Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1892-02-11
S6O0,00O,0OO IN IT,
The Greatest Railroad Coup of
the Age Engineered by
Mr.. Mcleod.
READING is NOW ON TOP
In the Anthracite Carrying Trade by
Securing Control of
ALL OTHER COMPETING. LINES.
Details of Deal That Represents Brains as
Well as Capital.
READING is NOW ON TOP
ALL OTHER COMPETING. LINES.
PHILADELPHIA WILL BE A GAMER

UD60IS IQdL udNG 1OE bOhC bALhS SNSA -
progress, designed to place the coal pro-
ducing and carrying interests upon a
more stable foundation, have been COM
pleted. The primary object in view has
been to secure more economical manage
ment IN the coal trade by avoiding e1pen-
sive selling agencies and heavy commits
sions SO that while coal will not cost any
more to the consumers the coal producers
and carriers can get better results and Sc
cure profits by saving expenses.
The combination and complex agreements
heretofore made have been generally found
inadequate to accomplish the object sought,
as the binding force was insufficient There
has now been carried into practical effect a
plan, formed by President Mcleod, which
embraces the most extensive financial en-
terprise yet undertaken in his country, and
which he thus briefly outlines:
The voting trust now holding the stock of
the Philadelphia and Reading Railroad will
shortly expire, and the control of the stock
of that company has passed already into
hands that are friendly to the present
Reading management. The Reading Rail-
road has by lease acquired control of the
Lehigh Valley Railroad, corporation in
the State of New Jersey. The Port Read
ing Railroad, which is under Reading man
agement, has bv lease acquired control of
the Central Railroad of New Jersey.
What the Reading Will Control.
This is practically placing in the Reading
Company's hands the control of the affairs
of the Reading, Lehigh Valley and New
Jersey Central Railroads, and also, through
the latter, of the Lehigh and. Susquehanna
Railroad, and of the Lehigh Navigation
Company.
Under the lease they will be paid guar
anteed dividend of z per arnum upon the
stock ofthe Central Railroad of New Jersey,
and guaranteed dividend upon the stock
of the Lehigh Valley Railroad at gradually
increasing rates. per cent per annum until
May 81 next, then per cent per annnm for
the half wear until November 80, and after
ward per cent per annum. In each case it
is provided that the surplus earnings of the
respective companies, if any, beyond the
above guaranteed rates of dividend, shall be
divided between lessor and lessee until the
lessons share reaches the guaranteed rate of
10 per cent per annum.
The great advantages of the new
arrangements are obvious. In addition
to the splendid Reading Terminal,
now constructing in Philadelphia, the
Reading will acquire the magnifi-
cent terminals of the Lehigh Valley and
New Jersey Central on New York harbor.
Through the Lehigh Valleys new Western
extension there will be provided a direct
route to the lakes at Buffalo, with spa
cious terminal there.
When it is further known that the control
of the Delaware, Lackawanna and Western
Railroad has passed into hands that are
friendly to the Reading management the
investing public will recognize that the
new arrangements will tend to economy
throughout the various railway systems
concerned and will make more stable values
for coal company securities without adding
to the cost of coal to the consumer.
MilIionaires in the Big Deal
The financial arrangements herein out
lined have the active support and co-opera-
tion of A. ]. Dre1el, P. Piermont Morgan
and j. Lowber Welsh, and also J. Rogers
Maxwell and George f. Tucker, of the New
Jersey Central management The latter
gentlemen and their friends have become
the largest stockholders of the Lackawanna
stock.
The following statement was furnished
the press this evening: Through the great
est deal ever made in the history of rail
roads the Reading Railroad Company will
pay dividend on its stock this year. The
Reading Railroad Company's net earnings
will increase 81, go, 600 during the next II
months. The Reading Railroad Company
now controls by lease for 999 years the Lee
high Valley and the Jersey Central Rail-
roads, and on February % the Delaware,
Lackawanna and Western will be controlled
In the interest of the Reading. The Read
ing Railroad Company and its leased lines
now represent six hundred millions of capi-
tai, and its earnings will amount to $50, 000,-
600 per year. This is the greatest coup ever
known In corporation finances, besides With
the famous South Penn-Beech Creek-West
Shore deal of 1885 pales to absolute insig-
nlhcance. The statement as to the control
of the Lehigh Valley and Jersey Central is
made authoritatiyely at the general offices
Of the Reading Railroad
President Mcleod is to-day the king of
railroad tnanciers. The days of Readings
financial difficulties are at an end, and to-
day there is no stronger railroad corpora
tion. 1t controls 72 per cent of the anthra-
cite production, and hereafter it is absolute
master of the situation. By this combina-
tlon the net receipts for anthracite coal will
be at least % cents per ton greater than dur
ing last year. The result of this stupendous
deal is so far reaching as to be difficult of
comprehension.
Terms of the Tripartite Agreement.
The terms of the lease with the Central
Railroad of New Jersey provide for guar
anteed dividend of per cent on the stock
of that company, and in addition the Jersey
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 10 per cent to revert to the
Reading The jersey Central earned last
year 1923 per cent, so that the Reading will
get part of it from its lease from the
start.
The Lehigh Valley is guaranteed a divi-
dend at the rate of per cent per annum
until May 81, 1892 from that date until
December / at the rate of 6 per cent, and
after the last named date the guaranteed
dividend 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 about 10 per cent
per annum, after which the surplus goes to
the Reading in the same manner.
Has Confidence in the Lehish.
Aside from other considerations, to be
mentioned later and which will affect the
earnings of these two companies equslly,
President Mcleod is confident that the
Lehigh Valley, after May 1, when its new
line to Buffalo will be completed, is certain
on its own merits to earn more than the
full amount of the guarantee wholly re-
Sardless of any benefits which its revenue
'say derive from the new relations between
he three companies.
1t should be remembered that the Lehigh
}4lleY is now paying the Erie ], $50, 900 an