New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-04-10
How Sterling
Securities Will
Be Dollarized
Canadian Pacific Explains
Plan to Transfer $780,
100000 to New York

The Canadian Pacific Railway Com
pany has sent 20 its stockholders
circular letter outlining the proposed
plan for transferring large portion OF
the roads indebtedness from England
10 the United States as a means Of
assisting the British government IN the
maintenance Of sterling exchange in
the American market. The securities
involved have a par value Of nearly
100000, 900
with the assent Of your company
the letter reads. "the British Treasury
included among the securities which
were being borrowed in Great Britain
The various outstanding obligations OF
your company. and these obligations
have already DcCn used. 20 some extent.
for the purpose Of pledge in New York
as security for the obligations Of the
United Kingdom Of Great Britain and
ireland.
at became evident. however. that the
obligations of your company. being 10
large extent issued in a currency for
eign 20 American markets. could be
more adyantageously utilized if put IN
a form familiar to American investors.
Acting under an understanding with
your company. which you will be asked
10 ratify at the forthcoming special
meeting. tha Lords Commissioners Of
his majesty's Treasury have decided 70
take over or acquire under their gem
c,al powers in that behalf. or under
regulations made pursuant to the de-
fence Of the realm consolidated act
of 1914 and amending enactments from
all persons ordinarily resident in the
United Kingdom. their outstanding
holdings OF Canadian Pacific ( per cent
consolidated dohenture stock: Atlantic
& Northwest first mortgage ) per cent
bonds: Algoma Distri:. first mortgage
> per cent bonds; Ontario & Quebec >
per cent dobenture stock. which the
imperial government proposes to lodge
with your company in exchange for
such an amount of twenty-thirty-ye
> per cent collateral trust bonds of the
Canadian Pacific Railway Company in
dollar form a viii equal. al par, the
value on a per cent basis Of the
securities received from the Treasury,
calculating the pounds sterling at the
rate Of 81 TO 800
al all Of the above four issues
should be acquired and deposited. your
company will issue S19S.979,5S0 Of
bonds, payable as 20 principal and in
tercst in gold in dollars, in New York
OF Montreal, at the option of the hold
or. with fixed maturity Of thirty
years. but redecmable at par at the OPP
ton Of your company on and after the
expiration Of twenty years. 1t is also
20 be provided that the bonds may be
redeemed. If requested by the govern
ment, at 105 and interest. at any time
within the first five years of their life.
The pledged collateral will be lodged
at the specific prices Of so for the
Canadian Pacific / per cent debenture
stock and at par for the above men
toned per cent securities.
"Under the proposed arrangement
the annual fixed charges of your COM
pauy viii remain as they are at pres
ent, interest on the collateral trust
bonds being covered by interest on the
securities deposited as collateral, and,
although your company is taking liza
bility for repayment on a specific date,
that liability IS covered by an under
taking Of the imperial government to
provide the funds required for redemp-
ton OF the bonds in whole or in part
during the first five years. or after
twenty years at maturity, as may be
determined.
"Included in the per cent corsol-
ida.od debenture stock that the I'M
perial government PROPOSES 10 acquire
and deposit is the amount of $4,000
0oo recently issued by tour company
AMI loaned 10 the British Treasury.
which the imperial government will
purchase al 50 per cent Of its face
ralue. the proceeds for the sale-name-
". go ,Oo0-to be loaned 70 the
imperial Treasury for a period Of FIVE
years at an amt al interest rate Of 81
per cent. payable semi-annually"