li'iillllllin' Digitized by the Internet Archive in 2008 with funding from IVIicrosoft Corporation http://www.archive.org/details/analysesofrailroOOoldcrich OttlStottii^t ^mfm^ CAPITAL $6,000,000 SURPLUS $8,000,000 E ^^^ ^^^^^^^^^<^^^^^^»^^ ^ ANALYSES OF THE RAILROAD CORPORATIONS WHOSE BONDS ARE A LEGAL INVESTMENT FOR MASSACHUSETTS SAVINGS BANKS Including a History of Each Corpora- tion, Comparative Capitalization, Earnings and Traffic Statistics, a Description of the Bonds Issued, Assumed, or Guaranteed by Each, the Range of Prices During the Years 1903 to 1912 inclusive, and the States of New England in which the Bonds Are Considered a Legal Investment For Savings Banks PRU'ATELY PRINTED BOSTON, MASSACHUSETTS Court Street • • Temple Place 11 " TM^^ ^ 5^^^^^^^^^^^^^^^^^^ ^<^^^^^ ^ CopynioBT, 1913, by Old Colony Trust Comp» TirK Onivehbity Pkess, (•amukiuge, U. S. A. rM lIIE information contained herein is not guaranteed, ■'- but has been taken from sources which we believe to be reliable. It has all been gathered and compiled in our office, and every effort has been made to avoid inaccuracies. Old Colony Trust Company 271805 CONTENTS PAGE Atchison, Topeka & Santa Fe Railway Company 9 Baltimore & Ohio Railroad Company 35 Bangor & Aroostook Railroad Company 71 Boston & Maine Railroad Company 89 Boston, Revere Beach & Lynn Railroad Company 121 Central Railroad Company of New Jersey 131 Chicago & Northwestern Railway Company 147 Chicago, Burlington & Quincy Railroad Company 179 Chicago, Milwaukee & St. Paul Railway Company 201 Chicago, St. Paul, Minneapolis & Omaha Railway Company . . . 227 Delaware & Hudson Company 243 Delaware, Lackawanna & Western Railroad Company 2(53 Great Northern Railway Company 281 Illinois Central Railroad Company 303 Lake Shore & Michigan Southern Railway Company 337 Louisville & Nashville Railroad Company 373 Maine Central Railroad Company 415 Michigan Central Railroad Company 443 New York Central & Hudson River Railroad Company 465 The New York, New Haven & Hartford Railroad Company . . . 515 Northern Pacific Railway Company 565 Pennsylvania Railroad Company 589 Rock Island System 655 Index to Bond Descriptions 687 ATCHISON, TOPEKA & SANTA FE RAILWAY COMPANY ATCHISON. TOPEKA & SANTA FE RAILWAY COMPANY HISTORY The Atchison, Topeka & Santa Fe Railway Company, once tlie largest single railway in the world, has developed, under splendid management, into one of the leading systems in the West, and still ranks among the ten greatest railroads in the United States. The original company was chartered in Kansas in February, 1859, and its main line was completed by 1873. The old Atchison, Topeka & Santa Fe Railroad Company commenced business at a most unfortunate time, and sufifered severely in the depression following the business crisis of 1873. Recovering from the effects of these earlier years, the company began an expansion period in which over three thousand miles of new road were constructed, and control over three thousand five hundred miles of other roads was obtained. This was during the decade beginning in 1880. By 1890, with its lease of the St. Louis & San Francisco Railroad, and the Colorado Midland Railroad Companies, it was operating over nine thousand miles — more than any other railroad in the world. The business depression of 1893 forced the Atchison, along with numy other roads, into bank- ruptcy, and it was shorn of a considerable part of its mileage. From the ruins of the old railroad rose the new Atchison, Topeka & Santa Fe Railway Company, chartered under the laws of Kansas in December, 1895. The new company absorbed various minor corporations from time to time, so that by 1912 it owned a total of 10,550 miles of main track, which, with over 700 miles of road separatelj^ oper- ated and recently constructed, brought the total mileage of the Atchison System up to over 11,250 miles. It owns practically the entire capital stocks of the Cane Belt Railroad; Eastern Railway of New Mexico; Gulf, Beaumont & Great Northern Railway; Gulf, Beaumont & Kansas City Railway; Gulf, Colorado & Santa Fe Railway; Rio Grande & El Paso Railroad; Santa Fe, Prescott & Phoenix Railway; Southern Kansas Railway of Texas; Texas & Gulf Railway; Concho, San Saba & Llano Valley Railroad; and, through the Eastern