The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1912-05-28
TO SPEND BIC SUM
Two Money Groups VIII
Finance Big Project.
Subway Real Gold Mine to
Man With Money.
MOGAN GETS BIG SLICE.
Will Handle $50 Millions OF
New Bonds.
Belmont Only Man With Cour-
age for Undertaking.
MOGAN GETS BIG SLICE

New York. May 2S.-Unless there b.
some slipup, two of the alleged money
groups or powers will undertake K
finance the extension of the subway
systems of the greater city of New
York which have been decided upon by
an agreement between the city, the
public utilities commission and tn
subway companies. This financing viii
involve the issuing of not less than
260 millions of bonds. OF that amount
the so-called money group of which j.
p. Morgan & Co. are the leaders, will
underwrite about 100 millions. The in
ternational banking house of which ia
cob Schiff is the mead and, presuma-
bly,, the National City bank will, II
all goes well, underwrite about 10(
millions.
The ma gnitude itself of this financing
proposition is the best kind of an ob
ject lesson. which will serve to teach
the people not only of New York, but
of the. entire country, the stupendous
nature of the contemplated perfected
rapid transit system of New York city.
The worlds greatest aqueduct, his
toric or existing, which is now under
construction from the Catskill noun
tain watershed to New York city, will
cost about 100 millions less than the
X.
including the systems which are al
ready built and under operation. The
enlarged Erie canal, which within two
years will be open for navigation by
canal barges of a thousand tons, will
have cost 160 millionS-round numbers
less then the new subways of New
York. No modern engineering work
excepting the Panama canal, has en-
tailed such great financing as will the
enlargement of the subway systems OF
New York.
OF course, these underwriting syndi-
Gates would not guarantee either tC
purchase and hold or to market these
securities unless after thorough in
yestigation they were satisfied that tho
Securities would be easily absorbed.
The first factor of Importance in the
proposition is the fact that the credit
of the city of New York lies behind
these securities. Yet if there were not
also other equally good credit, credit
ba sed upon the reasonable expectation
that, enormous $ is to be the cost
of these subways, they nevertheless
will easily earn enough to pay fixed
charges. including sinking fund. and
also enough to pay a reasonable diVi-
dend upon the investment.
There is also another factor which
these great fnanciers have seriously
considered. That is the certainty that
the building and operating of these
assessable wealth of New York cits
many times more than the
amount of capital in these semi-public
works.
1t is only within about 25 years that
able men in this city have realized
what a real gold mine rapid transit
adequate, safe and reaSOna bly, swift
would prove to be for men who in
vested a reasonable amount of capital
in this development. Russell Sage said
of the Broadway street car line, that
it was really the finest gold mine in
the United States, meaning by that
assertion that the possibilities of great
profit in operating surface cars upon
Broadway at a single fare rate of five
cents were as tempting as the oppor-
tunities for investment in any golC
mine in this country.
When William c. Whitney was secre-
tary of the navy, in Cleveland's first
administration, his attention was di-
rected, almost accidentally, certainly
incidentally. to the possibilities which
Law in the development of rapid tran
sit in the old city of New York, for a
that time New York city consisted
only of what are now the boroughs of
Manhattan and the Bronx.
They Were Too Greedy.
Mr.. Whitney and his associates made
the mistake of attempting to realize
instantly upon their investment in
New York City street railroad COM
panies. Had they not adopted spec
tacular high finance. but had been
content to develop along safe. reason
able and consistent lines, the combina
ton of the various street railway ines
in New York City into one systeln,
they would in the long run have made
more money than they made by nigh
financing and would have been spared
the humiliation occa stoned by the
bankruptcy of the system
After New York City. which for TWEEN
ty years was busy with an attempt to
solve the rapid-transit problem. fin
ally decided upon the plan submitted
by William Barclay Parsons, which in
volved the building of a cellar or trench
Immediately beneath the surface of the
highways and installing electricity l,p-
on the system to be operated in this
channel it seemed probable that tne
city might be compelled to build ard
operate the road itself. The proposition
was offered to the Vanderbilts. who
might. had they accepted it have mad,
posed subway system and their Crane
that day, however. looked upon the
proposition as a chimerical. Some O:
them asserted that they would not en-
Ter into contract with the city to oper-
ate trains in the subway if the fran
chise were presented to them as a free
gift.
other men of capital looked with