Deseret evening news. [volume] (Great Salt Lake City [Utah]) 1867-1920, 1906-12-15
Mexican MERGER
Of RAILROADS
government Takes Control Of All
The important Lines in
The Republic.
TERMS or CONTRACT KNOWN.
,,o.,cnn Central, the National. the In
ternatlonnl the Intcroceanlc and
other Lines Are Included.

o,.. Of Mexico. Dec. 1.-THE de-
,s If the railway merger, by which
w. ueSlcan government takes control
y al Of the important lines in the re-
nnbllc are now known.
py the terms OF the contract the gov
,nont secures absolute control or the
,,s,Ican Central, the National, the In
,orrational, the lnteroceanic, and the
gIdalgo and Northeastern, all of which
III, he merged into one great railroad
..,,em The government also comes
,S,o control of the xas-Mexican'
,alIroad at Laredo, Tex.,which is owned
No the National. The mileage Of the
s,s,em Will, with extensions which are
.,nldly nearing completion, aggregate
approximately 10000 miles.
The Tehuantepec National and Vera
crnz and Pacific. two other railroads
controlled by the government, will con-
,lnue to be operated as independent
companies. - ,,h,.h
ma iOrity or lne sloch WIN W "SiN ~
The Mexican government, win pc or.
sanized with headquarters IN Mexico
INV. The company VIII issue It's Sc
rurities in exchange for the securities
e,standinR of the two companies and
,SS new company will acquire all the
Sbvslcal prOperty and concessions held
ne The old companies. 1t Is contemplate
si 10 create board of 81 directors, to
no divided into a general board which
Stl reside IN Mexico ana local board
Win headquarters In New York. The
hoard in Mexico will consist of IL mem
Ssrs and the New York board OF nine
THE new company will make a lin
nod issue of prior liens at Az per
cent and general mortgage bonds at
1 ner cent. the principal and interest
n the latter being guaranteed by the
uayican government. In addition TO
me- bond issue the company will issue
erst and second preferred and common
aock II is proposed to leave an am
N reserve III cash and securities for
hnire Improvement. development and
s,tension of the lines of the company
ana for the acquisition of additional
pTing stock and motive power. The
nav company will take over the hold
jpcs Of the National Railroad of Mexico
and the Mexican International and In
teroceanIe railroads, which 1t will thus
control, as they are at present In the
control of the National. II Is expected
mat by the reduction OF the general
charges, the elimination Of COMPETE
ton. the economical routing Of freight
AMI by the Increased development OF the
properties the new company will not
only be able TO meet It's fixed charges,
but viii earn at an early date dividends
on It's first and second preferred stock.
The banking houses interested In the
transactions are composed fthe firms
of Ladenburg. Thalman 4 Co.. and
Haligarten g. Co.. of New York, bank
ers Of the Mexican Central railroad;
Spiar 4 Co. Of New York, bankers OF
he National Loans; and Kuhn, Leob &
@. of New York, who represent the
Rxcan G ntral Security company, linn
nd, of London. In addition to this
n0up some of the largest bankers of
Paris Berlin, Frankfort and London
DE interested In the banking syndi-
ate thus forming combination of
Extraordinary strength and interna-
0nal scope. The National Bank OF
llexico will participate in the financial
tperation.
NEGOTIATIONS were first commenced
by Pablo-Marinez del Rio, In Febru-
sry with a view of bringing the Mexi-
can Central in touch with the Mexican
gtyernment. The project was SUISSE
gently discussed by Minister Imam
hur while enroute to Europe In May
last and also during Minister Llman-
tours stay In Europe. The negotia-
ions In more definite form became
active while Mr.. Limantour was In
New York on his return trip from
Europe. They were finally brought to
an issue i'm the last few days during
the visit Of Eben Richards, president
N the Mexican Central, and personal
representative OF Henry Clay Pierce
ana Walter Il. Rosen. Of the firm of
Ladeuburg, Thalman & Co., represet-
ag the foreign bankers.
MEXICO CITY, Dec. 1i.--1n speech
leiore congress tonight Minister of
finance 1imantour explained the rea-
son for the railroad merger just con-
slmmated by the republic He de-
cared that If this step had not been
taken, the great railroad lines OF the
United States would have absorbed
The properties. This, he explained,
would saddle onto the Mexican peo-
PIE one Of the great trust evils suf-
Tered by the United States He gave
as the two other chief reasons for the
gogcrnments action assertions that
lhe merger would avoid friction be-
tween the Mexican Central and the
National lines. and the prospect Of
realizing conalderable economics
through the consolidation. He MAIN
@lned that the government was fore
to the merger by the aggressive
attitude of certain railroad systems
u the United States