The Scranton tribune. [volume] (Scranton, Pa.) 1891-1910, 1900-04-27
UNIQUE SINKING FUND.
Stock and Bonds Retired as Coal
Fields Grow Nearer Exhaustion.
From the New York Sun.


The method adopted by the Delaware
and Hudson company to offset the
gradual exhaustion of its coal mines Is
an innovation in railroad MANAGEMENT
1t practically amounts to a systematic
winding up of the affairs of that COM
pany, and 1t reduces year by year the
amount of stock on which dividends
are to be paid. Two thousand shares
or more of the stock is to be bought In
by the company and cancelled. This
action is taken under a resolution
adopted by the board of directors,
which provides for the establishment
of a sinking fund by "the gradual re-
tirement of stock and bonds of the
company contemporaneous with the
mining and the sale of it's coal"
Beginning with the year just closed
the Delaware and Hudson company
will credit upon its books a sum equal
to not less than five cents for every
ton of coal mined by the company dur
ing each year from lands owned or
controlled by 1t. These sums are to be
charged against the profits for the
year" The resolution of the board
further provides for the investment Of
the sinking fund in the securities or
stock of the company, and that 1.-The
same shall forthwith be retired AMI
cancelled"
The quantity of coal taken out of the
Delaware and Hudson companys mines
each year is about 100000 tons, and
according to the estimate made by Off
GERS Of the company the supply will
not last longer than fifty-fve years.
limited the period of the supply in the
Delaware and Hudson's mines to thirty
years. In pursuance of the plan adopt
ed the Delaware and Hudson company
has already bought and cancelled 1000
shares of its stock. This purchase re-
qured about s229,OO0, and the outstand-
ing capital stock of the company is
S34 100000 rs against $35, 000, 900 a year
ago.
This retirement of stock is not lim-
| tied to five cents a ton on the coal out
put. 1t may include any amount that
the managers of the company may
| deem expedient. And at any meeting
| of the stockholders the rate of retire.
ment may be increased from five cents
| to six, seven, ten or any figure that
may appear desirable. This uniaut
sinking fund arrangement provides ar
| actual preventive against dry rot
AS the Delaware and Hudson com.
pany approaches the end Of its re.
sources it's Capitalization will be com.
mensurate with it's available assets
and those assets will be sufficient tc
satisfy the just dues of the remain.
ing stockholders.
When all of the coal in the mines Z
exhausted some miles of railroad vii
remain in the possession of the com
pany. A sufficient amount of capital
ization will however remain to repre-
sent this property. The Delaware anc
Hudson system now includes about 81,
hundred and seventy miles of railroad
OF this mileage the company owns les
than two hundred miles. The remain
ing lines are leased and their ultimat,
future will probably be decided by tn,
Vanderbilts, who are already holders
of considerable amount of the stool
| of the Delaware and Hudson In hi
| last annual report President Olyphan
says: You will note with pleasure tn
improved results on the leased lines
| This is particularly gratifying with re
spect to the New York and Canada
where the revival of the iron industr,
has increased the earnings to a poin
which enables that road to show bal
ance over its fixed charges