The Bamberg herald. [volume] (Bamberg, S.C.) 1891-1972, 1906-12-20
LINES TAKEN OVER
By Mexican Government Un-
der One Big Company.
HOLDS MAJORITY STOCK
System Will Comprise More Than
Ten Thousand Mi!es-OeaI Was
Financed by Prominent New.
York Bankers,


The details 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 me contract, the
government secures absolute control
of the Mexican Central, the National,
the International, the Inter-Oceanic
and the Hidalgo and Northeastern,
all Of .hich will be merged into one
great railroad system. The govern
ment also comes into control of the
I Texas Mexican, railroad at Laredo,
Texas, which is owned by the Ma
tional The mileage Of the system
will. with extensions, which are rap
idly nearing completion, aggregate sp-
.proximately 10000 miles.
The Tehauntepec National and Vera
Cruz and Pacific, two other railroads
controlled by the government, will con-
tinue to be operated as Independent
scompanies.
A Mexican company, of which ma
giority of the stock will be held Dy
the Mexican government, will be Or
1 sanized with headquarters In Mex
seo, City. The company will issue
its securities in exchange for the Sc
curities outstanding Of the two COM
panies and the new company will ac-
,ouire all the physical property and
government concessions held by the
old companies.
81 So It IS contemplated to create a board
@pf: twenty-one directors to be divided
into "a general board which will re-
side in Mexico, and a focal 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 linn
tied issue of prior lien bonds a. IL
per cent and general mortgage bonds
at 4 per cent. the principal and inter
est OF. the latter being guaranteed by
the Mexican government. s
In addition to the bond issues, the
company will issue first and second
preferred and common stock. It is
proposed to leave an ample reserve
IN cash and securities for future i'm
movement. Development and exten-
sion of the lines of the company and
s for the acquisition of additional roll
ing stock and motive power. The new
company will take over the holdings
ssof the National railroad Of Mexico
and the Mexican International and
santer-O Oceanic railroads, which it will
thus control, as they are at present
IN control, of the National. It is
expected that by a reduction Of the
general. charges, the. elimination Of
s.eompetltion, the economical routing
of freight and by the increased devel-
opment OF the properties, the new
company viii not only be able to meet
4 Its fixed charges, but will earn at
an early date diyidends on It's hrst
and second preferred stock.
The banking houses interested IN
the transaction are composed OF the
firms of Ladenburg. Thalman & CO.
and Hallgarten & co. Of New York.
bankers Of the Mexican Central rai:-
road; Speyer & CO. Of New York,
bankers OF the National lines, and
Kuhn, Loeb & Co, OF New York,
who represent the Mexican Central
security. company, limited, of Lon
don. In addition to this group some
of the largest bankers in Paris, Ber-
3 lin. Frankfort and London are inter-
ested In theb anking syndicate, thus
forming q combination of extraordinary
strength and international scope.