The news & observer. [volume] (Raleigh, N.C.) 1894-current, 1900-01-05

entire capital stock of the Georgia and
Alabama railway, amounting to more
than thirty million dollars, and the total
amount of new stock, which we proposed
to issue on account of the Florida Cen
trail and Peninsular and the Georgia and
Alabama stock added to the total amount
of bonds to be issued for these proper
ties aggregate less than the face amount
Of the old securities which we thus pro-
pose to retire. so that the total amount
of new securities would be less than the
face amount ci the old securities now
outstanding on these properties, and
which we intend to extingush.
he total interest charges on all bonds
Winch we proposed to issue for the ac-
QUESTION of the entire capital stock of
the Florida Central and Peninsular and
the Georgia and Alabama railways.
amounts to scarcely $780, 900 per annum,
or about 100000 less than the actual
surplus net earnings of these properties
after the payment of all their present
fixed charges for the past fiscal year,
while they were operated as separate
properties without the benefits which
would result from consolidation.
IIC ACTUAL GdIllIuSS III IllC luoG uoNdl
year of the roads already finished, which
are TO be included in the Greater Sea
hoard System, We're large enough to pay
full interest on their present bonded
debt, and also on all the new four per
cent. bonds which it is proposed to issue
on the consolidated system, and yet
leave surplus of some four or five hun
dred thousand dollars in addition. These
figures you had before you at the time
You sent me your misleading telegram
of December Doth.
You criticiSe the issuance of four per
cent. bonds by the system for the pur-
pose of acquiring the capital stocks of
roads which it is deemed desirable to
consolidate The issuance of bonds by a
corporation to pay for stock acquired of
another corporation as you we'll know is
not unusual. The New York Central
railroad recently purchased Lake Shore
stock, issuing two thousand of its own
bonds for each one thousand of Lake
Shore stock and also bought the stock of
the Michigan Central issuing $1.150 of
its bonds for each $1,000 of stock. and,
in the recent street railway consolidation
i'll Baltimore some $15,000000 of new
change for the stocks of the several Iii
yisiOnal lines. to the advantage and sat
isfaction of all concerned. The Atlantic
Coast Line Company not long ago issued
S5,000,00 dollars of bonds in retirement
of an equal amount of its own stock.
AT our interview on November 9th,
you told me that you had been informed
that forty per cent. of the business of
the Florida Central and Peninsular rail
road came from the Southern railway.
told YOU that statement was wholly in
correct. The relationship previously ex-
listing between the Southern railway and
the Florida Central and PeniHSulal.
railroad was severed on the tenth of
December last. The earnings Of the
Florida Central and Peninsular for the
week ending December 10Th, and also
for the week ending December BIRD.
show very handsome increase over the
corresponding weeks last year, when the
Florida Central and PeninslIlar
WAS being operated in close ac-
cord with the Southern Rail
way. This is calculated to show
the individual strength of the +. C.. q +.
alone, and when the new line which is
being rapidly finished, which will con-
meet the +. G. & =. and the Seaboard is
open for business, still greater results
will follow.
You comment upon the amount of new
stock of the consolidated company which
it lis proposed shall be paid to the Rich
nond bankers for services rendered by
them in connection with this conSolida-
lion. The allowance made to the Rich
lnond bankers engaged in the consolida-
ton of the greater Seaboard System. for
their services. was approved by each
and every member of the Syndicate. by
whom the compensation was fixed, ald
heretofore given i'm transactions of Simi-
lar magnitude.
The propositions which YOU brazenly
rooms at the Waldorf. and at my office
In New York. / regarded as preposte-
fous; such, for example. as your state
ment that you would not be willing to
agree to any consolidation Of the roads
comprising the Seaboard System unless a
controlling interest II the stock of the new
consolidated company should be placed
tn a voting trust, and that you should be
one of the two trustees. and proposing
that L be the other Your other sug-
gestion was equally ridiculous-that |
should induce my associates to sell out
TO you at cost, and that you and | should
then together reOrganize the system,
and issue twenty millions of new stock
ON the Seaboard System alone, without
the O. & a and II q G. ID onJ J;,1;do mn,