Evening star., 1924-09-02
NEW RAIL MERGER
OFFERED HOLDERS
Van 'Sweringen Brothers
Submit Plan to Unite 5000
Miles of Eastern Roads.
By the Associated Press.

By the Associa ted Press.
NEW YORK, September . o. p.
and NJ. ]. Van Sweringen of Cleve-
land last night submitted to the
stockholders of the Nickel Plate"
Chesapeake and Ohio, Hooking Val
ley, Erie and Pere Marquette rail-
roads their formal proposal for the
unified control and operation of the
five roads.
Realization of their plans, already
virtually assured, will result in the
creation of the third largest trunk
line system in the East, with total
assets of $1500.000, 900. More than
5000 miles of actual roadway and
10000 miles of total tracka2s VIII
provide a network of transportation
lines extending from st. Louis to
New York and from Bayview, Mich,
to Norfolk. which will comb 10
States the District of Columbia and
skirt the southern edge of Ontario,
Canada. The size and scope os the
project mark the consolidation as
perhaps the most pretentious in rail-
road history.
Conceived and executed within the
shortest period of time ever allotted
to a merger of similar proportions,
preliminary steps in the plan have
been devised with view of obtain
ing an early ratification. Officials,
directors and the largest stockhold
ers of the roads already have given
their approval and if final authoriza-
tion is forthcoming from the Inter-
state Commerce Commission. the new
system probably will be in operation
before the end of the year.
Backed by Morgan.
The proposal dispa atched to stock
holders tonight was the first official
statement by the Van Sweringen
brothers regarding the merger. which
they have engineered with the bank
ing support of J. p. Morgan & Co.
and the First National Bank of New
York. Terms were Seml-offlclally out
lined through the Morgan firm early
last month, following several weeks
Of preliminary negotiations. Approval
by the various boards of directors
followed their recommendations to
accept the Van SweringenS' offer be-
ing forwarded to stockholders stimuli
taneously with the official proposal.
Formation of a new company. with
total authorized capital stock of
S344, S05.320, to acquire all the rail-
ways and properties of the five roads.
either through acquisition of ma
jority of capital stock or negotiation
of 999-year leases. is the basis of the
plan proposed by the Van Sweringens.
who express the opinion that unified
control and operation of the proper
ties will be beneficial to the several
companies and the public which they
serve.
Stock OF the new corporation will
be divided into $3.50 .2oS of per
cent cumulative preferred shares and
$1S9,773,061 of common shares, on
which annual dividends of per cent
will be placed. Present plans call for
the issuance of only s2S2.46s.642 in
stock at the outset.
New Stock Issues.
Terms Of exchange provide that
holders of 100 shares of CheSape he
and Ohio first, second and cumulative
preferred stock will receive ll5 shares
of the new company's preferred issue.
and that 100 shares of the roads COM
mon stock will be exchanged for 50
shares of new common. Holders or
100 shares of Erie first and second
preferred stock will receive SO shares
of new preferred. while holders of the
same amount of Erie common Will be
given 40 shares of new common.
Hooking Valley stockholders Will re-
ceive for each 100 shares. so shares
each of preferred and common stock
of the new company. In exchanging
10O.share blocks Pere Marquette
prior preference stockholders Will re-
ceiye an equal amount of new pre-
ferred shares, preferred stockholders
90 shares of new preferred, and com
mon stockholders S5 shares of new
common.
No shares of the new company will
be issued for stock of the Hooking
Valley Railway Co. owned by the
Chesapeake & Ohio Railway Co.
nickel Plate" stockholders VIII
not exchange their stock, but the
road itself, remaining holding COM
pany. will receive the same number
of new preferred and common shares
that it has outstanding in addition
to shares in exchange for it's holdings
Of Chesapeake and Ohio and Pere
Marquette stock.
No alteration is made in the con-
version rights of Chesapeake and
Ohio and Erie bondholders. provision
being made for converting their
securities into the new company's
stock in accordance with the bases
of exchange outlined.
Rail Heads on Committee.
The committee named to carry out
the plan is headed by J. j. Bernet.
president of the New York. Chicago
and ST. Louis Railroad Company
("Nickel Plate'D, and includes w. j.
Harahan. president of the Chesapeake
and Ohio and Hooking Valley rail-
roads: w. l. Ross, president of the
Detroit and Toledo Shore Line: F. d.
Underwood. president of the Erie;
f. N. Brown, chairman of the Pere
Marquette, and .. p. and NJ. j. Van
Sweringen.
when the entire plan becomes
effective" the Van SweringenS stated
in their proposal. the new company
will operate. directly or through sub
sidiaries, approximately 9,145 miles
Of road, including leased and con-
trolled lines. It's main lines will ex-
tend from the ports of New York
and Newport News to connections