The morning news. [volume] (Savannah, Ga.) 1887-1900, 1900-02-22
THEY DON'T LIKE THE PLAN.
HOLDERS OF CENTRAISs INCOME
BONDS DISSATISFIED.


Charged to the Operating Account.
Holders of the First, second ana
Third Preference Income Bonds
Think This Money should Have
Gone to Them.
Copies of a prospectus have recently
been received In the city issued by Mr..
w. A. C. Even, New York stock
broker, who was prominent in the reor-
ganization of the Central, in which he re-
views the annual report of the president,
and lays special stress upon the point
that the failure of the company to show
larger net earnings for the last year was
due to the fact that a very large amount
of the earnings was used in the purchase
and building of additional lines of road,
the making of other improvements and the
purchase of additional equipment.
The payments for the Bruton and Pine
ora Railroad are specifically mentioned as
having been made from the operating ac
count, together with the completion of
twentynine miles of new road and the adj
dition of considerable equipment. It also
stated that THE company is building
forty miles of additional road from Reg
lister to Pineora, which will doubtless be
paid for similarly, and thus swell the oper-
ating expenses during the present year.
The grading for large part of the new
mileage was practically finished some
years ago, so that the present company
had only to furnish the superstructure to
complete the same. The policy of the
management in thus paying for the extern
sions out of earnings instead of issuing
bonds and thus increasing fixed charges
is to be commended"
The decrease in the income of the Ocean
Steamship Company for the years 1898
and 1899 is explained by the statement that
100000 was deducted in these years to Gre
ate fund to improve the ships and for
new construction work on the wharves at
Savannah and Hoboken, N j.
The statements contained in this circu-
lar have set some of the Savannah holders
of the income bonds to thinking, and
they are figuring that if the 100000 to $780,,
600 a year which the management of the
Central has been taking out of its earn
ings and charging 10 the operating ac>
count in order to in1rease its mileage and
otherwise increase the value of the prop
erty, had been devoted to paying the in
terest on the income bonds, as they think
it should have been, not only would the
first preference bonds have received their
full 5 per cent. for these two years, but
that the second preference bonds would
also have received something, and that the
market value of all three lines would have
been very materially inkFeased The in
formant who called the attention of the
Morning News to the matter said that the
subject was being looked into, and that
steps might be taken by the holders of
the bonds to ascertain their legal rights
in the matter.
Vice President Esan, when seen yester-
day, admitted that it rs one of the posi-
bilities that the Central may obtain a Sec
ond line to Macon by the extension of the
Bruton and Pfneora Railroad, as outlined
in yesterdays Morning News. No active
steps are being taken in this direction at
present, however the only work in prog
ress on the Bruton and Pineora line being
the rebuilding of trestles and bridges ana
otherwise putting the track in good shape
for business.
ut is only thirty miles from Register,
the present eastern terminus of the Bru-
ton and Pineora Road, to Pineora, on the
main line of the Central" said Mr.. Egan.
ut is not unlikely that this will be com
pleted at some future time"
Whether this work will be done this year
Mr. Egan said he was unable to say. AT
Bruton the Bruton and Pineora connects
with the Wrightsville and Tennille Rail-
road, which bisects the Central at Tennille
and is controlled by the latter company.
Mr. Egan was asked if the Bruton and
Pineora would be continued to Oconee. on
the main line, or whether the Central
would operate over the Wrightsville and
Tennille to Macon.
1--WE may do both" he replied. "Should
the idea OF having a second line to Ma
con be carried out, the extension to Oco-
nee would come in time as a matter of
course The idea is not bad one. The
runs tbrnnph a cT1lp
did territory which would be developed
by improved railroad facilities
Mr. Egan's attention was called to the
point which the holders of the preferences
income bonds are making to the effect
that their interests are being sacrificed for
the benefit of the property at large by
extending lines and making large inn
provements, which are paid for out of
the net earnings and the expenditures
charged to the operating account
TT is true that the operating account
was larger than usual last year." he r -
piled 1.-THE extensive improvements to the
terminals of the Ocean Steamship Com
pany are practically completed, however,
and the expenditures on this account will
not be so heavy this year. A number of
other improvements, which were needed,
were made. These must necessarily re-
suit to the benefit of the property at large
and hence to the holders of the income
bonds along with other security holderS.'
While the holders Of these securities will
doubtless admit that the improvements
which have been made will rebound to
the benefit of the company they are in
clined to think that they are not receiv-
ing a fair deal in the matter. The fact
that the Bruton and Pineora Railroad is
being paid for and extended out of the
net earnings Of the company, thus de-
creasing the amount which might be used
10 nay dividends on the income bonds,
is the point which particularly sticks. They
figure out that had the earnings of the
company not been diverted for this pur-
pose they would have received much larg
er dividends and Their securities would be
worth much more on the market than
they are to-day
When the reorganization OF the
Central of Georgia was effected from the
remains of the old Central Railroad and
Banking Company, the holders of the
debentIres OF which there were several
million dollars outstanding, were given
first and second preference income bonds,
while the stockholders of the old company
%, H.. A.