Railway of New Mexico, the stocks of the Pecos River Railroad and the Pecos & Northern Texas Railway Companies. The above properties are operated as an integral part of the Atchison System and their figures are included in the following tables of this analysis. Besides this, the Atchison controls the entire stock of the Beaumont Wharf & Terminal Company; 98% of the capital stock and the entire bond issues of the Garden City, Gulf & Northern Railway Company; 99% of the stock of the Grand Canyon Railway Company, and, jointly with the St. Louis & San Francisco Railroad Company, the stock of the Kansas Southwestern Railroad Company. Also, jointly with the Southern Pacific Company, the Atchison owns the capital stock of the North- western Pacific Railroad, the Sunset Railroad, and the Sunset Western Railway Companies. The last-named properties are operated under their own organizations, the Atchison's interest appear- ing on its income sheet in the form of interest and dividends on the securities owned. In December, 1911, the California, Arizona & Santa Fe Railway Company was incorporated in the interests of the Atchison, Topeka & Santa Fe Railway Company, and took over a group of small companies, aggregating 834' miles, that had been operated by the Atchison under a lease from the Southern Pacific Company. The California, Arizona & Santa Fe Railway Company has issued capital stock of $50,000,000, of which all but the directors' shares are owned by the Atchison, To- peka & Santa Fe Railway Company. The new company has issued also $18,299,695 First and Re- funding 43/2% Fifty-year Gold Bonds dated March 1, 1912. These have been used to retire a hke [9] amount of underlying bonds of the subsidiary companies taken over, that were not in the hands of the pubHc. These bonds are an obhgation of the Atchison, Topeka & Santa Fe Railway Company. During 1911 the Santa Fe Dock & Channel Company was organized to take over and operate the dock facilities at Port Bolivar, Texas. These properties were formerly owned by the Gulf & Interstate Railway Company of Texas. Terminal facilities in San Francisco are supplied by the Santa Fe Terminal Company of California, all of whose capital stock, except directors' shares, is owned by the Atchison, Topeka & Santa Fe Railway Company. These terminals comprise nearly one hundred acres, fifty-two of which are on the water front and have a total water frontage of 3,800 feet. In recent years, and especially since 1907, the Atchison has laid out enormous sums of money in new construction, reducing grades, eliminating curves and double tracking. Along with work of this nature has gone a continuous expansion of existing lines; extensions which should prove valuable feeders in the future. Just what all this means in actual dollars can be seen when one considers that during the six years ending 1912 the Atchison spent out of earnings approximately $181,000,000 for the maintenance of its existing tracks and equipment. During the same period over $117,000,000 was expended for additions and betterments to property and for new construction. PROPERTY On June 30, 1912, the lines of the Atchison System, whose operations are embraced in the fol- lowing statements, were as follows: 1912 1911 Atchison, Topeka & Santa Fe Railway 8,200.86 7,549.69 miles Rio Grande & El Paso Railroad 20.21 20.21 Gulf, Colorado & Santa Fe Railway 1,596.06 1,537.48 Eastern Railway of New Mexico 225.21 Pecos & Northern Texas Railway 478.67 296.12 Pecos River RaUroad 54.24 54.24 Santa Fe, Prescott & Phoenix Railway 364.24 Southern Kansas Railway of Texas 124.92 124.92 Texas & Gulf Railway 125.80 96.14 Gulf & Interstate Railway of Texas 71.97 71.97 Concho, San Saba & Llano Valley Railroad 60.15 60.15 Total mileage of the system (main track) . . . 