New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-01-10

at 55 35 Jersey Central from 126 l." to l2o Ia
The terms OF the leases were that the Reading
assumed the Obligation OF interest, rentals ETC., ana
guaranteed the stock Of the Leigh Valley dVoehds
ut the rate OF per cent year up to July l. 1eS2'
dividend OF per cent for the next year and dividends
Of per cent a year thereafter. All profits III ex'
cess OF per cent were be equally divided between
Reading and Lehigh Valley until the latter earned 10
per cent. The surplus above that figure was to 60
TO the Reading. The Central Railroad OF NewJersey,
by its agreement with the lessor, to receive
per cent n year rs stock and half OF the surplus
earnings above that figure The Reading was to re
tain the other half In 1859 the Jersey Central paid
a dividend OF per cent. but after that paid per
cent.
The Jersey Central was nomlnally leased to the
Port Reading Railroad Company. This was organized
In November. 1890. In the interest of the heading'
to build twenty miles Of road from Bound Brook 10
staten Island Sound, whore extensive terminals We're
planned The Lebieh Valley, being Pennsylvania
corporation was not affected ~ Chancellor Mctlls de-
cisIon.
The financial world expected great results from
the DEAL J. Pcrpont Morgan. OF DreXel. Morgin
& Co.. who was concerned In the transaction, said that
1t was within moderate limits to estimate that the
union OF the roads would add from S30O0o 600 to
$4.00O0OO year to the earnings OF the Reading
Company. The reduction OF expenses In running the
roads and the abolition OF the rae-cuttng which had
thought. make the "deal" Of immense advantage to
the Reading. The promise made that coal worlt
not cost any 10 the consumer than 1t was COSTING
at that time the roads increased profits would come
largely from the abolition Of expensive selling agencies
ard heavy commissions.
A statement mGdc BIZ the Reading people at that
time said "Thc Reading Company and It's leased
lines now represent $500. 100000 Of capital, and its
earnings will amount 10 2sO, 100000 a year. The
Jersey Central earned last year 10 "a per cent, 50
that the Reading will get profit on this lease rom
the start. Aside from other considerations, Presl-
dent Mcleod Is confident that the Lehgh Valley after
May l. when its line Is completed, Is certain to
earn more than the full amount OF the guarantee
wholly regardless OF any benefits which its revenues
may derive from the relations between the three
companies. The LehiSh Valley is now paying the
Erie 81 $50 900 annually for trackage, sum equ'ya
lent to 3 per cent It's capital stock. 1t Is esu
mated that the changes taken together viii yield
new increase Of at least - cents ton On all coal
handled BY the eonsoldated Reading system. a,os 1
24,oooooo annually this single item means net
gain OF S6.0OO.0O0.
and there was widespread questioning as 10 inc
legality OF the combination. Congress app inted
committee 10 investigate the subject ana 50 dd lne
New York and New-Jersey LEGISLATURES; The new
Jersey Legislature passed resolution leganzlhg ihe
lease OF the Jersey Central and the publc ndlenaiio
was so great that Governor Albeit vetoed the Dill
TO annul the lease. and September Chancellor
McCill decided that the combination, so far as IL
affected the Jersey Central, was illegal.
In anticipation OF the action OF the Jersey Eeh'i @
the Lehigh and Wilkesbarrc Coal Company which has
the handling OF the coal sales ior the 'emtr;'i, Oh
january / resumed control of It's business Inc man
gpment OF the coal company had since feoruar' Oce
vested n the hands Of the Reading by virtue OF the
lease.