The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1906-12-15
MEXICO CONTROLS
IMPORTANT LINES
Six Roads Merged Into One
Great System
MILEAGE IS TEN THOUSAND
Details of Merger BY Which Govern
ment Takes Most important Rail-
roads-NeW York and For
eign Banks Interested.


tails of the railway merger by which the
Mexican government takes control of all
of the important lines in the republic, are
now known.
BY the terms of the contract the gov
ernment secures absolute control of the
Mexican Central the National, the Inter-
national, the Inter-Oceanic and the Hidal-
go and Northeastern, all of which Will be
merged into one great railroad system
The government also comes into control
OF the Texas Mexican, railroad at Lare-
do Tex, which is owned by the National.
The mileage of the system will, with eX-
tensions which are rapidly nearing COM
pletion, aggregate approximately ten
thousand miles.
independent Companies.
The Tehuantecpec National and Vera
Cruz and Pacific. two other railroads con-
trolled by the government, will continue
to be operated as Independent companies.
A Mexican company, OF which a MAORI
ty of the stock will be held by the Mex
lean government, will be organized with
headquarters in Mexico City. The CON-
pany will issue its securities in exchange
for the securities Outstanding of the two
companies, and the new company will ac-
quire all the physical property and gov
ernment concessions held by the old COM
pany.
1t is contemplated to create board CT
twenty-one directors, to be divided into a
general board, which will reside in Mex
leo, and a local board with headquarters
in New York.
The board in Mexico will consist OF
twelve members and the New York board
of nine
The new company will make a limited
issue of prior lien bonds at 41z per cent,
and general mortgage bonds at per cent
the principal annual interest of the latter
neing guaranteed by the Mexican govern-
ment In addition to the bond issues, the
company will issue first and second pre-
ferred and common stock. 1t is proposed
to leave an ample reserve in cash and
securities for future improvement, devel-
opment and extension of the lines of the
company and for the acquisition of ad-
ditiondl rolling stock, and motive power
The new company will take over the
holdings of the National railroad of Mex
leo and the Mexican National and Inter-
Oceanic railroads, which it will thus con-
troll, as they are at present in the con-
troll of the National.
Reduction of Charges.
1t is expected by reduction of the gen.
eral charges the elimination of competi-
tion, the economical routing of freight,
end by the increased development of the
properties, the new company will not
only be able to meet its fixed charges,
hut will earn at an early date dividends
on its first and second preferred stock.
The banking houses interested in the
transaction are composed of the firms of
La6enburg, Thalmann & Co. and Halgar-
ten & Co of New York. bankers of the
Mexican Central railroad, Speyer & Co.
of New York, bankers of the National
line and Kuhn, Loeb & Co. of New YORK,
who represent the Mexican Central Sc
ourities company, limited, of London. In
addition to this group some of the largest
bankers of Paris, Berlin Frankfort and
London are interested in the banking syn
dlcate thus forming a combination of ex-
traordinary strength and international
scope The National Bank of Mexico VIII
participate in the financial operations.
Negotiations were first commenced by
Pablo Martinez del Rio in February,
With view of bringing the Mexican Cen
tral in touch with the Mexican govern
rlent The project was subsequently dis
cussed by Minister Limantour in New
York while en- route to Europe in May
last and also during Mr.. Limantour s
STAY in Europe.
The negotiations in a more definite
fern became active while Mr.. Limantour
was In New York on his return trip from
Europe. They were finally brought to an
issue in. the last few days during the visit
Of Eben Richards, president of the Mex
lean Central, and personal representa- tive
of Henry Clay Pierce and Walter T. Ros-
en- of the firm of Ladenburg Thalmann e.
Co, representing the foreign bankers.