10,732.88 10,400.37 The increase in mileage during the year was 332.51 miles. The average miles operated in 1912 were 10,627.92, an increase of 277.79 miles over the average mileage operated during the preceding fiscal year. The entire mileage is standard gauge and laid with steel rails ranging in weight from 56 to 90 pounds to the yard. The total extra main track operated on June 30, 1912, was 826.66 miles. Sidings, etc., amounted to over 3,600 miles. The system extends from Chicago, through Kansas City to Denver, and southerly and westerly through Santa Fe and Albuquerque, New Mexico, across Arizona to Los Angeles and San Francisco. From Albuquerque there are important branches extending into Texas; one to El Paso, one to Pecos, and one to (Jalveston and Houston. This latter line parallels the Southern Pacific throughout prac- tically its entire length. There is a network of Atchison lines in Kansas which feed an important through line from Kansas Cily to Galveston. A branch tapping the Beaumont oil fields runs from Port liolivar (Galveston 15uy) to Longview, Texas, and Oakdale, Louisiana, the latter being less than two hundred miles from New Orleans. The states which the Atchison serves include Illinois, Missouri, Kansas, Colorado, Oklahoma, Texas, New Mexico, Arizona and California. The population of the above in 1900 was 15,188,000. In 1910 it had increased to nearly 20,000,000. [ 10] CAPITALIZATION The capitalization of the Atcliison System, as of June 30, 1912, was as follows: Capital stock: Common $170,129,500 Preferred 114,173,730 Total capital stock $284,303,230 Funded debt outstanding 342,645,015 Gross capitalization $626,948,245 Securities owned 11,655,624 Net capitalization $615,292,621 Net capital per mile operated $57,892 Average miles operated 10,627.92 Net income to net capital 6.3% Fixed charges to net income 49.6% Margin of safety 50.4% There are no rental obligations save nominal ones for certain terminal rights, almost the entire system being directly owned. The total capital stock outstanding per mile in 1912 was $26,749. The policy of the Atchison has been to finance its extensions and property betterments through the sale of convertible bonds. To cover these outstanding con^^ertible bonds, the company has an authorized common stock cap- ital of $350,000,000, of which but $170,129,500 was outstanding June 30, 1912. The total preferred stock authorized was $131,486,000, of which $114,173,730 was outstanding as above. In October, 1911, the stockliolders of the company granted the directors the authority to sell the unissued bal- ance of this preferred stock. Of the total funded debt outstanding June 30, 1912, $78,560,000 were represented by con- vertible bonds and $201,980,500 by the General Mortgage and Adjustment Mortgage bonds of 1995. $17,000,000 of the total were the Transcontinental Short Line, First Mortgage 4s of 1958, and the balance were issues of subsidiary roads. The total bonds outstanding per mile amounted to $32,239. The proportion of funded debt to the total capitalization in 1912 was 54%. In the decade ending 1912 the total capitalization of the system rose from $444,000,000 to approximately $627,000,000 — an increase of $183,000,000. Since 1908 there have been large increases in capital stock. In 1909, $18,603,000; in 1910, $43,959,000; in 1911, $2,912,000; and for the year ending June 30, 1912, $1,699,000 of common stock was issued to retire convertible bonds. These large capital increases should cause no apprehension on the part of stockholders or se- curity holders while gross earnings continue to increase as they have in the past. The road has un- dergone a process of expansion, not only in mileage operated, but in volume of traffic carried; and the growth of business has been more than sufficient to justify the capital expenditures made. A glance at the statistics at the end of this analysis will show that the average miles operated increased from 7,341 in 1900 to 10,628 in 1912. Gross earnings increased from $6,297 per mile in 1900 to $10,139 per mile in 1912. The most significant increase, however, is in the ratio of gross earnings to gross capital. This ratio in 1900 was 11.4% and in 1912 17.2%, or 5.8% better. On October 26, 1911, the stockholders of the Atchison authorized the Board of Directors to create at any time an issue or issues of convertible bonds, the total not to exceed $100,289,000. To cover this liability the authorized common stock of the company was increased $100,000,000, to $350,000,000. Following is a comparison of the average net capitalization per mile of the Atchison for [11 ] the decade ending 1912, with the Northern Pacific and the Chicago, Burhngton & Quiucy, two other big crop-carrying systems: Net capital Net income to per mile net capital Atchison $56,020 6.1% Northern Pacific 68,208 8.4 Burhngton 30,670 9.1 During the period in question the Atchison's ratio of net income to net capital dropped below 6% but twice — in 1905 and 1908, when 5.0% and 5.7% were reported. This fact speaks impres- sively for the stability of earnings of the system, and especially of the ability of its earnings to keep pace with the increases in capitalization. The Atchison's fixed charges in 1912 utilized 49.6% of its total net income, leaving a factor of safety in earnings of 50.4%; that is, of every $100 of income available for fixed charges, $49.60 was thus spent. The Burlington figures for 1912 show that it spent $50 of every $100 of income available for fixed charges, while the Northern Pacific spent but $35.70. CHARACTER OF TRAFFIC In the early years of the reorganized company, its prosperity depended to a very great extent upon agricultural products. It will be seen by an examination of the table below that the ratios of farm and animal products to total freight have declined, while those of mines, forests and manu- factures have shown considerable increases. Products of 1896 1906 1908 1909 1910 1911 1912 Agriculture .... 30.7% 24.3% 22.8% 23.1% 20.7% 22.3% 22.2% Animals 12.4 7.8 7.9 8.2 7.1 7.7 7.3 Mines 26.5 31.2 32.0 28.3 29.3 28.3 30.9 Forests 9.4 13.2 12.4 13.7 12.1 11.1 10.2 Merchandise . . .21.0 23.5 24.9 26.7 30.8 30.6 29.4 . 21.0 23.5 24.9 26.7 30.8 30.6 29.4 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% le svstem in 1896 was 7.718.598. In 1912 the total revenue tons n The total tonnage of the system in 1896 was 7,718,598. In 1912 the total revenue tons moved were 21,149,984, of which the largest item, 6,546,940 tons, represented the products of mines. This latter figure was within 1,172,000 tons of the total tonnage of 1896. The 1912 total compares with 20,093,719 tons carried in 1911 — a gain of 1,056,265 tons, or 5.2%. About two-thirds of the company's business is freight. Following are some of the more im- portant freight statistics for the six years ending 1912: Year Freight Train load Freight Average rate per density tons earnings ton per mile 1907 737,913 365 $65,500,309 $.0096 1908 691,927 366 61,848,638 .0095 1909 639,119 366 64,212,638 .0103 1910 707,230 389 71,194,055 .0102 1911 674,538 400 71,787,200 .0103 1912 655,882 400 71,529,574 .0103 Freight density shows a tendeiu-y to decline, but not by reason of declining traffic. The cause lies rather in the fact that within tiic ])t'riu(l mileage increased faster than freight traffic. Tonnage in 1907 was 16,979,395; in 1912, 21,149,984, and in every year but one since 1907 a gain was recorded. The marked advance in train load tons, from 365 in 1907 to 400 in 1912, clearly demon- strates increasing operating efficiency. [12] It will be seen that freight earnings have increased $6,000,000 since 1907, a gain of 9.2%, while the rate per ton per mile advanced from $.0090 in 1907 to $.0103 in 1912. The passenger lousiness of the system represents over 25% of the total and is proving of growing importance as a revenue producer. Passenger earnings of the system since June 1, 1897, the first complete year after the reorganization, have increased nearly 379%. For the fiscal year 1897 they were but $5, 571', 288, while in 1912 the company reported passenger earnings of $27,453,525. Following are some of the important passenger statistics of the system since, and including, 1907: Year Passenger Passenger Average rate per density earnings passenger per mile 1907 104,567 $21,171,629 $.0218 1908 109,270 21,643,427 .0210 1909 113,129 22,734,505 .0205 1910 124,746 25,437,181 .0206 1911 122,616 27,204,867 .0214 1912 119,889 27,453,525 .0215 Passenger receipts have risen $6,300,000 in six years, the most substantial gains being reported in 1910 and 1911. The number of passengers carried in 1909 was 12,605,697. In 1910 this increased to 13,675,343, a gain of over 1,000,000; in 1911 the figure was 14,101,076, an increase of 425,000; and in 1912, 14,042,522. During the fiscal year of 1911 passenger earnings increased $1,767,784, again of 7%. This gain was helped by an increase of nearly one mill in the average rate per passenger per mile. In 1912 the Atchison practically paralleled its record passenger business of 1911. EARNINGS