Daily Kennebec journal. [microfilm reel] (Augusta, Me.) 1870-1975, 1915-01-16

a.. -N4t4I!t VI lIit 1dSlS "a H.
.c..-.e-> pertaining TO the finances
e.re r.. -rpauy. the following state
..s~, ,..- b.ea prepared and issued
~. directors for the purpose Of
-r,g T., public the full and correct
.,.-g..t.on to which il is entitled,
n II form which may readily DC
Understood
EQUALIZATION OF THE MAINE
CENTRAL RAILROAD co.
-,s.o-, Of the Capitalization of the
Name Central Railroad Co.. Dur
NJ to Period June 30, 1911. to
Inc -. 1914.
r. -...~.l terms the capitalization
"a r. -rDal Is represented by the
.r..f stock and funded debt The
- ,.,-e two items represents 2
eg.s ,.tal upon which tho cor
ara. q. las 10 earn d fair return IN
DO :Lat its securities may com
ra,5 "a fair Irjce in the market. In
add. r IT, The funded debt there Is
Ia n - operations more or less
.s-rpnr-ry or floating Indebtedness
.aa s.a.e If which the corporation
us- Rave - pay interest Temporal
e.. t.' usually the ratio Of such
indebtedness. 10 the capital stock AMI
.,.lcI c,ht Is small. and in the case
u tie Maine Central IS SO small,
...t !, may he entirely disregarded.
Tbs a..l- so, We may start out with
lie as 4'apt.on that the capital stock
~. d.. funded debt together repre-
,.a- i.- sum upon which the cor
,srat.eu must earn dividends and in
,erpst IN order TO obtain the capita.
ae.ss~ary to properly conduct Its
'gsI.r->.
-1,-. taS been d great difference
T. ~. PROPORTIONS of capital stock
ard funded debt which make up the
.-p.a! # various railroad corpora
-ars The Maine Central Railroad
Company ON June 30, 1911. and for
many Years prlor thereto had 4
4ptaI stock which was in round
l4n.a.r- i've million dollars s5, 000
au 1t that date its funded debt
d IN round numbers twenty million
.lars 10000, 600, which did not in
lce tn Indebtedness of leased lines
y tle .Xed obligations Of the Maine
'er.r4l Railroad Company in rela
I'm To such lines. This shows a
!ac1 If only twenty per cent. go
r. cent? OF the total capitalization
Z i.e Maine Central Railroad Com
rauy itself represented by its capital
a,.k. Without going into figures
-.f..g T. the capitalization Of oth2r
abroad companies, or entering into
s.1 .!sg ussion Of what Is a proper
--.. Z. maintain between capital
SOCK ana total capitalization, it is
-1q4-S,lonably true that the per
fa,a-, If the Maine Central stoc'5
a55yv referred to was too small
90 meet the requirements Of sound
2aaIl. 4l policy.
tn Summarize, giving exact fig
l,o>
jan gu. 1911.
'aW-a4 stock. ........ s4995,7 zoe. 90
.1r-'1 debt. 90, So, 1872 90
Tgta! capitalization s25,3S7, $1,000
,A@..-I Report 1911, Table No. !,
Tag, .-.t
Dlrrs the following year June 80,
'91 t. l>12), there were material
s1aH-,S IN the capitalization:
Gi The authorized capital stock
vas 10 .r,ased to ten million $50
'a,ea.l ny the addition Of five mill
lions ,S7 o1o e00) of new stock. of
which there was actually issued s4,-
$4,000. making the total capital stock
Outstanding az the end Of the year
1880.
90 IIder the provisions Of the
Nerc'H Act. so-called. being Chapter
y" IT.. Vie Private Laws Of 1911. the
Sf1tF>,t Railway, the Washington
.va:'t Railway and the Sebasticook
d .i.us,h,ad Railroad were merged
";9 ". Maine Central Railroad Com
PAN fure the merger the Maine
'...'s 1-rough the ownership Of
s..a a'- other securities owned
Bees Ir.p-rt.es subject TO the pay
Hen o.. their debts. BY the terms OF
!as a.' t's Maine Central took over
;a'se -el--rtjcs and assumed their
L.f,.
t' ''~ means when the properties
.'a~ became a part of the
wan, '.Irral the funded debts Of
1-@ Washington County Railway and
ne ."rsct Railway, being $500
W" and $lcf1.50o, respectively, were
.-s19 III TIE funded debt Of the
~. t..'.rraI II will be noted that
'fS addition % the funded debt dill
-o' represent any money transac-
"eeS whatever. but was only a mat
~ q bookkeeping made necessary
y u" legal assumption Of these
ems II The Washington County
railway and the Somerset Railway
" TIE Maine Central under the terms
'ae Merger Act.
me results Of these two transac-
IONS was an actual increase in the
equalization by the amount re-
N'e0 Ter the new stock and a nomi-
*. increase by the amount of the
.so's Of the Washington County Rail-
way and the Somerset Railway as
s1"ec which Of themselves alone
s'l.o have shown the capitalization
Ss follows.
70. Stock. -. .... 1878. 10000
-uhded debt. e4153.eso 90
'0'aI'.. -. .......... s34 .133. 392.0c
o@' THIS was not the actual result,
'1a~se there had been other chang
= III the meantime which reduced