The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1915-04-15

told when, few days ago, he appeared
before that board advocating approval for
the issue of 800, 10000 of bonds behind
which are TO stand the credit and some of
the resources of the New York Central
Railroad company. Mr. Lamont, however,
confined himself chiefly to one point and
that involved the justification of fixing
the rate of interest upon these bonds at 6
per cent. The whole story of modern
financing. and especially international
financing and the economic reasons which
explain these transactions, lies behind
Mr.. Lamonts brief statement to the pub
lie service commission that as some of
the nations across the sea are compelled
to pay as much as per cent or even more
for accommodations which they have Sc
cured in the United States. therefore 1t is
inevitable that a security of the kind
which the New York Central purposes is
suing should If 1t is to be financed at all,
bear practically the same interest rate
which the securities of other nations mar
keted in this country bear.
The proposed mortgage itself in its mag
nitude ranks with some of the greatest
ever issued by a railroad company at one
time. Some have spoken of it as the
largest single mortgage offered by rail-
road corporation. But the mere figures
and the brief statement of Mr.. Lamont
that the competition for funds into which
foreign nations have now entered serves
to establish a rate of interest are really
only parts of an extraordinary story. MIR.
Lamont is one of the younger partnership
members of the house of ]. P. Morgan
& Co.
There are some reasons for inferring
that when the management of the New
York Central worked out a problem whose
solution involved the unification of the
railroad company so that at last all of its
brought actually and legally into single
family, the very complicated problem in
volved in this unihcation from the financ-
ing point of view was committed to Mr..
Lamont All sorts of complications were
to be overcome. Thirty years ago, when
after the late Frederick p. Olcott, who
had gained great reputation a reor-
ganizer and also vast profits for the in
sttution of which he was president, con-
fessed himself unable to untangle the knot
identified by the name of the Richmond
Terminal company, the task was commit
ted to the late MIR. Coster of the Morgan
firm. He untangled 1t after a long strug-
gle and the system was successfully re-
organized.
Presumably, Mr.. Lamont found himself
face to face with as many and as seri-
ons difficulties as Mr.. Coster faced. al
though, of course, the purpose which Mr..
Lamont had in mind was entirely differ
ent. The creation of an issue of sl00.0OG.0 900
of bonds is one of the results of the long,
patient and intense study which was given
by many persons and by Mr.. Lamont to
these problems. The Lake Shore Railroad
company and the New York Central are
now substantially unified. By and by
there will be other absorptions, although
presumably not of parallel or competing
lines, such, for instance, as the Michigan
Central, of which the Vanderbilts are the
owners, but which is geographically and
naturally a competing line with the Lake
Shore. In fact, it was with that compe-
ton in view, when. after John M. Forbes
of Boston completed the Michigan Central
and built it to Chicago, New York capital
built the Lake Shore and carried that to
Chicago. Competition between these two
lines was brutal and would have led to
bankruptcy had not Mr. Forbes invented
the pool and thereby saved the new sys-
tenn.
When the purposes of the New York
Central-whch in the opinion of the man.
ayers are justified by the true economies
which unification makes posSble-are es-
tablshed and when other and even great
err financing than that which is reflected
by the proposed $100,000,000 bond issues is
accomplished. it is probable that the as