The star-independent. [volume] (Harrisburg, Pa.) 1904-1917, 1915-01-28
s49.0OO.OOO IN PENNSY
BONDS AT 4 IL PER Cent.
Company Disposes of Consolidated
Mortgage Securities to Kuhn, Loeb
& Co., of New York-other Com
panies Arrange New Financing

Philadelphia, Jan. 2S.-The Pennsyl'
vania Railroad Yesterday declared its
regular quarterly dividend of l L.
per cent. on the stock, and almost SIM
ultaneously it was announced that the
company had sold to Kuhn, Loeb 4 Co.,
of New York, s49, 100000 consolidated
mortgage 1-2 per cent. bonds, due
August /, 1860. The dividend action
and the comparatively favorable terms
on which the railroad was able to float
the bond issue created favorable i'm
preston in financial circles.
Although not officially stated, it is
understood the bonds We're sold at a
net price of par, thus making the money
cost the railroad 4 1-2 per cent. per an
mum. Seven years ago the company sold
approximately $40,000,000 4 per cent.
bonds, running for 40 years, under this
same mortgage, at 81, making a net in
terest cost of about 442 per cent. 1t
had been expected that larger ad-
vance in interest would be necessary at
this time. The new bonds were quoted
at los 5-S bid on the New York curb
late in the afternoon.
1t was stated at the general offices of
the Pennsylvania Railroad that the
bonds which have been sold constituted
part of the new financing on which
shareholders are asked to vote at the
annual meeting in March. The proceeds
viii be used in part to retire the $751;
100000 convertible IL per cent.
bonds which fall due next October.
With the sale of these bonds the con-
solidated first mortgage on the main
line of the Pennsylvania Railroad is
IL Co. fha I,a;p +ba 1i,,,,t no
ing $100,000,000. The mortgage is
loan there had been issued under it
s55, 100000 bonds, but through sink
ing funds this amount had been re-
duced to 100000, making s49,-
100000 available to be issued. The
mortgage is perpetual one, so that
when bonds mature new ones may be
issued under it up to the limit of $780,
100000. There are now outstanding
under it approximately S5,000,000 5s
due in 1919, S2,5S4,000 As due 1943.
S4,491. 900 3 1-2s due 1945, S39,-
100000 As due 194S and the new $49,-
100000 4 1-2s due 1860.
New financing was also announced
by the Erie railroad and the New York
State Railways. The former road ap-
piled to the Public Service Commission
Of New York for authority to increase
to o per cent. the rate of interest on
two issues of bonds which cover essen
tial portions of its main freight lines
to Chicago. These bonds are S7,400,000
Erie and Jersey first mortgage As ami
S6,000,O00 Genesee Railroad first mort
gage. Both issues are owned by the
Erie Railroad, and by their sale it is
planned to pay off s6,000,000 notes
maturing March /. s2.500,000 due
April 1 and S4,550,000 due October l.
There are s7,500.000 additional notes
due April l, which it is expected will
be extended two years. If the plans
are carried out, they will clean up the
floating debt and funded loans coming
due for two years.
The New York State Railways Com
pany, it was announced sold to J. P.
Morgan & Co., s2.923,000 first con.
solidated 4 12 per cent. bonds. being
part of an authorized S50,O00,000 is
sue, of which 1851 ,000 will now be
outstanding.
Negotiations are processing regard
ing large bond issue by the New
York Central. Bankers well informed
regarding New York Central affairs said
that no announcement might be made
for 10 days or two weeks, but it is I'M
derstood that the issue will take the
shape OF an issue of per cent. deben-
lures. to be made convertible into 6
per cent. preferred stock, and to be of
fered to the stockholders at par to the
extent of 80 per cent. of their holl-
ings.