The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-01-30
Northern Central SharehOld-
ers in Expectant Mood.
WAIT COMMITTEES ACTION
Pennsylvania Railroad Takes Sig
niheant step Before Swallowing
the Subsidiary Line-AppOints "a
Committee "tO Devise More Per-
mAnent Operating Arrangement"

Baltimore, Jan. 29.-Stockholders OF the
Northern Central Railway see in the ap-
poiutment Of a committee, consisting Of
Michael Jenkins, chairman; Henry Wal
tors. and Norman W. James. all Of Bal
tmore. and A. LoUden Snowden, Samuel
Rea, and Henry Tatnall, all OF PhiIadeI-
ph!a, TO devise plan for a more perma-
neut operating arrangement OF lease Of
that line 70 the Pennsylvania Railroad,
8 step in the. direction Of reimbursins
them for permanent improvements paid
for out OF earnings, instead OF charging
them to capital account.
The Northern Central Railway affords
the Pennsylvania Railroad Its direct
route from the West TO Baltimore. It
also makes an important link IN the line
between Philadelphia and Erie, and gives
the Pennsylvania Railroad its only direct
access 70 the Lykens Valley and Shame
kin anthracite coal fields. Further than
this, the Northern Central carries the
Pennsylvania Railroad system north from
Wilnamsport 10 Elmira. and so through
New York state 10 Sodus Point. on Lake
Ontario.
Has AS Miles of Track.
The operated mileage Of the Northern
Central Railway. including main line and
branches, is AS miles The company has
valuable terminals a. Baltimore, including
the union passenger station, and owns
and shares with the Pennsylvania Rail
Il g--g--E-. 40 ~
at Enola and Fairview, west OF the Sus-
Quehanna River. Just above Harrisburg.
OF the s19,342,550 Of Northern Central
stock, the Pennsylvania Railroad and al
He'd interests own s10.557, 200. or a per cent.
the minority interest being represented
by about 800 stockholders. From what
IS learned, the plan contemplates having
the Northern Central make a % per cent
stock dividend 10 capitalize part Of about
S. 90 surplus earnings which have
been put back into the property during
the last nine years.
This IS 70 be preliminary 20 lease.
The Pennsylvania Railroad interests has
sounded the Northern Central minority
stock interest as 70 whether such a stock
dividend. to be followed by a lease Of
the property for 999 years at a rental
guaranteeing dividends al 5 per cent Per
snnum, the same as are now paid on the
smaller capitalization, would be accept
able.
Minority shareholders feel that the rate
should be not less than 10 per cent The
Northern Central committee named 10
negotiate the desired deal is so obviously
dominated by the Pennsylvania Railroad
interest that II is entirely probable that
the minority interest will get together on
its own account and urge the value Of the
property which the Pennsylvania Rail
road wants virtually as its own.
Within a few days. determined and in
teIligent fighting by minority stockholders
OF the Delaware Railroad resulted IN get
ting the Pennsylvania Railroad interest
which controlled that property TO agree TO
a 20 per cent stock dividend and a % per
cent cash dividend, 20 be followed by a
lease giving s per cent dividends. The
initial suggestion from the big company
was a 100 per cent stock dividend and a
lease at 3 per cent
II IS understood that the committee will
complete its recommendation in time for
submission to the stockholders At their
annual meeting on February o. The
Northern Central IS the greatest money
maker Of all the Pennsylvania Railroad
subsidiaries. It's surplus earnings in or
binary years are about twice the sum re-
quired for paying the annual dividends OF
S per cent on the Sl9,3i255O capital stock.
and besides its treasury assets are con
servatively valued at more than 100000
although they are carried on the books
at only $1,000 COO