The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-02-05
CENTRAL GETS LAKE SHORE
WILL Par sf00, O0O,O 900 FoR THE $780,
OOO, 900 OF STOCK.

Payment - ne Made IN o l.p FER Cent. Col.
lateral TPust Notes Beotred By the Lake
shere stock ACKNOWLEDGEMENTS Have
seid Their Lake shere. ne Ali melders May.
Tho New York Central directors, at q moct-
ing in the Grand Central Station yesterday, au.
thorized an issue by their company Of 800, 0OO,-
600 collateral trust gold notes, bearing SO per
cent. interest, to be used In tho purchase of tho
stock Of the Lake Shore and Michigan Southern
Railroad Company. Tho mortgage under which
the notes are to be issued is TO run for 100 years
and will be secured by the deposit in trust Of
the Lake Shore stock purchased. Notice will
DO given shortly to the Lake Shore stockholders
that they may exchange their stock for the
New York Central collateral trust notes at tho
ratio OF $1,000 in the notes for Ave shares OF
stock, upon which terms agreements for such
exchange have been made by the Vanderbilts
and their friends who own Lake Shore stock.
Official announcement OF the action of the d.
rectors was made by President Dcpcw in the
following statement:
"The New York Central and Hudson River
Railroad directors met this morning and passed
the necessary resolution for the purchase Of
stock Of the Lake Shore Railroad Company.
Tho vanderbil's and others represented by
them have sold TO tho Now York Central their
holdings of the capital stock Of the Lake Shore
and Michigan Southern Railroad Company
and In exchange for every five shares of such
stock accepted one gold bond Of the Now York
Central for 81 200, bearing 80 por cent. annual
interest and parable in 100 years. Tho Messrs.
Vanderbilt made this sale upon the express
provision that the Same terms should be offered
to all holders Of the stock of the Lake Shore and
that such offer should remain open for accp.
lance, by the Lake Shore stockholders for the
period OF at least sixty days. All shares Of the
stock of the Lake Shore Railroad Company.
acquired and owned by the New York Central
bonds. The New York Central board were Of
the opinion that inasmuch as the close relations
Which ,ha have y existed between the Lake shore and
century were dependent entirely on the per-
sonal holdings OF tho stock Of the two com
panies, 1t was very desirable and necessary If
possible to make certain a permanent connec.
ton between the two lines"
Commenting on this announcement Mr..
There is no doubt that this action is of benefit
to both companies and to the stockholders OF
the board this morning. the New York Central
eeptea by the n Messrs. Vanderbil IL and 1niSe their eli.
friends any part Of the stock of the Lake Shore
an official notiso to that ofroct viii be- pubils he'd
In regard to the report that tho mortgage
would have q sinking fund clause intended TO
maturity. Mr.. Depew said that no further do.
buiio VI tAO pan "oulu 10 klNGH III DTCbtnU, DuU
that a full statement would be made in a day or
two, Tho mortgage to secure the notes which
Will be submitted at tho meeting Of stockholders
called to ratify the action of tho directors, has
not been drawn yet, but its provisions have been
agreed upon. 1t will be dran by Francis
Lynde Stetson. Mr.. Depow declined to discuss
the rumors that the combination might take in
the Michigan Central. saying that that was q
gan Central stock in the market Is taken in
Wall street to indicate that there is a basis for
these rumors.
w. K. Vanderbilt. 1t is understood, has for a
long time owned a majority of the Lake Shore
and his friends have sold their stock 20 the New
York Central means that q very large proper
tton Of the total capital stock has already been
pledged to the deal. 1t Is believed in Wall
street that Mr.. Vanderbilt has added largely to
his holdings of Now York Central stock re.
gently and that other members of the Wander.
bilt family have done likewise. There is no
Lake Shore will have the support Of o large
majority of the New York Central stock, espe-
cially since 1t Is understood that the last named
is to benefit by tho surplus earnings Of the Lake
Shore above the amount necessary for interest
on tho collateral trust notes.
Tho New York Central directors also filled
two vacancies in the board at tho meeting yes
terday by the election of George s. Bowdoin of
J. p, Morgan q. Co. to succeed the late Erastus
Corning and Judge Ashbel Green to succeed the
late George G. Buell..
The Lake Shore system embraces LAO miles
from Buffalo to Chicago, and the New York
Central, system 1885 miles, of which 442 miles
are in the line from Now York to Buffalo. After
the combination, therefore. the New York Cen.
trail system will have 4,075 miles of railroad
controlled by 800. 900, 600 Of capital stock.