The wonderful expansion of freight and passenger business in the fifteen years ending 1912 was reflected in gross earnings, which gained 250% during the period. In 1897 the system reported gross earnings of $30,621,230. In the decade ending 1907 this figure rose to $93,683,407, while for the fiscal year of 1912 gross earnings were $107,752,360. In but one j-ear of the fifteen (1908) was there a decline. The average miles operated in 1897 were 6,444, while for the fiscal year of 1912 the system's mileage averaged 10,628, a gain of nearly 4,200 miles. Following are the gross and net earnings of the Atchison for the sLx fiscal years ending 1912: Year Average miles Gross Per mile Net Per mile Operating operated earnings earnmgs ratio 1907 . . . 9,273 $93,683,407 $10,103 $34,815,506 $3,756 62.84% 1908 . . . 9,415 90,617,796 9,624 29,793,833 3,209 67.12 1909 . . . 9,795 94,265,717 9,623 36,770,522 3,754 60.99 1910 . . . 9,916 104,993,195 10,588 35,231,375 3,554 66.44 1911 . . 10,350 107,565,116 10,393 36,796,864 3,556 65.79 1912 . . 10,628 107,752,360 10,139 36,479,157 3,433 66.13 MAINTENANCE The following amounts have been spent for maintenance of way and equipment since 1907: Year Maintenance Total Per mile Way Equipment maintenance 1907 $15,286,062 $11,779,846 $27,065,908 $2,918 1908 14,120,828 14,246,621 28,367,449 3,013 1909 12,884,406 13.903,897 26,788,303 2,734 1910 17,807,136 15,560,047 33,367,183 3,365 1911 16,059,786 16,686,145 32,745,931 3,164 1912 16,076,834 16,521,231 32,598,065 3,067 [ 13] That a most liberal policy has been carried out by the management in regard to its maintenance charges, is attested by the fact that during the six years ending 1912 the Atchison put nearly $181,000,000 of its earnings back into its property. This is an average of $30,000,000 annually, or over $3,000 per mile. The Northern Pacific, in 1912, put but $2,500 a mile into upkeep of tracks and equipment, while the Burlington spent $3,068, or as much as the Atchison did, though the Burlington traffic density was over 195,000 greater, implying thereby more wear and tear upon its property. ADDITIONS AND BETTERMENTS Besides the above charges to maintenance, the company has made a total expenditure in the six years, 1907 to 1912 inclusive, of $117,077,433 for additions and betterments, construction and other capital purposes, as follows: Year Betterments Construction Total expenditures 1907 $9,383,159 $6,090,416 $15,473,575 1908 19,534,571 2,925,437 22,460,008 1909 4,018,930 896,743 4,915,673 1910 23,777,754 7,140,667 30,918,421 1911 25,866,624 5,700,110 31,566,734 1912 10,276,984 2,066,038 12,343,022 $117,677,433 Out of earnings the company wrote off, in 1907, $9,600,000 for improvements, and $340,000 in 1908. The income sheet shows an appropriation for betterments of $9,000,000 in 1909; $4,000,000 in 1910; $5,000,000 in 1911 and $3,300,000 in 1912. During the period (1907 to 1912 inclusive) the Northern Pacific spent nearly $109,000,000 for additions and betterments, the Burlington $52,000,000 and the Chicago & Northwestern $97,000,000. DIVIDENDS Dividends were first paid on the common stock in 1901 at the rate of 33/0% per annum. From 1902 to 1906, 4% was paid; in 1907 and 1908, 5}4%; in 1909, 5%; in 1910, 1911, and 1912, G%. Since 1900, 5% has been regularly paid on the preferred stock outstanding. On the balance sheet of the Atchison, as of June 30, 1912, there appears a Profit and Loss ac- count of $20,470,115, which,with an appropriated surplus of $21,580,921, makes a total of $42,051,036. This is equivalent to 14.8% of the total outstanding capital stock. STATISTICS On the following page ai-e the capitalization, earnings and traffic statistics of the Atcliison, Topeka & Sunta Fe Railway, based on the average miles operated, for the year 1900 and for the years 1905 to 1912 inclusive. [ 14 ATCHISON, TOPEKA & SANTA FE RAILWAY Fiscal year Funded debt Gross capital Owned by company Net Average miles capital operated Extra main track 1900 $15,556 $13,894 $25,642 $55,092 $446 $54,646 7,341 82 1905 13,751 12,292 29,648 55,691 754 54,937 8,305 178 1906 13,540 12,094 32,663 58,297 976 57.321 8,434 309 1907 12,312 11,103 30,645 54,060 722 53,338 9,273 363 1908 12,127 10,935 33,505 56,567 802 55,765 9,415 433 1909 11,056 12,410 31,773 55,839 