The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-07-28
BOSTON & ALBANY LEASE
Directors viii Send Proxies
to Stockholders
Today.

bany Railroad Company have issued
circular letter, of which the following
is the substance, that will be received
with proxy to all stockholders today:
The directors of the Boston and AL
bany Railroad Company and the direct
ors of the New York Central and Hud-
son River Railroad Company have
agreed, subject to ratification by the
stockholders of each company and by
the legislature of Massachusetts, to
lease the railroad and property of the
Boston and Albany Railroad Company
FOR the term of nine hundred and nine
ty-nine years from July 1, 1900, at 3
per centum per annun, free of all taxes
now imposed or to be imposed, reserv-
ing for your benefit four millions of
dollars of property, all of which appears
| in the lease and supplemental contract,
copy of each of which is enclosed.
The reserved property, if held by the
company, it is confidently believed, will
| yield one-half of one per cent per an
mum, making an annual income on the
stock of eight and one-half dollars per
share. If it is sold and divided among
the shareholders, it viii yield sixteen
dollars on each share.
1t was the object of the d.
rectors to obtain the largest
! possible permanent income for
the shareholders without reference
to the price of the stock in the market,
nevertheless it appears that, measured
! by the market quotations, a stock
which pays eight and one-half per cent
| is now equal in price to what stock
would bring ten years ago which paid
| ten per cent.
In considering the different methods
| by which this property might be trans
ferred into the control of another com
pany, it was thought that a lease to
| the New York Central and Hudson
River Railroad Company would give
better results to the shareholder than
any other practicable method, because
even If three hundred dollars per share
in a three and one-half per cent bond
at par could havebeen obtained, it would
not have yielded so much net to our
shareholders liable to taxation in Mas
sachusetts as the sum obtained by this
lease.
The directors believe that the fierce
and increasing competition for BUSH
pess between the different seaports,
and the very low rates at which this
business must be carried, make 1t quite
certain, If this company Is to continue
to perform its public duties, that the
shareholders cannot hope to obtain as
der ar independent management, as is
provided by this lease.
There is perhaps an impression among
some of the shareholders that the
pany could have paid in dividends even
as high as ten per cent per annum, but
the best railroad practice is to expend
literally from the current receipts to
improve the road, after providing fair
return for the capital, and it Is these
ffsTnE IN hn al N4Fh
have given our road its high standing
and make 1t possible to lease 1t upon
as good terms as are now offered. No
prudent management of this road in
the last ten years would for moment
have considered the payment of more
than per cent dividends.
Others also may believe that the road
is substantially completed SO that few
expenditures will be needed upon it in
the future and much more of its in
come might be devoted to dividends.
This was the opinion Of the directors
so long ago as 1875, as expressed in their
report of that year, but nevertheless
large expenditures have been necessary
In each year since that time, and the
road is no better relatively to other high
class roads now than it was then, and
there is every reason to suppose that
each year in the future will bring its
own needs of the expenditure of reve-
nue.. In fact, large sums of money
| for important works must soon be pro-
vided. What guarantee have we that
! our present gross income is to be main
| tanned? 1t has already fallen from
$40. 169,1 It's in 1893 to $9,241 ,56S in 1898, and
| vet the work performed was much
| greater in 1898 than 1t was in 1893 as
measured either by train mileage or by
Tonnage 1t is likely also in regard to
| the passenger business, that the rapid
extension of the electric street lines will
| further reduce the income from pas
sengers which on all railroads has al
ready been seriously affected. This
| will require business to be done on a
| still less margin of profit.
| AS to the physical condition of the
road, it is provided In the lease that
| il shall be kept in good order and con-
diticn AS to the issue of bonds under
! this lease, none can be issued without
the authority in each instance Of the
state of Massachusetts,, through Its con-
stituted authorities. Under this lease
the organization of our company will be
maintained. it's dividends and the i'm
| te1 est on its bonds and the rental on
its leased lines, will be paid by its own
treasurer, and the annual meetings OF
| its stockholders for the choice Of its
officers will be held in Boston as here
tofore.
INC New York Central and Hudson
| River Railroad Company Is among the
best Of guarantors, and the sharehold-
ers will have a security which is one
of the safest In the land.
At the meeting of the directors, held
June 30, 1893, at which this lease was
voted, there were nine directors pres
ent out of ten who were qualified to
act, and the one director who was then