The San Francisco call., 1909-07-14
OCEAN SHORE
REF|NANC|NG
PLAN READY
Scheme Provides for IncOrpOra-
ton of New Company With
SI5,OOO,OO0 Capitalization
Road Will Be Completed to
Santa Cruz at Once if the
Project Is IndOrsed

organization and reinsncing of the
Ocean Shore railway. concerning which
annOuncement was made exclusively by
The Call last week. were given out to
the bond holders of the company yes
terday by President J. Downey Harvey
and a committee of disinterested busi-
nessmen who have recommended the
carrying out OF the project.
The acceptance Of the proposed plan
BY the bond holders. many of whom
have already signifed their approval
Of the proposition. will result in the
immediate completion of the Ocean
Shore road between this city and Santa
Cruz, the purchase OF sufficient equip
ment TO put the line in operation with
out delay. the retirement of all bonds
outstanding at present and the wipinz
out OF all floating Indebtedness. The
committee Of financiers who have an
proved and recommended the proposed
plan Of friendly reorganization consists
Of Homer S. King. Henry T. Scott J.
D. Grant, Charles Sutro and William
J. Dutton. none OF whom has any per-
sonal interest in the road.
INCORPORATE NEW COMPANY
The proposition submitted to the bond
holders calls for the Incorporation Of a
new company TO be known as the San
Francisco and Ocean Shore railroad.
with a capitalization of $4,000 Oo0
equally divided between preferred and
common stock. A new issue OF $500
GOO Of first mortgage 80 year gold bonds
10 be used for immediate construction
and equipment purposes is provided for.
In addition to this there is proposed a
$4,000, 600 issue Of consolidated mort
gage so year bonds at per cent, of
which SS.5oo,oeO will be reserved to re-
tire the first mortgage bonds, and of
which $5,000.O0O win be exchanged for
the existing bonds Of the ocean Shore
railway. The remaining consolidated
mortgage bonds. amounting to s6,5oo.-
ooo viii be held in reserve, under care
fully guarded restrictions. for future
extensions and improvements.
The consolidated mortgage bonds will
be a lien on ali property of the San
Francisco. and Ocean Shore railroad
subject to the $s.5OO.OOo of first mort
gage bonds. and as an equivalent num-
Der Of consolidated mortgage bonds are
reserved for the purpose of retiring
the first mortgage bonds at such times
as il can be done advantaeeousIv. the
consolidated mortgage bonds will even
tusIly be first mortgage on all the
property Of the company.
BIG SUM IN TREASURY
When this plan OF financing is car
ried out the San Francisco and Ocean
Shore railroad viii have in its treasury
ss,5oO,Ooo of first mortgage bonds.
which it Will be able to use in any
manner that may be deemed most de-
sirable by the board of directors. The
security viii be sufficiently adequate
10 enable the company to procure i'm
mediately enough funds to pay off the
real estate mortgages on the present
terminals and complete the road from
San Francisco to Santa Cruz. to pft IL
IN frst-class shape, and TO purchase
sufficient equipment to enable II to
handle all the business which may be
offered
The Mercantile trust company of
san Francisco has been appointed bv
the committee as the depositary TO re-
ceive deposits Of the Ocean Shore rail-
way present bonds. TO be exchanged
for the San Francisco and Ocean Shore
railroad consolidated mortgage bonds.
Bond holders may deposit their bonds
81 any time prior to September 10. 1909.
and viii receive therefor a negotiable
receipt which shall call for the delivery
TO the holder Of an equal amount of
the consolidated mortgage per cent
bonds, prior TO March j, 1910.
Tentative negotiations have already
been entered into with well known
banking houses for the purchase Of
the new bonds, and a sufficient sum
has already been assured to make the
carrying out Of the plans a certainty
in the event that the proposition meets
with the favor of the present bond
holders. Many local banks have ar
ranged to take up large blocks of the
new bonds. one bank alone having an
nounced its intention of investing
$lOOo.OOo. Eastern capitalists have
also been interested in the reorran;za.
ton through the report of the enof-
neering firm of J. G. White & q
made after a athorough Investigation of
Ahe ocean Shore properties and are
ready to advance funds as soon as a
new bond issue is authorized ana t,,a
reorganization Of the company effected
SHORT GAP TO FINISH
The Ocean Shore road has been con
seructed Tor SO miles south from San
Francisco and for IL miles north frana -,~,,
santa Cruz, leaving 2615 miles Of tn,or1
meoiate road still to be constr,,ot,z
u miles of which is graded and raa,s.,
Tor track. It is estfmafe6 b,, a..
engineers that Ss50.00O will he nao,sas
10 complete the road and that s5oe 200
VIII be necessary for equipment les,,1
ing substantial balance of tha 49,
posed $500, 600 first mortgaea ho,sS
issue for the taking up of ontions 20
purchase on terminal property in tb;s
city and Santa Cruz and for the vinIn =
out OF the present floating indebted,
ness
The net earnings for the first wear
after the road is put in operation al
lowing for operation and maintenance
expenses, are estimated at $3.50. 600 with
a steady increase year by year. Fol
lowing the completion Of work on the
main line between San Francisco and
Santa Cruz il is expected that mart
Of the authorized consolidated mort
gage bond issue viii be devoted to the
extension OF branch tracks into the
Richmond district in this city and into