New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-05-26
SUBWAY BONDS SOLD
Morgan Firm Takes Sl70,0OO,-
600 Interborough Issue.
SYNDICATE BEING FORMED
Objects for Which Proceeds VIII
Be Used-Four Years for
Payment.

j. p Morgan & Co. It was announced
yesterday, have contracted 10 purchase
from the PETERBOROUGH Rapid Transit Com
pany $4,000. 900 new first mortgage per
cent fifty-three- year bonds. TO be issued by
that corporation in connection with the
agreement Just reached between II and the
CITY Of New York. The purchase Is con-
tingent upon the approval by the Court OF
Appeals Of the preferential payment OF
S76 per cent provided for in the subway
ARRANGEMENT with the city. The financing
plans for the new subways Of the Brook
Iyn Rapid Transit Company are not yet
ready for announcement, but the 100000
600 new bonds to be issued by that conf
pany will be taken by Kuhn, Loeb & Co.
the Central Trust Company and their as
sociates, as already announced
The Interborough's financing plans call
for S167156950 divided as follows: For
refunding the company's present debt, $50
656,950: for construction of new subways
(the Interborough company's one-half OF
the cost, $1,000, 900; for Manhattan rail-
way improvements, about S30,000,oOo; FOR
equipment for new subways. s21,oOo,oOO,
and for other charges. including discounts
about $4,000 900. The mortgage securing
the $4,000, 900 bonds from the proceeds
Of which these requirements will be met
will provide also for the issue OF such add
tiopal amounts of bonds as may be needed
for extensions and improvements during the
period OF the lease.
Letters have been sent by J. ?. Morgan
& Co. TO bankers inviting them to join
IN a syndicate, the life Of which is 10 be
five years The price Of the bonds 10 the
syndicate il Is understood will be 36. Nor
gan Grenfell & Co., of London. and Nor
gan. Haries & Co., Of Paris, are inviting
subscriptions 10 the syndicate from Euro
pean bankers, and il is expected that
large proportion Of the bonds will De placed
abroad.
The purchasing bankers will have four
wears in which TO pay for the S7ooOo"o
bonds. which are to be part Of total au-
thorized issue Of about s2O0On'ON. In the
year from July /, 1872 to June 30. 1913 they
will pay $4,000 900; in the next two years
s30c00.0O0 each, and in the year ending June
90 1916. the remaining s32,0000oo. The syn
dictate will divide equally with the Inter
borough company any amount received on
the sale Of the bonds in excess Of an aver
age price Of par and accrued interest. after
deducting all expenses.
A cumulative sinking fund OF l per cent
will be provided for, to begin five years
from, the date of opening the new subWays'
or at the latest not more than ten years
from the date Of the bonds. Bonds may be
drawn for the sinking funo at 10 or bought
in the open market at lower figure, and
the whole issue will be amortzed during
the term Of the lease.
When the subways are completed. the In
terborough Rapid Transit Company will
have a prior claim on the net earnings OF
the properties to the extent Of Sl4,56S, 000
made I'D as follows: Average annual earn
ings of present subway for the last two
years, sS,3S50O per cent interest and
per cent sinking fund on ST,ocO,co' the
amount Of Interborough's new investment
in subways. S,62o0OO; interest and annual
sinking fund on approximately S3ooo00o
capital invested in elevated railways N'-
10000; profits from Manhattan Railway
lease and other income, which during the
last two years have averaged annually
S,sS,0oo