New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-11-30
GRAND TRUNK PACIFIC.

The Grand Trunk Pacific. which is being financed
in part by Speyer & Co. of this city. is to be built
in two divisions. the eastern from Moncton, " b
to Winnipeg. 1880 miles. and the western. from
Winnipeg to the Pacific 1900 miles. Rails are
be standard seventy-fve and eighty pound steel
Contract specifications call for line on a stand
ard not inferior to the main line Of the Grand
Trunk from Montreal Toronto" The western
division IS to be completed by 1911. The eastern
division will be built by the Canadian govern
ment under Grand Trunk supervision The western
division Will he built by Grand Trunk Pacific under
government supervision. When completed. the en-
tire line Will be operated by Grand Trunk. The
eastern division will be leased for fifty years on
rental equal to per cent Of cost, and at the end
of that time the government may extend the lease
operate the road itself At all times Grand Trunk
Pacific comedies a right Of way to other systems.
the government dictates.
Cost is the important thing. To keep II down the
government is lending its credit literally. On the
eastern division ifty-year per cent government
debentures will be issued. Grand Trunk has moth
ing TO do with this financing. The Grand Trunk
Pacific will have nothing to do with the eastern
division until it is ready for operation After that
date for seven years rental will be paid this
seven years interest being paid by the government
a bonus.
The western division which bonds be-
ing sold is divided into two sections. prairie.
the other mountain. On the prairie section the
government will guarantee per cent bonds up TO
70 per cent OF cost not to exceed $4,000 mile
Railway will guarantee Grand Trunk Pacific
Ond mortgage bonds. In Of default the first
SIS will get 70 per cent and the second bonds
% per cent OF net revenue On the mountain divi
sion the government will pay the interest bonds
up to 10 cent of cost not stipulated 70 amount
for the first seven years Thereafter Tor three
years the company will be liable, but no foreclos-
ure will be possible. the accumulated debt being
capitalized and repaid to the government IN per
cent bonds After the years the bonds will be
company bonds guaranteed by the government abb
soueiy. II appears that all western division bonds
be dated the completion OF The property,
equipped and ready for operation When this Is
guaranteed bonds The second mortgage represent
ing additional cost may bear any interest OF the
stock, S20,000O10 may be preferred and S25,OoOO
common The latter goes to Grand Trunk, which
will thus control the new property.
The first step in the carrying out OF this tremen-
project been the enlisIirg of Speyer Broth
ers 70 interest the British investment world The
project has behind it the record of success on Ca
madam Pacific, whose unguaranteed bonds enjoy
splendid credit and reputa ton on tae London mar
ket- The original underwriters Of Canadian Pacinc
will probably be the warmest supporters OF the
new road So far at present Known the w ali
Street market will not be called upon The under
writing will scattered several years, and the
London uarkec Is expected TO take the borus
easily and at good rates