Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-12-24
EQUIPMENT ORDER
TOTALS HUGE sum
c. & O. to Spend $42, 500, 900
in New Stockholders
to Follow.
BY J. C. ROYLE.
,nafet, En- rr1. CA

NEW YORK. December pa nice
little Christmas gift went out today to
the railroad equipment manufacturers
of the country in the shape of an order
fer $42. 100000 worth of equipment from
the Chesapeake &c Ohio lines. The
specifications included 1851 units and
covered requirements for the Chesapeake
& Ohio, the Hooking Valley and the
Pere Marquette roads.
The order called for $50 freight
cars, including coal cars; 100 locomo-
tives and 301 units, comprising mail
cars, cabooseS and coaches of various
sorts. All will be used to retire present
equipment, which the Chesapeake &
Ohio lines feel is not up to require
ments of modern railroad usage and eff
ficiency.
Financing Plans.
The requirements in the way of new
equipment for the Erie Railroad and the
Nickel Plate, the other main units of the
great Van Sweringen system, still re-
main to be definitely determined. but
the writer has been reliably informed
from executives of the system that these
requirements will bring the amount OF
immediate purchases by the Van Swer-
ingen interests to $100,000,000.
The individual roads will finance
these purchases individually, according
! to their various needs. Some will be
bought out of accumulated funds in the
| treasures of the roads. Others will be
| financed through short-term equipment
| trust certificates. The latter method is
! favored because the financiers involved
do not deem it an advantageous time to
| ~ -fot. no IN q
issues of new capital stock.
| This is specially true in regard to the
Erie. This road has put its first and
second preferred on dividend basis.
Moreover. there is small doubt that
the Erie will wind up this year with
earnings on the common OF more than
| Sc share after preferred dividend re-
quirernents;: The common STOCK earn
ings undoubtedly would have been over
| So a share had not the break in stocks
| disarranged business to some extent.
It was proposed at one time that the
| Erie should retire its present first and
| second preferred issues and replace
them with prior preferred without
altering the share position of the COM
mon. This was not acceptable to some
| holders of the present preferred, but
they may change their attitude in view
of the earning position of the common
as shown by the 1929 report, which is
to come. Should they do so, it is likely
that the prior preferred plan with the
shares bearing interest at per cent
instead of the 4 per cent now paid on
the preferred issues might be revived
In the meantime the Erie will do Its
financing through short-term equip
ment trust notes.
The foregoing is the first definite
| step taken in the railroad situation
since the announcement of the Inter-
state Commerce plan for consultations
of the carriers of the country into II
systems. 1t is held in the lmiteo
railroad circles which have become APP
rised of it that there are possibilities
| of agreement under the commission $
plan. or, if not that, that carriers will
at least know where they stand and
be free to pursue the course that seems
best to them.
Within a year the railroads of the
country will know whether the proposal
| for railroad consolidation represents
economic philandering" or whether il
has real possibilities of accomplishment
The legal lights attached to each OF
the 81 systems are burrowing like moles
beneath the surface of the I. G. c.
proposal.
1t is doubtful If single road In
volved is thoroughly pleased with the
plan. If they were, they would not
admit it.
| (Copyright, 1927