861 54,978 9,795 517 1910 11,514 16,692 30,456 58,662 1,283 57,379 9,916 552 1911 11,031 16,273 31,797 59,101 1,098 58,003 10,350 712 1912 10,742 10,007 32,239 58,988 1,096 57,892 10,628 820 Fiscal Gross operating Maintenance Transportation Net Other Total Fixed Surplus avail- year revenue and general operating income net income charges able for Way Equipment expense revenue dividends 1900 1905 1906 1907 1908 1909 1910 1911 1912 $6,297 8,233 9,253 10,103 9,624 9.623 10,588 10,393 10,139 1,371 1,479 1,048 1,500 1,315 1,796 1,552 $717 1,314 1,271 1,270 1,513 1,419 1,569 1,612 $2,166 $2,549 1,513 1,554 2,795 3,000 3,429 3,402 3,135 3,670 3,673 3,639 2,753 3,503 3,756 3,209 3,754 3,554 3,556 3,433 $36 159 81 71 118 257 213 241 $2,585 2,851 3,662 3,837 3,280 3,872 3,811 3,769 3,674 $1,258 1,436 1,560 1,553 1,783 1,787 1.750 1,703 1,824 $1,327 1,415 2,102 2,284 1,497 2,085 2,061 2,066 1,850 Fiscal Dividends Other Surplus Operating Total mai year charges expenses tenance 1905 687 $491 $169 677 483 559 383 1907 615 609 1,056 4 1908 606 601 45 245 1909 582 526 935 42 1910 575 973 474 39 1911 551 959 523 33 1912 537 956 348 9 65.79 66.13 Conducting Fixed transports- charges to gross tion to gross to gross earnings earnings earnings 32.6 29.7 28.9 31.3 28.4 31.8 30.4 30.2 1.53% 25.1% 34.4% 34.1 32.6 33.9 35.4 32.6 34.6 35.3 35.9 '.0% 17.5 17.0 15.5 18.6 18.6 16.5 16.4 17.9 Gross Net income Per cent earned earnings to net on capital stock to gross capital capital Preferred Common 11.4% 14.7 15.9 18.7 17.0 17.2 18.1 17.5 3.5% 6.4% 10.3 15.5 18.5 12.3 17.9 5.9 11.8 15.0 8.1 12.1 8.1 9.4 Fiscal Train year mile earnings (gross) 1900 $1.82 1907 1908 1909 1910 1911 1912 2.26 2.43 2.38 2.52 2.47 2.52 2.50 Maintenance Conducting Train Rate per mile per revenue transportation mile train mile per revenue earnings Per pas-] Per ton Way Equipment train mile (net) senger $.251 .365 .361 .397 .370 .345 .417 .375 .374 $.204 .350 .310 .306 .374 .372 .837 .901 .790 .982 .0216 .0213 .0094 .0218 .0096 .0210 .0095 .0205 .0103 .0206 .0102 .0214 .0215 Freight Train load Freight density revenue to all tons traffic .738 $.0226 $.0098 470,558 .0010 569,668 692,604 737,913 691.927 639,119 707,230 .0103 674,538 .0103 655,882 302 365 73% freight and company cars 29,395 40,192 45,346 51,126 56,593 56,172 59,651 66,124 65,400 7,177 miles are covered directly by the General Mortgage. 1,392 miles are covered through collateral by the General Mortgage. [ 15 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Atchison, Topeka & Santa Fe Railway System, together with the bases uiJon which they have sold during the decade ending December 31, 1912: ATCHISON, TOPEKA & SANTA FE RAILWAY General Mortgage Gold 4s Dated December 12, 1895 Maturing October 1, 1995 Interest payable April 1 and October 1 at 5 Nassau Street, New York. Coupon bonds of $500 and $1,000, registerable as to principal, or fully registerable. Registered bonds of $1,000 and multiples. Authorized $165,490,500 Outstanding $150,634,500 Per mile . . 17,580 Provisions of Of the total amount authorized, $150,634,500 are outstanding as above, $1,928,000 are held issue: in the treasury of the company, $1,852,100 are reserved for extensions and improvements, and the balance are reserved to retire certain bond issues of the company. Security: The above bonds are secured by a direct mortgage, or by collateral trust, on 8,568.99 miles of road, terminals, equipment and all appurtenances. They are secured by a first mortgage on 5,203.71 miles; in effect, by a first mortgage on 1,392.08 miles of road through the deposit with the trustee of all the bonds and capital stock issued by the corporations operating the same. They are further secured by a second mortgage on 1,884.57 miles of road covered by the first liens of the Chicago & St. Louis First 6s of 1915, Chicago, Santa Fe & California First 5s of 1937, the Hutchinson & Southern First 5s of 1928, the San Francisco & San Joaquin Valley First 5s of 1940, the Atchison, Topeka & Santa Fe-East Oklahoma Division First 4s of 1928, and the Transcontinental Short Line First 4s of 1958. They are secured by a third mortgage on 89.01 miles, covered by the first mortgage of the Chicago & St. Louis First 6s and, in addition, by stocks and bonds of a par value of $31,635,597, deposited