The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-10-13
CANADA ALONE TO
OWN GRAND TRUNK
Terms Provide for Purchase
Outright Of Roads Capt.
tai Stock.
MAY REDEEM IN 80 YEARS
New Stock Issue Is to Be Based
on Value Fixed by Ar
hitratOrs.
by a STAG Correspondent Of Tnn Sun.

by a STAG Correspondent OF THn Sun.
OTTAWA. Oct. 1.-THE decisive turn in
the terms of the deal with the Grand
Trunk was dictated by the purpose to get
control of all the capital stock through
purchase outright of that stock, and to
provide that voting powers nov asso-
ciated with present guarapteed and de-
benture stock shall cease and determine
absolutely, and for right of redemption
guaranteed and debenture stock at par
by the Government after thirty years.
The reason put beforethe House Is notice
for such enabling according "as the Gov
eminent may think necessary for the ac-
auisition by the Government of the en-
tire capital stock of the Grand Trunk,
except the per cent guarantee stock OF
the Grand Trunk, amounting to sSZ,ooV'-
0O0."
The purchase of this entire capitai
stock is to be paid for with a new issue
of guaranteed stock In amount based on
tho value to be determined by the aroi-
traitors. and drawing dividends payaole
half yearly at 4 per cent per annuiii
from the date of the appointment OF the
committee Of five on management mere
matter provided for. upon an issue wnich
ia hereby authorized, by the Grand trunk
under the terms of the said asreemeht
of non-voting capital stock thereinalter
called the new guarantee stock not
exceeding the amount determined py the
board Of arbitration.
voting Powers to End.
-, ...., a,o,,rrantlv with
such guarantee of dividends and interest
mon the present guaranteed stock and
the present debenture st q, respectively
the voting powers at meetings OF snare
holders of the Grand Trunk now vested
in or exercised by the holders OF the SAID
stock respectively shall cease and de-
tcrmine absolutely.
"That the present guaranteed STOCK
and the new guaranteed stock OF any
mart thereof may be called In or re-
deemed by the Government at par al
any time after thirty years from ,ne
date of the appointment OF the saio coni-
mittee of management. on SIX months
notice by advertisement to the hoioers
thereof"
These definite terms fix beyond any
doubt that there is to be no lease nor
any Joint ownership Of the drana
Trunk: the Government OF Canada VIII
he the sole owner. The Government pro-
pose TO assume f44.426.12o guaranteed
and debenture stock, OF which f6,es3,4oo
is per cent. and the balance per
cent. should the arbitrators place
value of SO per cent on the f31, 4S2,6Io
preferred and common stock that wouio
make the total cost Of the road 70 Ian
ada about Ss00.000,000. The haoiiities
of the Grand Trunk Pacific are appar,
emily 5000. 100000. The entire Grano
Trunk system Is worth s750.000.0Oo; Sc
that the equity surplus between assets
an liabilities is large. after allowing
for the annual loss for ten years on the
Grand Trunk Pacific. II Is also provided
that the committee of five on manage
ment shall continue to act until the
preferred and common stocks are trans
ferred to or vested in the Government
when 1t shall be discharged"
Gives Complete Control.
These preference and common stocks
shall then be vested in the Canadian
National Railways Corporation, giving
full control of the Grand Trunk and Its
subsidiary companies. The Chicago and
Grand Trunk, the Detroit. Grand Haven
and Milwaukee and leased lines of these
companies, as well as the main line Of
the Grand Trunk between Montreal anc
Portland, will continue to be operated bS
the c. n. r Corporation. The cana
dian Ministry is determined to give Gov
eminent operation under u corporation 6
! fair trial.
| Howard G. Kelley, president of thu
! Grand Trunk system, an experienced
American railway man of high reputa
ton for efficiency, and ID. b. Hanna
president of the Canadian National, viii
4 Il ,v,1tt toe n IN a
| agement, but It 10 still toe early to pre-
dict who will be chosen president of thu
/ complete Canadian National system will
its 10000 miles Of railway. The boart
Of directors is appointed by the Govern
ment, and II Is understood that an en-
\ tire new board will be named after tn
| Grand Trunk is acquired and which ma!
include some Of the present directors.
In addition to the values of the Gran'
/ Trunk and Canadian Northern systems
Canada has invested s3s1,ss4.026 II
railways. Apart from the annual inter
est charges on that sum the estimated
operating deficit of the Canadian Ma
tionai for the current year is $4,000, 000
which includes the Canadian Northern
| As things are going the gross traffii
revenue OF the Grand Trunk this yea
will be SIC, 1000. 900. and it Is fair to as
sumo that road will be able to take car
of all its own operating and overhead
expenses The Crank Trunk is splen
did property. but the loss on the G.. I. /
approaches S7,5O0,000. That sum, adde
to the Canadian National deficit on oper
alton and the interest charges, will max
the total cost to the Canadian peopl
| for their railway enterprise and the gen
erous commitments made by their pc
litical leaders run up close 10 100000
a year.
The Newspaper View.
Writing for his newspaper. the Toront
Sunday World, w. F, MacLean, NJ. I
for South York. says In lighter vein:
1.-THE magnates' mess has an interna
tional side that is socially romantic an
may have sad consequences TO more tina
one 'hoary institution. The mess wi
make a railway porter of King Georg
In the Republic.
Tripping the King may become
light phrase among the descendants 9
those who drove George III, from thei
hearths. The Crank Trunk is TO
owned and run by the King. With
their sphere the Kings servants are tn
King. His Majesty's trains will run
Vermont and Illinois, and his dusky rel
resentatives will see you to your bert
. In ChiraRO