The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-06-28
PUT IN
Against the Proposed
Lease of Boston
and Albany
BY N. Y, N. \. & H. PEOPLE.
Analysis Of the Albany's
Earning Power
Notes.
BY N. y, N. \. & H. PEOPLE.

An informal protest against the pro-
posed lease of the Boston and Albany
by the New York Central was made
yesterday, it is understood, by repre-
sentatives of the New York, New Ha-
ven and Hartford Railroad Company.
There were indications in certain dis
patches received in this city from New
Haven that the management of that
company is deeply concerned about the
probable effect of the deal. One of the
vice presidents was quoted as express
ing doubts about the acquisition on the
terms outlined. He recalled the fact
that the Boston and Albany people had
been offered equally good terms by his
company and refused them.
President Bliss of the Boston and AL
bany Railroad will be in New York this
week, and, according to present expect
atoms, the completion of the details for
the absorption is merely that he will
have full power, as the representative
of large majority of the stock at the
forthcoming conference.
The outcome of Mr.. Vanderbilt's far
reaching plans may show some sur
prising shifts in the centres of railroad
authority. Grain shippers are exer-
cised over a possible diversion of the
grain traffic of this port. The advan-
tage of the Vanderbilts, as the owners
of the Boston and Albany, to feed that
road with goodly proportion of the
east-bound shipments of breadstuffs,
sending grain and -four designed for
export direct to Boston via Albany.
This is a phase of the matter that is
likely to awaken an active interest on
the part of the Produce Exchange mer-
chants and the chamber of commerce
men, who for so many years have been
seeking to put a stop to alleged rail-
road Determinations against the port
of New York. The discussions of this
subject which are likely to ensue will
doubtless develop some interesting
points. New York shippers may find
it to their advantage to urge forward
the often-talked-of enlargement and
improvement of the Erie canal and the
establishment of convenient localities
in this vicinity of large elevators for
the handling and storage of grain.
The Boston and Albany double track,
and the probable fact that terminal
handling charges will be found to be
cheaper in Boston than in New York,
it is feared by some, will operate to the
disadvantage Of this city as a grain
terminal point, as soon as the owners
of the New York Central become re-
sponsible for the earning power Of the
Boston and Albany
All of the Boston and Albany rumors
OF the season assume that in any lease
that may be made the stockholders
Will be guaranteed not less than eight
per cent in perpetuity, and that in any
sale the buyer will accede to a cor
responding valuation for the property
An interesting report came from high
quarters in the spring to the effect that
a controlling interest had been offered
10 the New York, New Haven and
Hartford at $500 share but only on
the condition that the minority stock
holders should be given the same terms
as the majority. This was more than
the New Haven managers saw their
way clear to give, although they were
understood to be willing TO pay $500
for bare majority, leaving the little
fellows to shift for themselves. The
current report in New York respecting
the New York Central is that that
corporation, or rather William K. Van
derbilt, is ready to lease the Albany
forever with an eight per cent guaran-
tee. Other suggestions have made the
purchase price $500 & share in New
York Central three per cent bonds.
In view of this high valuation of the
property, an estimate of the Boston
and Albany's actual earning capacity
VIII be of interest. If the Vanderbilts
are ready to guarantee for the stock
under a lease Of per cent, world
without end, they, of course, see in the
road q good deal more than eight per
cent annual net income. The present
management, having no other interests
involved. virtually puts into the plant
In betterments Of various kinds all of
The surplus earnings in excess of eight
per cent for the stock. Lessees very
naturally, after clearing the guaran-
teed rental, will put the surplus not in
TO the property but into their own pock-
cts. This is business. The Vanderbilts
OF course, will take the property. if at
all, only for what they see in it. Hence,
without much question, the first conse-
quence Of the passing Of control into
other hands will be halt in the ex-
traordinary OUTLAWS for improvements
that have characterized the Chapin
and Bliss arrangements. 1t is to be
said, however, that the Albany. from
an expert point Of view, is operated far
from economically, and that the New
York Central, though itself " no
means a model Of scientific economy.
doubtless can save a great deal out of
present operating expenses without do
ing either the property or the com
munity harm.
Investigation Of the Albany's ex
pense accounts indicates that on fair
basis Of OUTLAWS, with no "frille." such
as presumably the New York Central
would adopt, the company, against 8
per cent. given to the stockholders
is earning II or Y per cent. Der an
mum. The margin is quite enough 70
excite the interest of anyone sufficient
~ powerful to command central If a
cost of or 9 per cent. 1t is quite
enough to account for a lively upward
movement of Central shares on the
prospects. The Albany's surplus an
pears chiefly in its maintenance Of way
expenditures. Its appropriations in 1898
for the abolition of grade crossings
alone amounted to $3.50 per mile, or as
much as the whole of the maintenance
expenses Of leading roads in the middle
west. The average charges of the last
four years for maintenance Of way
have been s4130 per mile, or double the
expenditures of the great fouc-track
New York Central in this department.
In equipment expenditures the Bos-
ton & Albany is more saving. But on
the other hand, all of its miscellaneous
income goes into reserve funds. Such
savings as may be figured out very
readily, beginning with not less than
$3.50 900 in 1898 in the maintenance of
way department, would yield D. c.
or more for the stock, in addition to the
per cent. dividend. The Albany is
operated much less cheaply in trans
portation and general expenses than its
chief competitor, the Fitchburg, partly
because it is more decidedly a passenger
road.
CAsTo7rA.