with the trustee. Equity: These bonds are prior in lien to the Atchison, Topeka & Santa Fe Adjustment Mortgage Gold 4s of 1995. Union Trust Company, New York. These bonds sold in 1902 on a 3.77 to 4.00 basis 1903 3.87 4.10 1904 3.85 4.05 1905 3.80 3.95 1906 3.82 4.00 1907 3.90 4.50 1908 3.92 4.20 1909 3.90 4.02 1910 3.95 4.10 1911 4.02 4.15 1912 4.00 4.15 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Rhode Island and Connecticut. f 18 ATCHISON, TOPEKA & SANTA FE RAILWAY Adjustment Mortgage Gold 4s Dated Deceinher 12, 1895 Maturing July 1, 1995 Interest originally payable annually on November 1 at 5 Nassau Street, New York. Interest is now payable semi-annually. May 1 and November 1, upon complying with the terms of an agreement dated September 14, 1899. Up to July 1, 1900, interest was non-cumulati\e and payable, if earned; since July 1, 1900, interest is cumulative. Coupon bonds of $500 and $1,000, registerable as to principal, or fully registerable. Registered bonds of $1,000 and multiples. Authorized $71,728,000 Outstanding $51,346,000 Per mile . . 5,992 Provisions of Of the total amount authorized, $51,346,000 are outstanding, as above; $382,000 are held in issue: the treasury of the company, and the balance, $20,000,000, are issuable at the rate of not more than $2,000,000 per annum for construction, improvements and betterments, but only with the consent of a majority of the holders of the outstanding bonds. Security: The above bonds are secured by direct mortgage, or by collateral trust, on the same 8,568.99 miles of road, and other property subject to the lien of the General Mortgage Gold 4s of 1995, to which this is a junior issue. Trustee: Central Trust Comiiany, New York. These bonds .sold in 1902 on a 4.10 to 4.70 basis 1903 4.30 4.70 1904 4.15 4.60 1905 4.05 4.30 1906 4.10 4.40 1907 4.30 5.20 1908 4.20 4.70 1900 4.20 4.35 1910 4.20 4.55 1911 4.35 4.45 1912 4.35 4.60 These bonds are considered a legal investment for savings banks in Maine, New Ham])shire and Rhode Island. [ 19 ATCHISON, TOPEKA & SANTA FE RAILWAY Transcontinental Short Line Gold 4s Dated July 1, 1908 Maturing July 1, 1958 Interest payable January 1 and July 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Authorized $30,000,000 Outstanding $17,000,000 Per mile . . 20,310 Provisions of Of the total amount authorized, $17,000,000 are outstanding as above, and the balance, issue: $13,000,000, have been reserved for future improvements, acquisitions, or extensions at not exceeding $25,000 per mile. Security: These bonds are secured by a direct mortgage, or by collateral trust, on 837.11 miles of road and all appurtenances. They are secured by a first mortgage on 486.75 miles, and, in effect, a first mortgage on 350.36 miles through the deposit with the trustee of all the bonds and stocks of the corporations operating the above mileage. The above bonds are a joint obligation of the Atchison, Topeka & Santa Fe Railway Company and the Eastern Railway Company of New Mexico, whose capital stock is entirely owned by the former. Equity: These bonds are prior in lien to the General Mortgage Gold 4s of 1995 and the Adjustment Mortgage Gold 4s of 1995. Redemption: These bonds are redeemable at 110 and interest, uj)on any interest date, upon 90 days' notice. Trustee: Guaranty Trust Company, New York. These bonds sold in 1908 on a 4.12 to 4.25 basis 1909 4.20 4.30 1910 4.25 4.40 1911 4.27 4.37 1912 4.30 4.37 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachusetts and Rhode Island. February 1, 1912, the Atchison, Topeka and Santa Fe Railway Company acquired the road and equipment of the Eastern Railway Company of New Mexico, and the property will hereafter be operated by the former in its name. [20] ATCHISON, TOPEKA & SANTA FE RAILWAY Serial Debenture Gold 4s Series "A" to "L" Dated February 1, 1902 Maturing February 1, 1913/1914 Interest payable February 1 and August 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and multiples. Coupon and registered bonds interchangeable. Issued $30,000,000 Outstanding $2,978,000 Provisions of The above issue originally consisted of twelve series of $2,500,000 each. Series "A" to "J" issue: have been retired, leaving outstanding Series "K" and "L," amounting to $2,978,000. Security: These bonds