The San Francisco call., 1904-11-03
SHORE
HARD PRESSED
Railroad Company Fails to
Pay Amount of Semi-An-
nuaI Interest on Its Bonds

The finances Of the North Shore Rail-
road, which recently passed to the con-
troll OF A w. Foster. president OF the
California Northwestern. are In bad
shape Yesterday 1t became known
that the compan- had defaulted In the
payment Of it's senii-annuaI installment
of interest on its bonded Indebtedness,
which was due the previous day. Lo-
cal financiers are speculating as to
what action the bondhOlders win take
A W. Foster, who succeeded John
Martin as president OF the road. ad-
mitted yesterday that the interest had
not been paid, and was unable TO say
what move the officials OF the com
pany would make, but he did not give
evidence Of any great uneasiness.
The amount due the bondholders is
sS7. 800 representing the semi-annual
the latter being protected by a mort
gage on the cOmpany'S property. held
in trust by the Mercantile Trust Com
pany of this city for the Eastern syndi-
cate that furnished the money for
financing the railroad project Presi-
dent Foster admits that the North
Shore has been unable to meet its OBJ
legation
He remarked that he ala not think
that the bOudhOlders were worrying.
however. for no calls had been made
on the company's treasurer for the
amounts due them. When asked II he
was prepared TO state when the COM
pany would likely be able to pay the
interest President Foster said:
really do not know when we can make this
payment. The truth Is We have been strug-
Cling along. and the company has not. made
the law have six months in which 20 pay
the interest before the bondholdsrs can fore
Is Strengthened out. but am hopeful OF over
coming the financial difficulties. At present.
sufficient TO meet the operating expenses Of
the company.
That the North Shore road was IN a
bad way has been a matter OF general
knowledge for some time in the local
financial world, and this fact Is sup
posed to have prompted the John Mar
tin syndicate to undertake the dis
pOsal OF the road. It was first offered
to the Santa Fe Company, which re-
fused 1t on the ground, as stated by
Captain A. H. Payson, assistant to
President Ripley. that the price de-
manded by the Martin syndisste was
200 high Later John Martin went
East and shortly after he left this
city II became no'Sad around that he
was trying to float the road on The New
York market. Meanwhile several OK
the original combine which pun chased
the road from the North Pacific Coast
Company withdrew from the North
Shore Company and the financing OF
the corporation devolved mainly on
John Martin and Eugene de Saba
A deal for the transfer of the road
to Foster was effected in August last
and Immediately after he succ5eded
Martin as president and selected a new
board Of directors, the members Of
which are his personal friends.
Although President Foster persistent
ly denied that the Southern Pacific or
any other big corporation was behind
him in the requirement Of the North
Shore road, the local hnanciers were
strongly inclined to- favor the. story
Of the street that Foster was merely
acting for e. H. Hartman. Yester-
days default, however, would suggest
that the Hartman syndicate. is not
connected with the deal. for II Is ar
gued that Hartman would not have
permitted the credit of one OF his cor
porations to be discredited by de-
fault in the payment of interest to
bondhOlders.
The officials Of the Mercantile Trust
Company declined to make any stare
ment regarding the failure Of the road
to pay its interest. A prominent banker
volunteered the statement that he was
sure that President Foster. who stands
high in the regard OF local banks. will
be able to get out Of his present trOu-
bles with the North Shore. OF the out
standing bonds it was explained that.
S2,500,0OO, while nominally first mort
gage bonds, cannot be fOrecIOsed until
the prior claim Of the first 81 600 900
has been paid.