Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1902-05-27
TWO GERMAN lines N
Basis Upon Which German
Steamship Lines Joined the
Big Merger.
May Extend Business OF the
Companies Now Operating
the Ocean Vessels.
Agreement to Extend for Twen-
ty Years is Subject to
Revision.

London, May 27-Tha Shipping Ga
zette today publishes the following
particulars of the agreement between
the Morgan steamship syndicate and
the two German steamship companies,
each of which has or will have at the
date of the ratification of the agree
ment a, capital of S0,OOO,000 marks, or
$4,000, 900.
Each of the companies agrees to pay
to the consolidated company during
each year in which the agreement is in
$5,0OO.O00, such payment to be at the
same rate as the dividend paid by each
steamship company to its shareholders
for the year in question. The CONSOLE
GATED company agrees on it's part to
pay each year to each of the steamship
companies dividend OF per cent on
a corresponding sum of $b,00o,0OO, but
the money to be paid or received by
either party is not to be taken into ac-
count in determining the rates Of divi-
Gend to be paid by the undertakings
concerned.
There is also an arrangement where
by il the capital of the North German
Lloyd and Hamburg American compa-
nies is increased beyond the present
limits this part of the agreement shall
continue to apply to one-fourth of the
total capital of each company.
Last year these two German steam
ship companies paid 6 per cent on their
share capital. 1t will be seen that in
future the consolidated company prac
tically guarantees the maintenance of
that dividend on one-fourth of their
capital and not on the whole, as has
been alleged. On the other hand, as
soon as the dividend of either company
exceeds per cent, which it is reasona-
bly, anticipated will be the case when
the combination introduces economy
into the North Atlantic service, the
consolidated company will be entitled
to one-fourth of such excess of diyi-
bends. There is provision whereby
this arrangement will become open to
revision if for given period the aver
age dividends fall below certain point.
The agreement is for twenty years, and
is thereafter subject to two years no.
tee: but there is y provision for re-
vision, If either party wills it, at the
end of ten years.
An important point is that the con-
solidated company undertakes not to
hold shares in either of the two steam
ship companies without it's consent.
There is a provision, however, that if
interests antagonistic to those now con-
templated by the management should
attempt to obtain control, the CONSOLE
dated company shall be free from it's
obligation in this respect. The prin-
ciple of community of interest is par
italy established by clauses relating to
dividends and is carried further by pro-
visions designed to prevent friction in
working. These contemplates the ap-
pointment of a joint committee, on
which the consolidated company is to
be represented, to deal with the future
organization of the two companies,
which will assist each other in any con-
troversy with outsiders in competition
with them.
There are provisions which aim at the
steamers of the two companies and of
the consolidation being available for the
needs of either Of them as the eXigen-
cies of trade may require, the intention
being to assure the profitable employ
ment OF the several fleets.
To English readers, the clauses deal
ing with the future competition of Ger
man steamers at English ports will be
of special interest. Generally speaking,
they provide that existing spheres of
action shall be adhered to. The con-
solidated company agrees not to send
it's steamers to German ports, and the