j. anxious 10 maintain rates ana
secure profits stockholders. IL thPfclOfr WIZ
be able through the control Of Reading. which 10
exercises 10 restrain the Bl,imore and ONO from
rate cutting. and nj the same time 10 bring mo
play a powerful weapon against any possible hos
tile demonstration of the Pennsylvania. by c0n-
centrating the control of the leading trunk line
systems a stronger guarantee Is given of the peace
that is needed between competing roads mo
new combination may render II nadvlsable for ihe
Delaware Iackawanna and Western 10 pursue the
| demoralizng tactics that have often been adopted
| by it il its Western business
PRESIDENT McLEOD'S STATEMENT.