The Dolores star., 1922-07-07


o. both the Development Company and
the railroad company and that, II the
lands are subscribed and conveyed, It
will cause the railroad to be built in
accordance with the agreement;
Second, under this new plan the Syn
dicate can make no profits from the
and paying off the preferred stock,
for the reason that the lands are taken
over by the Development Company at
the full present valuation and profit
can be made out Of the lands only by
building the railroad; Third, before the
deeds can be delivered to the Develop
ment Company the Syndicate must
organize the railroad company and
present to the Trustees its signed
statement that complete arrangements
for financing the railroad company
and the building Of the railroad have
been made and that the railroad will
be built in compliance with the terms
Of this contract; and the Syndicate
must exhibit to the Trustees q certi-
fled copy of contract between tho
Development Company and the rail-
road company calling and providing
for the building, equipment and plac-
ing in operation Of the railroad;
Fourth, the deeds will then be deliv-
cred to the Development Company
to enable it to legally execute Its
mortgage and notes so as to enable
it to purchase the railroad stock (all
notes and issued stock Of the Devel-
opment Company, however, being
kept in escrow by the Trustees.) The
Development Company then, out Of
the proceeds of the mortgage, pays
the necessary amount, estimated at
81 100000 to the railroad company for
an equal amount of railroad stock,
5hus placing that amount of money in
the railroad company treasury and
that amount Of railroad stock in the
Company treasury;
Fifth, the mortgage notes of the De-
velopment company cannot be deliver
ed out of escrow, unless the financ-
ing of the railroad company has been
completed and all arrangements made
for the legal issuance Of the railroad
securities; nor until the entire pro-
ceeds of the sale of the mortgage
notes shall first have been deposited
in escrow with the Trustees. It is
estimated that this fund, so deposited,
will be at least s1,4OO,OOO. Upon all
these things having been done so as
to insure the building of the railroad,
the Development Company will then
take over the lands, and the preferred
stock will be Immediately delivered to
the respective landowners. AS safe
guard, it is provided that If any un.
forseen contingency should prevent
the prompt completion Of these re-
uuired steps of financing the Develop
ment Company and the railroad, then
the lands must be Immediately decided
back to the landowners, without ex-
pense to them.
THE FINANCING OF THE RAIL-
is to be accomplished, first,
by the purchase of its stock by the
Company out of the pro-
ceeds of the mortgage placed upon the
lands; and, second, by railroad bonds
issued upon the railroad. The Syndi-
cate can market railroad bonds where
it could not place railroad stock. This
will result in larger amount of
bonds being placed upon the railroad
that was necessary under the old plan.
But it is considered that this will not
be any disadvantage to the landowners
for the reason that the railroad stock
held by the Development Company
will be the majority and control Of
all the railroad stock, will be limited
in amount, and yet whe.. sold will de-
liver control of the railroad. There
fore, the Development Company ought
to be able to sell the railroad stock
at a good price.
THE DEVELOPMENT COMPANY,
is organized under the laws Of Colo
RADIO and is authorized to issue s., ,000,-
DDo of preferred stock and 10000
,hares of common stock. The prefer
red stock can be issued only at par
for lands ami water rights In or adjac-
en-. to the San Juan Basin, or for
cash The Company has eleven di-l