The Carbon advocate. [volume] (Lehighton, Pa.) 1872-1924, 1892-02-13
A HUGE RAILROAD DEAL.
THE READING IS NOW MASTER or
THE COAL SITUATION.
II Absorbs the New Jersey Central, Lehigh
valley and Delaware, Laolsawanna and
Western Railroads aud Controls the

II Absorbs the New Jersey Central, Lehigh
valley and Delaware, Laclsawanna and
Western Railroads aud Controls the
Anthracite Coal Markets and Prices.
PHILADELPHIA, Feb. l1.-Tbrough tho
greatest deal ever made in the history Of
railroading, the Reading Railroad company
will pay a dividend on its stock this year,
and its net earnings will increase s4,25O,OO0
in the next twelve months.
The Reading now controls, by lease Of 900
years, Che Lehigh Valley and New Jersey
Central railroads, and on Feb % the Della
ware, Laclawanna and Western will be con
trolled in the interest of the Reading. The
Reading and its leased lines now represents
t5OO0OO,OOO of capital and its earnings will
amount to $50, 900 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 hsignifcance.
The statement as to the control Of the Le-
high Valley and New Jersey Central is
made authoritatively. At the general of
fees Of the Reading Railroad company
ANdhAutub ANlltuu ~ Nouul Nub hlllB VI TtAll-
road fnanciers. The Reading controls n
per cent. Of the anthracite coal production
and hereafter it is absolute master of the
situation. By this combination the net re-
ceipts for anthracite coal will be at least
twenty-five cents per ton greater than last
year.
A stupendOus Deal.
The results Of this stupendous deal are 80
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 cent. on the stock Of that company,
and in addition the Central is to receive one
half Of its own net earnings in excess Of the
amount required for the per cent. dividend
until the total dividend reaches 10 per cent.
per annum, the surplus over the 10 pei
cent to revert TO the Reading. The Central
earned last year 1O% per cent. so that the
Reading viii get per cent. on this lease
from the start.
The Lehigh Valley is guaranteed divi-
dend at the rate Of per cent. per annum
until May 81, 1892; from that date until
Dec. at the rate of per cent, and after
the last named date the guaranteed divi
dend is per cent.
In addition to the guaranteed dividend,
and after the latter is paid, the Lehigh
Valley stock is to receive one-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.
To Revolutlonize the Old System.
| 1t should be remembered that the Lehigh
Valley is now paying the Eric 81 ,25O, 700 an
| nually for trackage, sum equivalent to 3
per cent. on its capital stock, and that the
Lehigh Valley makes a net gain of this
amount, which, added to the per cent. the
company is now paying will provide for the
Z per cent. guarantee and leave surplus Of
per cent. In addition to this the Buffalo
and lake traffic of all these lines will 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 win
completely revolutionize the old system and
result in enormous savings to the compa-
nies interested in the mining of coal. The
plan is to consolidate Offices and reduce the
number of officers and employees.
1t is Mr.. McLeod's theory that the indus
tries Of Pennsylvania are now paying fail
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 to the loca.
ton Of those markets with regard to the
source of supply,
The Acme of Railroad FInancering.
This will give the industries of Pennsyl
! vania their proper advantage over those OF
distant points, which have their own ad-
vantages of locality, and which now operate
/ against Pennsylvania because, in addition
to such advantages Of location, they have
now those Of equal prices for fuel also This
is wrong which will 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.
1t is now plain what was in Mr. McIeod'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.