The Princeton union. [volume] (Princeton, Minn.) 1876-1976, 1913-12-18

TON, MILE Laos COUNTY, u
600 preferred stock. OF this, on the
date of the report, 1871, 600 COM
mon and 81, 768, 800 preferred was out
stand ing, making a total par value
of SIS, O79, 900, or capitalization per
mile of line, less the turnouts and
sidings, of S136, 045.
This is from three to four times
the capitalization per mile of subur-
ban electric railways in similar terri
tory. For instance, the Minneapolis
& ST. Paul Suburban Railroad COM
pany, owning about "a miles Of line,
has a capitalization of about S42, 600
per mile.
The plan of financing the Dan
Patch company, mainly Through
''watered stock, - is responsible for
the excessive capitalization of the.
road. In the official report l find
these explanatory remarks:
The item miscellaneous Tin the
statement of general expenditures
includes the following:
Cash commissions on sale of
Common stock commissions
on sale of stock. ...... 81, SOL
Total .................. S3,806, 3S7
tot tel af Of ooYY10 m
stock, s3,317, s61, which was given
away as commissions on sale of
Stock exceeds by Sc. 26l the par value
of the entire common share capital
reported as outstanding. It there
fore appears that the only stock for
which any money has actually been
received is the preferred issue of
which, as stated, 81, 1853, 300 is issued.
These figures may possibly be sus-
ceptible of some different interpreter
tion, hut, as they stand in the re-
port, they show that the Dan Patch
railway paid 1888, 526 in cash and 3d., :
3l7, 86l in common stock to effect the
sale of s1,768, 800 preferred stock.
Some proportion of this heavy pro-
motion cost may apply to shares sold
on installments, and not yet fully
paid or issued; but it would be
peculiar to adjust stock commissions
on such sales in advance of the pay
ment and the formal issue of the
stock sold.
The figures given above of the
common and preferred capital out.
|standing, and of the commissions
paid in cash and common shares, are
as; the company reports them under
cath to the Minnesota Railroad ans
j Warehouse commission. It will be
Fneteds that the amount of common
stock allotted as commissions is ap.
Iproximately twice that Of the pre-,
ferred stock outstanding. Yet
lhave never seen an Offering of the
company that mentioned larger
bonus than 100 per cent. of common
with the preferred; and the usua
procedure has been to offer twt
shares, one of each class for a lum1
sum. What becomes of the othe,
lshare Of comlnen-for two appear tt
be- issued with each share of pre-
ferred-is not made clear.
i The Dan Patch company has beer
! widely exploited as the s'People'!
Railroad. One of the principal ar
guments of the promoters has beer
that every holder would share alike
that the company would be it's Owl
; promoter; that no "Wall Stree
Methods would enter into the prof
ect; and that every dollar contrib
; uted by shareholders would go int
|. the property direct. Yet the report
shows heavier commissions paid il
: cash and common stock, to effec
!, sales of preferred stock, than an,
legitimate Wall Street proposition
| with which I am familiar.
If 1 we're shareholder, before con
tributing another dollar, 1 SHOULD
: want to know all about the stock
} selling arrangement, and who get
the commissions, particularly thos
} of common stock, over and allow
) what goes in the form OF bonus t.
preferred holders. This is of pri
: mary Importance, because the com
mon stock alone has voting power
5 and will eventually control the con
+ Germ, the preferred shares beinj
denied that privilege.
: A New Motion Picture Theater.
DR.. G. S. Neumann informs til