New-York tribune., 1907-06-22
NEW FRISCO BONDS.
TO TOTAL s115, 900, 900.
WM Meet Capital Requirements for
FOrty-fre Years

o. LOUIS d San Francisco Railroad Com
p@'''' "hich Is controlled by the Rock Island
surprised Wall Street yesterday bv the official
announcement of a purposed issue OF S115
00''o'V general lien, ffteen-twenty wear gold
D0hos' with interest not TO exceed : ner con.
suinclenf' II was said TO meet the canital no
ouirements Of the company for the next forty
five years.
q Houce has been sent to the stockholders ~
me st Louis & San Francisco Railroad Com
paAy OF special meeting to be held in Ct
LOUIS on August - to authorize this bond
issue and also an increase of SlOOOO0OO0 in
the common stock, which would bring the total
authorlzed amount of the latter to Sl64 0oO
mere was intention of ISSUING This stool, =
was explained and its authorization yvo,I3 ro
purely formality for the purpose Of conform,
-!4s 10 me laws Of Missouri which Dresorih.
tiiat a railway company shall not have an an
thorlzed Indebtedness in excess of the aItbor-
ized stock 0 0u'Iioi-
OF the purposed bond issue il was anno,nca,
&c Fo',oio'Uuo would be reserved TO retire
oolus ana notes maturing during the next FORTY
HVe years and That only $10000000 in bonds
would be issued this year. the proceeds 10 he
used to reimburse the company for capital e,-
PenollNfes and for future additions improve
pa -Itei-tS ana petterments. The balance OF s3T-
4o-'ovo' II was said, could be issued only after
Qulrements Of the Frisco lines As only 81 125
vco IN notes and bonds are scheduled 10
mature between now and June. 1903 il is evil
uei4t tnat only Sl1s12o,0OO Of the new bonds Will
DC issued during the next two years. and of
these S1.125000 viii be refunding
FOR improvements ana better1nents accord
ing 10 the announcement $2T 1S4. 600 in bonds
are 70 be provided, none OF which is to be issued
until after June l. 1909 the issue then to be
limited to S2,5000OO a year until 1911 end
thereafter to 100000 annually To fund
future equipment trusts $4,000 In bonds IS
10 ne provided, but not 10 be issued until after
June i 1909. and then only to the face value
OF 90 per cent Of such equipment. For the con-
struct'on of new lines S5000000 is TO be pr..-
served 10 be issued only after June / 1909.
This financial plan. it announced. had
been decided upon by the directors of the COM
pany after thorough deliberation, and met with
the approval Of the Frisco and allied banking
interests. 1t explained that the purposed
new issue OF bonds would be secured by a deed
OF trust on and of the railroads and interests
IN railroads, equipment, franchises and property
OF the company owned or acquired here
after through the proceeds of the new bonds
The latter, it was stated are TO be redeemable
at the option Of the company on any interest
date prior to May l, 1922, at 1922 and interest
and also on that date or any subsequent In
terest date, par and interest
The management OF the Frisco lines in stating
that the amount Of bonds which can be issued in
the next two years, except for refunding purposes
IS limited 10 100000 says:
ne
sSo,VC2 per annun' whereas the surplus income
available for dividends for the year ended June
80, 1876. amounted TO S2,309 135 and for the year
enoec June 80, 1907. will amount TO over 100000
The unprecedented development Of the country
served by the Frisco lines during the last two or
three years mas oVertaXed the facilities Of the
company so that Notwithstanding that it has been
able 10 show largely increased earnings yet It has
been unable 70 properly handle all the business
offered. This increase OF business demands cor
responding increase in facilities and equipment.
The directors decided to ask for the approval Of
WI he
object OF providing portion Of the expenditures
necessary for additional equipment terminal and
yard facilities. passing and industrial tracks, ETC.
from the proceeds Of the bonds. The lines 70
be covered by these bonds first lien have now
served by them is SO well developed insure
ample earning power in the future"
Since dividends We're suspended on the second
preferred stock Of the company, and since the
general retrenchment policy a. to dividends
put in force the various lines OF the Rock
Island system, large amounts Of money have
been expended out Of earnings the
pany's various properties for Improvements. In
the fiscal year ended June 30 1905 the St Louis
& San Francisco proper put back into the prop
erty fully S2.3OO,O00. IL the fiscal year which
closes with the current month over $4O0O0O0
Will have been so expended.
The gross earnings of the Frisco for this lat
ter period will show an increase of from sc, 300
600 10 $GJO0OO0 over the previous fiscal year
The outlook for business is good, and if the
company is permitted by the stockholders 10
enabled to make still larger earnings both gross
and net. The territory which most of the lines
serve is capable OF greater development. This
viii increase gross earnings. and If the company
has adequate facilities II can increase its net
earnings proportionately.
A Frisco interest said: I'm considering the
plan the fact should not be lost sight Of for
a moment that only 100000 Of the new
bonds be issued during the next two years
except those which reserved for refunding
purposes. was fully explained in the circular.
Consequently the whole scheme is not large and
formidable. but I'm reality small and simple
Our fixed charges will be increased only the
100000 bonds which It is proposed
issue If the proposition is ratified by the stock
holders except in small way the bonds 10
be issued for refunding purposes. Any further
increase in the fixed charges viii be bonds
TO be issued for additional property or improve
rlents. which in turn will increase the earnings
proportionately."
So far can be learned definite arrange
rnents have been made thus far for underwriting
the new issue Of bonds. AS has already been
pointed out, no part Of the proposed new common
stock viii be issued, and consequently no under
writing IS required for it.