The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-10-10
B. 80. TOPUSH HUGE
BLANKET MORTGAGE
Shareholders Meeting Called to
Consider New Issue Of
S6OO.OOO,OOO.
EXPECT TO PAY HIGH RATE

The Baltimore and Ohio Railroad
Company is planning to put into opera
ton within a short time the $500, oo0. 900
blanket mortgage which II was re-
ported TO be considering last June. Cir
culars are now being sent out to the
shareholders impressing them with the
necessity OF attending the Stockholders
meeting to be held on November is
The mortgage Is intended to care for all
tho present needs and future financial
requirements Of the company for a num-
Der OF years To come
with the exception OF the first mort
gage, which provides for tho further is
suing of sl,00o.000 bonds each year for
nine years, the several mortgages Of
tho company make no provision for
future requirements As result the
officials have had under consldera ton
for some time plan for making a
mortgage covering the entire system and
its subsidiary lines under which bonds
may be issued TO retire existing indebted
ness ma II natures and to provide the
funds needed from time to time for eN-
tension OF the company's property.
The amount OF the blanket mortgage IN
placed at $500, 100000 owing TO laws in
several States which provide that bonds
issued by railroads In excess OF three
times tho amount OF their capital stock
shall not be legal investments for
savings institutions The Baltimore and
Ohio IL capitalized at s212 900. 600. thus
leaving An ample margin over the re-
aurement. When the first mortgage ex-
pires in 1913 this mortgage will constitute
irst lien OH the property
Under the proposed terms OF the
blanket mortgage tho document will cover
the entire system Of the company and
It's subsidiary lines Each series OF bonds
as issued will bear such rate OF interest
and generally be in such form as 10
best meet the existing conditions at tho
time OF their Issuance. They VIII. how
ever all be secured by tho same mort
gage.
In furtherance Of the plan 10 simplify
tho title. owned by the Baltimore and
Ohio II Ia also proposed at the share
holders meeting to reduce the number or
organizations In the different states
through which the system runs, This has
already been done in West Virginia and
PENNSYLVANIA. where all the subsidiary
properties have been acquired by direct
ownership or merger II Is now planned
to carry this scheme into effect In Ohio.
The Baltimore and Ohio has maturing
up TO 1928 about $3.50. 900. The pro-
posed blanket mortgage will take care OF
all of this az 1t natures and will leave
the company with a substantial amount
left over to caro- for the needs Of the
property for several years. Tho Balti-
more and Ohio usually spends between
si6. 900. 900 and SEQ. 100000 a year on
tho property. II is said that the COR
pary has s35. 5000 short term notes
maturing on June |, 1918.
\ director Of the company In speaking
Yesterday OF the proposed blanket mort
gage pointed out that railroads which ex-
pected to borrow money during these
times must be prepared TO pay high rates
even ON first mortgages The time. no
said. when the best of railroad properties
could borrow money at & per cent. was
past and they should consider themselves
lucky even to get funds AT per cent. He
intimated that II was by no means Ger
tain that they would not have to pay
even higher figure. Europe. he said,
would be unable TO finance us for many
years and In the meantime this country
must look after itself in the way of secur-
ing funds to assist tho development OF its
railroads and Industries.