Evening star., 1902-08-29
Refuses to Dissolve Voting
Trust of Southern R. R.
ASKS STOCKHOLDERS
FOR FIVE YEARS CONTROL AND
PROMISES ADVANTAGES.
Scheme Means Ultimate Consolidation
ern Securities Company.

A circular issued to the stockholders of
the Southern railroad yesterday by J. Pier
pont Morgan, Charles Lanier and George
F. Baker, the voting trustees of that road,
requesting that the present voting trust be
extended for another period of five years
or until October Is, 1907, confirms the re-
cent reports that have been in circulation
regarding a Southern railway merger
In effect, Mr.. Morgan tells the stockhold-
ers of the Southern that it is his intention
to retain control of the road, and 1t Is the
general opinion that he will succeed. In
this he asks that the stockholders concur.
1t Is believed that Mr.. Morgan can perfect
his plan for a Southern Securities Com
pany if he is given control OF the Southern
for another five years. This securities com
pany would include the Seaboard Air Line
the Louisville and Nashville and the South
ern railway, with a possible connection of
the Illinois Central for western feeder
What the Deal Means.
The circular issued yesterday is regarded
as the first official information of Mr. Nor
gan's Intentions to combine the railroads
of the SOUTH This circular, after reciting
the provisions of the voting trust of 1894
adds:
ION April Is, 1902 the company paid a
semi-annual dividend Of 21s per cent upon
its preferred stock. If the dividend soon
to be declared, payable in October, shall
be at the same rate one Of the conditions
OF the said voting trust agreement, limit
ing the period thereof, will have been full
filled, and under that agreement, unless it
be extended, the holders of both common
and preferred stock trust certificates will
be entitled, after payment of such divi-
dend, to have certificates for stock of the
Southern Railway Company delivered to
them upon surrender of their respective
stock trust certificates therefor The GER
t1hcates for actual preferred and common
stock OF the company would thus be is
sued and dealt in in the market, making it
possible for the control of the company to
be bought and sold from day to day and
rendering Its policy and management sub
ject to sudden and surprising change.
Holders OF large amounts of preferred
and common stock voting trust certificates,
recognizing this danger, have requested the
undersigned to propose an extension of the
voting trust agreement, and have suggested
that, pending an ascertainment Of the
WI wishes OF the stockholders on the subject,
the board Of directors should postpone until
the September meeting their determination
as to the amount Of the October dividend,
for 1t might well be that while dividend
at certain rate could be conservatively
paid under continuance Of the existing
administration the board might feel hesi-
tation in declaring SO large a dividend IL
stability in the control and management
the termination Of the voting trust Ac-
cordingly the board has postponed fixing
the rate of the dividend In order that the
stockholders may have an opportunity of
indicating their wishes regarding the con-
tinuance of the voting trust, so that the
board may have the entire situation before
them in reaching their conclusion as to the
rate of dividend to be declared.
Dangers Revealed.
1.-THE events Of the last eighteen months
in connection with railroad properties have
revealed the danger to which corporate
properties are exposed Of the control of
their stock being bought up in the market
by purchasers not identified with the prop
erty or permanently interested in it's de-
velopment and Improvement. Therefore, we
do not hesitate to state that, In our opin-
ion, it is decidedly for the interests of the
stockholders Of the Southern railway to
protect their property by an extension Of
the voting trust until negotia tions now
pending for the further development and
strengthening Of its lines shall be settled
beyond any risk Of being overturned, and un-
til the completion Of other negotiations now
pending In relation to transportation inter-
ests in the southern states which have an
important bearing upon the interests of the
Southern Railway Company.
ut is scarcely necessary for US to state
that in bringing this matter to the atten-
tion OF the stockholders we have no desire
to ourselves continue the responsibilities
Of the last eight years: at the same time
we have felt that under the circumstances
1t was our duty to make this statement
leaving 1t to the stockholders themselves
however, with full knowledge Of all the cir
cumstances to determine what shall be
done"
Holders of stock trust certificates for
both preferred and common stock Of the
Southern Railway Company are asked to
present their certificates at the office Of ].
+. Morgan & Co. on before September
10 and have them stamped as asserting to |
the extension Of the voting trust. This ex-
tension will continue Mr.. Morgan in full |
control Of the property.
What Morgan Has Done.
During his management since 1894 the |
operating mileage of the road has been in |
creased from 1891 to 8,765 miles; the in |
crease being 2,374 miles of main trackage |
and 76S miles of track spurs and sidings. |
The gross earnings of the road for the year |
ending June 30, 1902, were $37, ,712, ,24S, be- |
ing an increase Of $40 597 456 over the gross |
earnings Of the road for the year ending |
June 30, 1895. This is an increase Of over |
10 per cent in the yearly gross earnings |
of the company. The net income of the |
road for the 1895 year was 1896, IA, while |
Tor the year just ended the net income i
above fixed charges was So, 800 S97 which |
Is an increase of over 300 per cent The |
circular concludes with this statement:
During the same period large sums have
peen expended and charged against income |
for the Improvement Of the property and |
equipment in order to increase the operat- |
ing efficiency without adding correspond
lngly to the capital account. On June 30
lsoZ there was standing to the credit of |
pront and loss $3.50, 1874. .Ss, being the
amount OF accumulated net income to that |
date on hand in cash or cash assets
The physical condition of your COM
panys property and equipment has been
greatly improved. and is now in a high |