New-York tribune., 1911-01-12
HUNDRED MILLION BOOST
Pennsylvania Railroad Directors
Authorize Increase in Capital.
TO RETIRE MATURING PAPER
News Results in Sharp Break in
Pennsylvania and seading Is
sues In Wall Street,

The directors of the Pennsylvania Rall-
road Company at a special meeting heid
In Phiiadelphia yesterday decided TO pre-
sent to the stockholders for their approval
nj their annual meeting on Marcn IL
resolution authorizing an increase IN the
capital stock from $Joo,0o0,oO0 10 S50OOOoVo0'
Only about 10 per cent OF the proposed $780,
1000 Increase, Il was explained, would DO
isyued in the current year. as that would
furnish all the money needed 10 provide
Tor maturing obligations and necessary I'M
proyements. The remaining SN,0O,cOa pro-
vtded, of course, that the proposed increase
4, approved by the stockholders, will be re-
served for future requirements.
The announcement of the proposed in
crease IN the capital stock Of the Pennsyl-
xsnla Railroad was a surprise TO wall
street, and the news caused a sharp break
,n Pennsylvania and other leading issues
IN the stock market, which declined on an
average OF / point. Pennsylvania itself
broke from 1895, its high point Of the day.
20 below l2S and closed at i27ss, net loss
OF "a: points for tho day.
While Il has been expected in the Street
that the Pennsylvania would shortly an
rounce come new financing TO provide
funds for the years needs, it was thought
that this would take the form Of a con-
vertible bond issue OF around s50,o0o00o, and
no increase in the capital stock was looked
for at this time. II has been the policy OF
the Pennsylvania management, however, 10
provide a large authorization Of stock
ahead Of the company's actual needs, TO be
used by the directors from time TO time and
In such amounts as the company's require
ments call for.
President James McCrea, in announcing
fhe proposed increase OF $lOOO0)600 in the
capital stock Of the company, said
The company's needs Of this year. TO
provide for maturing obligations and nec-
essary improvements. require the raising
Of between $30OOo,C00 and S40,000O0o. IL is
therefore proposed, should the resolution
70 be submitted by the directors 10 the
stockholders meet with favorable action, to
make a stock allotment Of 10 per cent at
par, payable one-half on May 81 and the re-
maininE half on August 81.
1T is not the intention at this time TO
issue any part Of the slOo,00o000 for which
authorization is asked, excepting so much
es is necessary 10 supply this proposed
issue Of 10 per cent, but the authority is
now asked for that the directors may be
able TO make further issues of stock from
time TO time IN the future as tho require
ments of the company may make such Is
sues necessary"
OF the present sJ0O,QOoO00 authorized capi-
lal stock Of the Pennsylvania si126O0OOO IS
outstanding. All Of the difference between
the amount issued and the amount author
ized, excepting $22C0OO0o, is at present re-
served for the possible conversion Of the
company'S outstanding convertible bonds
There IS a total Of $96, 100000 Of these bonds
outstanding, of which 100000 are due In
.sl2 and the remainder in 1915. The former
are convertible at 40 and the latter at $50
so that the remainder Of the authorized
UnisSued stock Is more than enough to pro-
vide for their conversion. Should the bonds
not be converted before their maturity,
however. the company would have TO pro-
vide more than the present authorized
stock for the purpose.
The stockholders Of the Pennsylvania in