The Newark star and Newark advertiser. [volume] (Newark, N.J.) 1909-1909, 1909-10-18

Especial to the Newark stas.l
PHILADELPHIA, Oct. 1S.--rt was
learned today that the Pennsylvania
Railroad Company, besides issuing not
less than $sO,00O,O0o and not more than
$1o0,00o.o0O in a short time to pay off IT'S
next years debt, is to start on record
breaking race for tonnage that will sur
pass in magnitude anything similar ever
attempted by any railroad
The issuing of the new stock will be
the greatest financial operation of 1909.
1t will involve the method by which
$50, 600, 900 Of per cent. notes maturing
in March, 1910. and s20,000,000 of 9 per
cent. bonds maturing in July, 1910, shall
be paid off and retired.
The directors of the company are nov
out upon their annual tour OF inspection
and upon their return. when the Nc
yenber dividend is acted upon, the fos-
NAL announcement of the new stock a.
lotment Is expected
What the $4,000 shareholders and the
great army of bond owners of the coiti-
pany wish to know is the price at which
the new stock will be offered Officials
themselves are known to differ widely
In their opinions. Some of them wish
to sell the stock to shareholders at par.
or $50 q share. Others hold to the poll
icy of selling 1t at $50 share, as was
done In 1901 and again in 1903. Still
others advocate a compromise of sos
share.
AS the current price for Pennsylvania
is s74 a share it is seen that the COM
pany could easily dispose of It's big
new issue at $50 a share The whole
question reduces itself to this: Would
it be good financial policy for the COM
pany to sell say sS0.00000O of stock az
premium of $4,000, 900, or would II 20
in the long run better to let the bb,o01
shareholders have the benefit of the
| company's splendid credit and get a
standard stock at it's facetvaluef
A survey of what the company has
done in the past decade will help to
answer this question Since A j. Co..
satt become president the Peunsyl-
yania's outstanding stock has risen
from S151 900, 900 to 1915, 100000. DURING
the same period the funded debt was
Increased from s119,00o,OOO to $780, ,ooo,-
600
| This has been the Pennsylvania .
decade of greatest expansion and con-
struction. 1t has four-tracked the main
artery of its huge system for 44b mites
and laid down what amounts to an ifl-
dependent double track freight line for
that distance,
1t has spent perhaps $100,0o0.000 on
its Hudson terminal and tens of mill
| ions upon terminals in Philadelphia
and elsewhere,
In the meanwhile it has acquired Sc
curities in other railroads and in steet
mills which cost many millions more,
but which are today worth vastly more
than they cost.
During this grand decade of expan-
| sion and construction the compa ny
was obliged to get its capital as cheap
ly as possible. That meant that it was
obligated to sell it's stock and bonds
which are convertible into stock at the
most advantageous price for the COM
pany
While the Pennsylvania has paid
from 5 to per cent annual dividends
during these ten years, 1t didn't cut
melons like some other companies.
which have sold per cent. dividend
paying stocks to their shareholders at
par, making the privilege to buy them
very valuable.
At the present time the Pennsyi-
vania's business Is abreast of its rec
ord-breaklng traffic in the first half OF
1907. The large order for steel rails
for 1910 delivery Is positive evidence
that President McCrea and his official
family look for still greater business
next year. And they are admirably
prepared to handle it.
In the race for tonnage during the
next five years and in the ability to
carry it economically no other railroad
occupies today so strong a position as
the Pennsylvania. This is true on ac-
count of the stupendous sums OF
money spent in improving and equip
ping the lines.