The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1898-02-12

IieSlueIil hayes, Oh the 81. Paul "
Duluth Railroad company, has issued
a circular to the stockholders contain
Ing the following statements among
others:
The Saltwater & st. Paul company's
hrst mortgage Z per cent bonds mature on
Dec. l, 1900 There are Outstanding $685.
500, against which SIG, 1913 In cash is held by
the trustees in the sinking fund. There
are outstanding $4,000 Of the Taylor's
Falls & Lake Superior Railroad COM
maturing Jan. l, 1914, to meet the payment
Of which the trustees have in the sinking
fund 1850 shares of st. Paul & Duluth
Railroad Rail a6 company preferred stock, which
fund is annually increased by the divi-
dends declared on these shares. There
are also outstanding $500, 900 of the Duluth
Short Line Railroad companys first mort
gage per cent bonds, maturing Sept. l,
1915. The st. Paul & Duluth company
owns more than So per cent of the stock
of the branch lines above mentioned.
In the annual report for the year end
Ing Dec. 81, 1888, attention was called to an
expenditure for construction, betterment
and equipment from the land and stumpage
trust fund, under resolution of the stock
holders Of June 70, 1887 which authorized
the temporary use of the trust fund for such
purpose. Subsequently at the stockholders
meeting of June II, 1885, the directors were
instructed to take the necessary means to
restore this amount to the trust fund. On
Dec. 81, 1888, the amount of the land and
stumpage trust fund which had been so
used was s1Ss56 During the year ending
June 80, 1892. S97,7 90 was returned thereto
from the earnings OF the company. The
balance now due said trust fund is $500, 716.
In accordance with the laws of he
United States, the freight equipment is be-
ing provided with automatic couplers and
air brakes; the cost has heretofore been
charged to operating expenses, there Is
no source other than income from which
such expenditures can be made. 1t is esti-
mated that it will cost S175, 900 to finish this
work, and the law requires that it be COM
pleted within two years. Reference has
been made in the annual reports of recent
years to the work which has been done
in the reduction Of grades, the cost of
which has also been a charge upon In
come. To complete this work, so that the
full benefit of that which has already been
accomplished may be received, a further
estimated expenditure of about 100000 will
be necessary. The addition of freight cars
of the present standard weight to the equip
ment would greatly improve the earning
capacity of the company and its economy
of operation.
In view of the foregoing, the directors
recommend the issuance of $5,0000 900 first
mortgage consolidated bonds, bearing rate
of interest not to exceed per cent per
annum and covering all the property of the
company, with the exception of the lands,
the land and stumpage contracts and pro-
ceeds thereof, to be disposed of as follows:
To be reserved for retiring of maturity:
First mortgage 5 per cent bonds, 81 ,000,00
and second mortgage per cent bonds, 81
0O0, goo; total, So, O0O, coo.
To the extent required, 1900, 900, to be
used for the retirement of the Saltwater, &
ST. Paul bonds, the Taylor's Falls & Lake
Superior bonds, and the Duluth Short Line
bonds.
The balance is to be applied to the follow
ing purposes: The restoration to the land
and stumpage trust fund of the balance
due; the equipment of freight cars in &C
cordance with United States law with auto
matte couplers and air brakes the compile
ton of the reduction of grades on main
line; the purchase of new equipment, and
betterment of the railroad property. 1t is
expected to issue these first mortgage con-
solidated bonds bearing per cent interest.
The dividends upon the preferred stock
are limited to per cent. During the last
thirteen years they have averaged more
than per cent and in no year has less
than per cent been paid. If the balance
of the money taken from the land and
stumpage trust fund, above referred to, had
been returned. and a corresponding amount
of preferred stock retired, there would have
been and average saving of SAL 46 each year
in the amount required for the payment of
the dividend the outstanding preferred
stock. This saving should be contrasted with
the addition to fixed charges of $27, 735. The
increased number of tons which can be
hauled in trains by completing the grade
reductions, it is estimated will reduce the
operating expenses much more than the in
terest upon the cost of such work