The sun., 1897-09-21
NEW YORK. August 81. 1897
Messrs. VERMILYE & COMPANY:

NEW bOth' AuBubt Lobs.
Messrs. vERMILYE & COMPANY:
GENTLEMES.-Replytng to your request for In.
formation regarding tho 90. 600. 900 First Mort.
sage "A Per Cent sinking Fund Gold Bonds II this
Company purchased by you. would state AZ follows:
The Panama Railroad Company exists under per
p-tuh and special charter. granted by the LsGisa.
ture OF the State OF New York April :. lsts, aud
Govern powers to operate steamship a. well a. rail.
road lines, under concessions from the Republic of
Colombia, granted In 1850, and running TO A. D.
1906.
In 1867 this Com pany issued e 900. 900 sterling
CSS. 200. 600 Thirty year Per Cent Mortgage
Bonds, which mature on October 10, 1se7. Although
there was sinking fund obligation which required
II TO do so. the Company, from motives OF prudence.
Voluntarily aside surplus earnings from time
time for the purpose Of meeting these bonds at
maturity and has thus reduced the balance. for
whiCh provision IL To be made. TO the mparaively
small sum Of Ess7. 600 Say Sa. ess. 900.
From the proceeds OF the sale OF the 02. 600. 900
Al7 Per Cent. First Mortgage Sinking Fund Gold
Bonds, and with securities and ca in hand
from surplus earnings. the Company vii! have
suftcient to retire the outstanding sterling Mort
gage Bonds at Maturity and leave surplus OF about
$500 zoo.
The new mortgage will conItirute the only n ort-
gage Indebtedness o. the Company. and will te
secured by nrst IL all the railroad. steaIushipS
concessions, r:Ehts franchise and real and
property OF the Company now owned or hereafter 10
be acquired.
In accordance with the .e-ns OF the uortsnr.
securing she issU". the Company Is set asiie
IN AGg-s; Of eHeh year $3.50. ooo n gold for she
red" por OF these bonds at the beat price which
thev be obtained by the Trustees, and. n thsy
car2ot BE itus bought in the open market below
los aud accrued Interest. the Trustees 10 draw
that amount by lot al that price, and pay the
on the mex: intereG: data.
MI q er ritlef IN deer
on any interestta;e any all OF the o-tstAntlas
Londs by 10: az iGs and accrued :rt-r--t-
Under the Germs o: the from the Repub
lie OF Colombia tsiI CO. nany pays 10 That govern.
meut aIcCA slhsIds OF Se2s 900. md 81 al.o
pays 10 tho nepa tmcai {: Panama subsidy o.:
$4,000. making total chSrse of $3.50. Orp per
F-rur'. T--e !s-n n's a-e N lieI c: a.!
other governmental chsrses.
A! the seQuest of tae Colombian government, In
ordsr capitalize for its hereft he subsidy due for
twenty seVsa yea-s. ms company .Ss-si 81. 900.
600 o: tonGs Of ~hca there are Row oc,,;Sa tiaS
81 sac. 900. the rpmE'aiug 81. "a 0GO having
ecSn PAID and cancelled - aaEaA t.aw:nS-.
These subsiGy bonds referred DO not repres-u.
any Increased naeb;et tness, AID secured by
mortgage.
Out Of the subsidy due the Govern mert each yeA-
tie interest these las;.n8u-ed bonds is ysG and
the remainder Is used Tor she purpose o. drawing
can eli!ns as many bonds can be redeemed tie
with. In this way the issue will be annually rs-
duoed and will be retired before maturity. At the
e1pirat N OF the twenty seven year.. IN 1908. the
payment Of the annual subsidy direct TO the Gov
mept will be resumed.
The authorized issue o: the a. Per cea,. Fl-.,
Mortgage Loan /, 90. 600. 900. Of which 8: eRH.
oOo are Issued AZ present. The remain ng 50. OO
600 arc held n trust TO oe issued only for better
nlents Improvements or new property acquired, Sat
Like purposes as prorid ed in tho .cl.rtsaS-.
Fy this reduction in tbs principal. and also IN the
rate o. Interest toe Company reduces its annual nxed
Charge over 100000.
To meet the requirement. o. the DEVELOPING tra-so
Of the Pacific Coast with she United states aud
Europe. and to abolish the system of uSatersse
service In the Bay OF Panama ach has prevailed for
nearly atty yeArs, and TO introduce the most i'm.
proved methods OF loading. unloading and handling
trac the Company has contracted for tae coustruc-
uon OF great pier. harSor AMI other like improve
ments and facilities IN the Raw OF PauAua. Ie err T.
ting the loading aud unloading OF carsoes directly
from vessels TO cars. These Improvements arc now
under way. and Will cost about 81 900. 900.
The large saving in expenses operation OF direct
shipment over the iEhteraSe Involving double
handling c: cs-Soes 1. sefevideui: while the IN.
crease IN business from the shortening OF
At least DAYS freedom, from delays inter.up-
tions, and accidents and general faclia;iou o: bus
meas, give assurance that the annual cash results
from these Improvements will be far In Of the
annual interest charge Incurred thereby.
Auuitlohs TO the CompApy's Geet OF steamers, the
establishment OF grain elevators and warehouses
on the Isthmas. and other equally impo-tAn, I'm.
provements. are also contemplated in the early
future. These latter additions and improvements
will involve an expenditure during tho next few
years OF about S7oO. 900.
1.-The net earnings OF the Company for the past I'VE
years have averaged selA.5sI 90 per annum The
yean 1893. 1894. and 1898 the year, of asgrs.
sive competition by this Company 10 secure and
establish the nrn position it attained In 1925 The
net eArningS for the year lsy6 were 81 OsS /.
8OS.01.
Tho net earnings for the nrst six months OF the
current year 0olS. sos. Io. an increase OF net
pront OF I0.01 per cent. the Corresponding
period OF last year.
peductinE from the earnings OF the past year the
subsidy Of $3.50. 900. there is left a5sS. sos n
against which the only n1~d charge OF the COMPANY
iii be the interest the bonds sold you amouptip1
to 500. 900 per annunl aside from the nkinR Fund
lnsAllnent in other words during the past ar the
Company earned over eight times the amount OF this
interest charge.
Tho railroad and Its equipment. a. well As the
steamships. tugs lighters and other property OF tho
Company. have been brought TO . high state OF
enciency. anc the property 10 In better copdi.
tion than ~ time during its corporate
Tho Capital Stock OF the Company amounts TO
81. 900. 900.
During the almost half lfcentury tho existence Of
the Company IL hL4 continued without cessation or
financial default.
Younyery truly
Gigned) ;. EDWARD sIMMoys,
PresidenL