The San Francisco call., 1899-06-05


OF $I7.5oo ooo bearing interest at the rate OF pc
cent per annum to cover the obligations OF the 81
companies it had absorbed purchase other railway
and to pay for future construction and equlpmen
These bonds will mature in Io24 To secure them, o.
July r. 1904, trust mortgage to the Union 1rus
Company Of San Francisco executed, which GOV
cred all the consolidated railways, well as tuur
acquisitions and extensions and reclted an intention
as rapidly as practicable to retire the bonds OF tn
six corporations which within the limits OF the laV
had transferred all their property and franchises
! Since October I3, 1898, the Market street ha"a-
Company has obtained additional franchises OF 1t
own and has expended $48I7ooo in construction tt
which amount its bonds have been issued and are IL
circulation But the bonds of the six railways which
if absorbed after the lapse of nearly six years are
still listed in the Stock and Bond Exchange and art
daily bought and sold, and while the Market Stree
Railway Company has the combined assets and Their
exclusive management beyond the declaration in the
trust mortgage, which apparently has remained tor
Did the holders OF bonds to the amount OF $7O35o
have no other securities than the transferred ano
slowly vanishing franchises and property by which
principally the Market Street Railway Company ha
secured its own bonds, issued and unissued Wha
its ultimate intentions may be it is not possible to con
lecture but upon its face the situation not encour
aging and appears to be fraught with peril to the
| a
sition there is no evidence that the $1268ooo Of I'm
issued bonds be used for the purposes to which
they originally intended be applied this BE-
the fact then before long there may be danger of
panic in this class of securities.
| But suppose the outstanding bonds of the six sub
sidiary and collapsed corporations and of the Marke
Street Railway Company be added together and the
entire Indebtedness charged to the latter The sun
total is $II852oo and the question at arises as
the provision made for the liquidation of the bonds
due in 1924 The trust mortgage, which expressly
authorizes the Of these bonds to the amount o
$Io465 for purchases and for additional con
struction, provides for no sinking redemption func
until 1913 and then only the rate of 100000 pei
annum, which in six years would produce $o6oooc
to pay obligations to the amount OF $II,852ooo. By
that time many OF the existing franchises will have
lapsed The result would inevitably be disastrous i
toward the maturity of the bonds the conditions
should be- as every visible indication suggests that
apart from personal liability equitable proceedings
the only security left for the bondhoders would be
the OF perishng franchises and mass OF ole
iron and other worn out property.
Ii is simply fair also bear in mind that the policy
OF the New Charter, practicalized its text the
acquisition OF public utilities and against renewals
which, even though they could be certainly antic
pated would not enter into financial estimate OF the
present or prospective value OF securities this
congruous condition. The terms moreover on which
under the coming system OF municipal government
renewals are tolerated are favorable to specula
tive operations in street railway bonds By section
OF the New Charter not only street railway fran
chises limited in duration to twenty-five years and
accompanied by the exactiOn OF greatly enlarged per
centages on gross receipts, but their Endorsement
qures a three-ourths vote of eighteen Supervisors
which would be exactly thirteen and onehalf and
override by the Mayor IN each instance hiteer
votes would be essential
There are issued IS61zo shares of the capital socl
OF the Market Street Railway Company which
quarterly dividend OF 90 cents per share, $III7oz
altogether is paid. The stock is quoted at from 62H
TO 63G5 1t is thus manifest that the original bonds
six virtually extinct companies and the bonds OF tht
consolidation to the amount OF at least $II,852ooo
and with the prospect OF large addition for Other
acquisitions and construction, secured by the same
property that the distinct securities for the orgna
bonds are under the sole control OF the Market Stree
Railway Company; that the value OF these securities
depends mainly upon franchises that will gradually
revert to the municipality, unaffected by any incum
brances that adequate provision for the redemption
OF the new bonds has been made and that in the face
OF these facts the value of the Market Street Railway
stock is maintained by the withdrawal in the form
dividends OF its current income to the aggregate yearly
amount of $4468o8 which the time of the maturity
OF the $Iz5oo 900 OF bonds in 1924, if continued
at the same rate would reach the enormous o
SI1I7o2oo This is diversion of funds at the ex
pense OF creditors that is simply astonishing
/ Unless The Call is greatly deceived it has supplied
conclusive reasons for the projected raid of the
railway monopoly through corrupt Supervisors, anC
has also presented facts and figures which will enable
the community to comprehend the imminent DANCE
to street railway Indebtedness resulting from specu
lative and unfair manipulation.
Residents OF the Mission propose to make it still
warmer for the Southern Pacific Company. Having
defeated it in It's effort to rush through the double