The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1897-07-13
j. P. MORGAN'S BIG PLAN
WILL USE THE THIRD-RAIL SYSTEM
ON GREAT RAILWAY LINES.
He Owns Electric Stocks, and the
Profits on the Change VIII Reach
About Two Hundred Millions.


IS j. Pierpont Morgans latest. 1t means
revolution that will change the aspect of
railroading affairs in every part of the
country. Nobody but ]. Pierpont Morgan is
IN the position to carry it out Few have
control of enough money, and those who
have would not embark in it.
Mr.. Morgan controls the money, and
he has incentives of considerable urgency.
aside from the 5000 100000 of gain ne sees
at the end of his plans. The only time that
Mr.. Morgan's friends have questioned his
judgment was when he took them into Cen
eral Electric. He is about to lead them out
with honor This is how he proposes to do
it: Mr.. Morgan has acquired control of
nine great railroad systems. He will equip
them all with the "third-ratI' electric sys-
tenn
The New York, New Haven & Hartford
is now getting the first appliances and the
rest-the New York Central the Reading,
the Lehigh Valley, the Erie, the Southern,
the Northern Pacific, the Big Four and the
Chesapeake & Ohio-will follow in due time.
The steam locomotives day is past
Mr.. Morgan is not given to betraying his
pet projects, even to his best friends, but
a few of them have known that he has only
been waiting for the perfection of the
'third-raiP' system to launch the greatest
enterprise of modern railroading already
planned down to the small details.
AN OPEN RUPTURE FEARED.
He is a heavy holder of General Electric
stock. He bought when it was high. The
Vanderbilts, H. NICK. Twombley and other
friends bought with him. Then losses near
~ led to open rupture with the financier,
and the criticism that fell to his lot
ranked deeply.
Through the efforts of Mr.. Morgan the
New York, New Haven q Hartford Rail-
road took up the third rail system as soon
as the General Electric Company had per-
fected its patents. Exhaustive trials twere
made, under all sorts of conditions. Itlwas
found that a speed of 100 miles hour
could be maintained bv the ratified motors
attached to heavy trains.
specifications were drawn which showed
that the cost and equipment and the
pense of maintenance and operation were
less than for steam roads, and a contract
was entered into between Mr.. Morgan's
manufacturing company, the General Elec-
trlc, ana Mr.. Morgan railroad company
the New York, New Haven q Hartford
The first trials of the system were made
on the New Britain-HartfOrd branch of the
road about two months ago. The New
Haven Company is now eQulpping it's BoS-
ton yards, which also handle the traffic of
the Boston & Maine, the Boston & Albany
Old Colony lines. Specifications for the
equipment of the entire New Haven SyS-
tenn, 2,023 miles of track have been sub
mitted to President Clark, and are expect
ed to be adopted al once.
Mr.. Morgan's influence has also been felt
in the introduction of the system in New
York The Metropolitan Traction Company
is about to contract with the General Elec-
trio Company for the equipment of its
General Manager FransioH has recommend
ed it to Russell Sage and George Gould, of
the Manhattan Elevated Railroad. The
Brooklyn elevated railroads have also had
specifications drawn.
CONTROLS THOUSANDS OF MILES.
More than $1,000 miles of railroads come
within the scope of Mr. Morgans great
plan, stretching from Boston to Portland,
Ore, and in the South to Florida and Mis-
sissippi.
He has appeared in most of them as
reorganizer. On him more than on any
other railroad financier of the time has
devolved the responsibility of bringing rail-
road expenses down within earning power.
These roads together represent a capitali-
zation of $1,O16,9S2, 259 With the exceptions
of the New York Central and New Haven
roads they can only be sure dividend pay
ers by the strictest economy OF operation.
BY the introduction of the third rail-
system Mr.. Morgan proposes to bring
about an easy reduction in the running eX-
penses sufficient for dividends and a sink
ing fund to discharge the cost of the i'm
provement. Roughly estimated, the cost. of
electrical equipment on this 2,367 miles of
road will be $547 $40, 900. OF this amount the
New York Central, with its $3.50 miles, will
miles, $40, 460, 000 The cost of equipping other
roads will be: Erie, 1927 miles, $74 1910 900;
Philadelphia & Reading, 1,277 miles, $50 $40,
900; Lehigh Valley 1904 miles, $50, 888 coo;
Southern Railway, 4,752 miles, $95'O40000;
Big -Four 2,435 miles, $46. 100000 and the
Chesapeake & Ohio, S43 miles, $4,215,00O.
)VQ fTfa1l q nf
$547, $40 O0G-Win pass through the treasury
of Mr.. Morgans electrical works, leaving
profit % per cent or $136, SS5, 900. The pat
entS for the system which will bring in
this princely revenue are valued now at
IS, 900 900.
MILLIONS ARE IN SIGHT.
But this direct profit is not the only gain
that will fall to the lot of Mr.. Morgan.
General Electric stock is now quoted at
1875. 1t will be worth 300. Mr.. Morgan and
his associates control SIS, coo worth of
this stock the market value of which is
$S,250,000. The gain there will be $66, $50 coo.
This $66, 250 coo, added to the direct manu-
facturer's profit of $136, $50 900, will bring
the total profit up to $2O3, 1856 OO0, to say
nothing Of the increased earnings Of the
railroads in which Mr.. Morgan has con-
troll, or of the commissions which that
astute Iinancier will earn in floating the
tial in the deal.
Mr.. MOrgan's movements in the railroad
world are exciting new interest. The ex-
elusive announcement by the Journal of
the passage of the Lehigh into his hands in
the interests of the New York Central has
set railroad men thinking. Yesterdays
stock market showed the effect OF the news
1t closed generally higher, buoyed up by
the Morgan deals in this and other impor-
tant railroad lines.
The control of the Lehigh Valley by the
New York Central with Morgan at the helm
means much to the general railroad stu
alton. 1t helps the trunk lines by prevent
ing rate cutting by the Lehigh, which owns
the shortest route from New York to Buff
falo. 1t improves the position of the New
Vanderbilt interest amenaOIe to Mr.. Nor
gan's suggestions on the subject of new
equipment.
1t was said yesterday that Mr.. Morgan
when he secured the option on the hold
ings Of Lehigh Valley stock by the Packer
estate. agreed to do several things for the
estate and the railroad company He
loa ned the estate about 81, $50 600 with which
to protect its loans second, he agreed to
loan the railroad 100000, and, third he
agreed to extend the s., coo, coo bonds of the
road which mature in 1898 at per cent
lateral trust bonds at low figure, a COM
mission for extending the maturing bonds
at d lower rate of interest, and an option
on the Packer stock, carrying with it the
voting power.
ENTERING a FORBIDDEN CITY.
DIR. Wolfe, IL German Traveller, Spends
Two Hours in Chang-Sha.
New York Sun.
Some curious details are given in letters