Evening journal., 1910-01-21
TERMS TO CUT
R. R. "MELON''
What the Delaware Road
Special Committee Recon-
mendS as to Lease
WOULD SPEND MILLION
IN IMPROVEMENTS

Stockholders Of the Delaware Railroad
Company have received copies Of the rec
concentrations OF special committee OF
the directors. which have been approved
by the directors themselves, and which
Will be acted on by the stockholders on
February l5 providing for a seventy per
cent. stock dividend, and a twenty per
cent. cash dividend contingent upon
perpetual lease being made Of the Della
ware Railroad to the P.. y. and w. Rail-
road Company that will guarantee eight
per cent. dividend annually on all the
stock. The special committee OF Pennsyl-
vana railroad directors that made this
recommendation is composed OF Samuel
Rea, William w. Lobdell. Samuel Ban
croft Jr William r. Watson and James
j. Ross. Accompanying their recommen-
dation Is letter from James McCrea,
president OF the p. b. and w. Railroad
Company in effect stating that such a
lease would be satisfactory. He also points
out that improvements costing about
million and a quarter dollars are neces-
sary TO be made at once upon the Della
ware Railroad in order TO enable II 10
handle properly the traffic passing over
IT, Such improvements would make the
Delaware railroad one OF tho best in the
country. and probably would give better
train facilities for all parts OF tho Penin-
sula. The report and recommendation OF
tho special committee Of directors. ap-
proved by the directors OF the Delaware
railroad. are as follows;
Report Of COMMITTEES.
That they have given careful con-
| sideration TO the questions covered by
the resolution of appointment. and
have been furnished with all the data
required by them 10 enable them TO
reach conclusion thereon.
That I'm determining the questions
submitted TO them. they have neces-
sarly taken into consideration at the
outset, the relations between the Del
aware Railroad and its connecting
lines. and the policy that has been
pursued in tho management Of its prop
erty; as well as the changes that have
recently taken place in the position of
its connecting lines,
That Il is cloar that the Delaware
Railroad. from it's inception. has been
aided and promoted by the Philadel-
phla, Baltimore and Washington Rail-
road Company. In the early days OF
its construction, the rails for it's track
were paid for by bonds guaranteed by
that company. II was leased 10 that
road on May 4th. 1865; and continued
10 be so leased. under the same general
arrangement, until May 1st. 1897. Under
that lease a rental was paid by the
Philadelphia, Baltimore and Washing
ton Railroad amounting 20 per cent.
I NNrI 81. NNs
the interest on it's bonded debt; and it's
credit was thus thoroughly protected,
until It's earning power had been fully
established. The advances made by
the Philadelphla, Baltimore and Wash
ington Railroad Company 10 meet its
interest and dividends were made with
out interest the Philadelphia. Balti-
moro and Washington Company talk
ing the risk OF the surplus earnings
not being sufficient to reimburse them
for the advances so made.
on May 1st, 1897, the lease under
which the road Is now operated on a
net earning basis. by the Philadelphia.
Baltimore and Washington Railroad
Company went into effect, for term
OF thirty years, and thereafter from
year TO year.
During the period referred to. the
Delaware Road, which was originally
chartered TO run from Seaford to the
Dona River near Dover. has been ex-
tended under legislative authority to
Dolmar on the south. and Rodney on
the north; and has also acquired
through purchase. the New Castle
Branch" and the New Castle Cutoff"
thus extending its line 10 New Castle,
and TO functions with the Philadelphia
Baltimore and Washington Railroad.
which assure TO II valuable terminal
and other facilities north of Whining
| ton.
The Philadelphia. Baltimore and Wash
| ington Railroad Company also. for the
purpose OF protecting the territory
tributary TO the Delaware Road. and
preventing the building OF lines parallel
to and competitive with the Delaware
Railroad by other interests acquired
I the control Of the Queen Anne's and
Kent. the Cambridge and Seaford and
the Delaware and Chesapeake Rail-
ways: these three roads extending from
points on the main line of the Del
aware Railroad TO the Chesapeake Bay;
and operated these roads with a result