The Detroit times., 1913-03-12
STEVENS GIVES HISTORY
OF PERE MARQUETTE
CONTINUED from p.sx. one,


two years have been greatly misun-
derstood, and asZi understand II this
committee will pay no attention ~
mere gossip. nor will IL merely search
for faults. but will take broad view
OF the situation OF the railroad how
IL has been affected by the rise in the
cost OF labor and supplies and the
economic conditions OF IFS territory.
and recommend such legislation as
may be truly helpful Ia the railroads
OF the state.
The Pere Marquette Railroad Co.
was organized as a Michigan corpora
ton In 1899, and began business Jan.
i. 1900. IL was formed by the con-
solidation OF the Flint 4 Pere Mar
quette railroad. the Chicago n West
Michigan railroad. the Detroit. GranG
Rapids 4 Western railroad. and the
Chicago 4 North Michigan railroad.
IL controlled $500 miles OF road. prac-
tically all In Michigan. The lines
were taken over by deeds subject 10
the equipment trust and underlying
bonds which amounted To s25,S00. 00U
for the lines taken over. There has
been no question whatever raised as
To these securities. There are now
outstanding OF these underlying bonds
SPA ,S79 900, or about onethird OF the
$70.000,000 Indebtedness OF the road.
The nearest maturities of these bonds
are 1920 and 1921.
The capitalization OF the road in
1900 was s2S.000.000. OF which $l2.-
100000 was per cent non.cumulative
preferred stock and part OF it came
70 hn of m
after the reorganization committee
finished its work. leaving the issued
capitalization about $26,000.000 the
amount at present outstanding. There
are now three classes of stock, how
ever. $l4,300.000 first preferred; $685.
600 second preferred. and Sll 900. 00U
common, the change being made when
the road was reorganized In 1907. This
stock is owned by LOO persons, firms
or corporations.
The company has paid since It's
organization Is years ago, dividends
which average l6 per cent on the pre-
ferred stock. and 90 per cent on the
common stock, no dividends having
been paid on either class since 1905.
Mr. Stevens then told how the road
has acquired the Grand Rapids. Kali
kaska a Western, the Grand ..ptds,
Belding & Saginaw. and the Saginaw,
Tuscola & Northern, increasing the
underlying bonded indebtedness by
1850 DOE, making the total $25, $685.
900.
He also explained the formation or
the Marquette Equipment Co, which
was organized to handle equipment
trust certificates In the manner com
mon in putting out such securities.
Jan. /. 1901, the first OF the
! mortgage obligations OF the Pere
Marquette railroad was issued. the
consolidated mortgage covering the
entire road subject TO the underlying
liens The amount authorized was
$4,000 900, OF which $26.500,000 was
set aside 10 refund the underlying
bonds and the remainder reserved Tor
additions and improvements, with the
provision that the bonded indebted
ness OF the road should not be In
creased TO more than $4,000 per mile
OF single track and $4,000 per mile
OF double track. In 1901, S2,500,000 OF
these bonds were issued partly for
refunding and partly for additions
and Improvement. part being sold at
90 and part at 92I2 to Robert Win
throp & CO., New York banking
house. At the price, these bonds cost
the road Ala per cent. approximately
In 1902 the road issued S2,l05,00O
more OF these bonds for additions and
improvements which are detailed In
the annual report for that year sell
ing them at 92t2 To net 3-S per cent.
Thus the total indebtedness OF the
road had been increased to $30,244, 900
BY the end of 1902.
Mr.. Stevens then told how the adj
valorem tax which went into effect
III 1902 had operated TO increase the
taxes from an average Of $254.0o0 To
s537 900 per year, besides the term
inal taxes In Detroit, Grand Rapids
and elsewhere, and $4,000 in pen
laties.
The increase said Mr.. Stevens was
S2S3,000 per year on the average, the
interest on IS. 10000 at five per cent
which the road could have paid IL the
taxes had not been increased.
In the latter part Of 1902, +. II.
Prince, OF Boston. and his associates
obtained control OF II, 900 shares OF
the common stock Of the road which
gave them control of the company.
The original directors were dropped
with some exceptions, w w. Grape
retiring as chairman OF the board af-
Ger 40 years with the road. and &. NJ.
Head retiring as president Among
the new directors were Newman Erb.
Mr.. Prince became president. jan 1,
1903, and the new administration i'm
mediately took over the Lake Erie A.
: Detroit River railroad from the Walk,
ers, paying S2,s70.0OO In Pere Mar
quette bonds, secured by the stock In
the Canadian road and assuming 3d.
100000 in bonds. The road con-
trolled 222 miles, including the Lon
don a. Port Stanley line, which IL
:. owned by the city OF London. Inter
est charges were Increased by this
purchase s264,s00 per year.
The hearing was adjourned at Il
o'clock, and resumed at p. m. with
Mr.. Stevens still testifying.
The hearing was conducted by
Lieut.Gov. Ross. and the members OF
the committee present are Senator W.
NJ. Smith, OF St. Johns; Rep. y. r.
Leonard. OF Detroit, and Rep. Young
OF Big Rapids. Senator Verdier. oil
Grand Rapids, was unable TO be pres
ent on account of the illness or MS
daughter The three receivers, Frank
W. Blair. OF Detroit; Dudley +. Wa