are a direct obligation of the Atchison, Topeka & Santa Fe Railway Company, but are not secured by a mortgage. The company agrees in its indenture "that it will not execute a new mortgage on any of its lines unless by the terms of such new mortgage it shall be provided that all of the above indentures then outstanding shall be included in the debt secured by such new mortgage." Redemi)tion: The above bonds are redeemable at 105 and interest, by series only, on any interest date, upon 90 days' notice. Trustee: Guaranty Trust Company, New York. These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. ATCHISON, TOPEKA & SANTA FE RAILWAY Convertible Gold 4s ^ , , [April 1, 1905 Maturing June 1, 1955 ^''^^'^iJunel, 1909 Interest payable June 1 and December 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Issued $20,638,000 Outstanding $19,661,000 Provisions of Of the total amount issued, $977,000 are in the treasury of the company, and the balance, issue: $19,661,000, are outstanding as above. Security: These bonds are a direct obligation of the company, but are not secured by a mortgage. The indenture provides that no new mortgage shall be executed upon the property of the company owned as of January 1, 1905, without equally securing these bonds. Convertibility : The above bonds are convertible at par into the common stock of the company at any time up to June 1, 1918. [21 ] Redemption: They are redeemable at 110 and interest, on any interest date, upon five months' notice. If called prior to June 1, 1918, they may be converted at the option of the holder into the com- mon stock of the company. Trustee: Guaranty Trust Company, New York. These bonds sold in 1905 on a 4.00 basis 1906 3.55 to 4.00 basis 1907 3.90 4.55 1908 3.75 4.75 1909 3.05 3.88 1910 3.05 3.95 1911 3.30 3.85 1912 3.62 3.70 These bonds are considered a legal investment for savings banks in New Hampshire. ATCHISON, TOPEKA & SANTA FE RAILWAY Convertible Gold 5s Dated June 1, 1907 Maturing June 1, 1917 Interest payable June 1 and December 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Issued $15,213,000 Outstanding $15,213,000 Security: The above bonds are a direct obligation of the Atchison, Topeka & Santa Fe Railway Company, but are not secured by a mortgage. The indenture provides that no new mortgage shall be executed against the property of the company owned as of January 1, 1907, without equally securing these bonds. Convertibility : The above bonds are convertible at par into the common stock of the company at any time up to May 31, 1913. Redenijjtion : They are redeemable at 110 and interest, on any interest date, upon 90 days' notice. If called prior to May 31, 1913, they may be converted at the option of the holder into the com- mon stock of the company. Trustee: Standard Trust Company, New York. These bonds sold in 1907 on a 4.75 to 6.00 basis 1908 3.90 5.75 1909 2.00 4.15 1910 2.00 4.20 1911 2.00 4.00 1912 2.90 3.95 These bonds are considered a legal investment for .savings banks in New Hampshire. [22] ATCHISON, TOPEKA & SANTA FE RAILWAY Convertible Gold 4s Dated June 1, 1910 Maturing June 1, 1960 Interest payable June 1 and December 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000 and multiples. Coupon and registered bonds interchangeable. Issued $43,686,000 Outstanding $43,686,000 Security: The above bonds are a direct obligation of the Atchison, Topeka & Santa Fe Railway Company, but are not secured by a mortgage. The indenture provides that no new mortgage shall be executed against the property of the company owned as of January 1, 1907. without equally securing these bonds. Convertibility: The above bonds are convertible at par into the common stock of the company at any time between June 1, 1913, and June 1, 1923. Redemption: They arc redeemable at 110 and interest, on any interest date, upon 90 days' notice. If called between June 1, 1913, and June 1, 1923, they may be converted at the option of the holder into the common stock of the company. Trustee: Guaranty Trust Company, New York. These bonds sold in 1910 on a 3.80 to 4.10 basis 1911 3.75 4.15 1912 3.70 4.00 These bonds are considered a legal investment for savings banks in New Hampshire. ATCHISON, TOPEKA & SANTA FE RAILWAY Eastern Oklahoma Division First Mortgage Gold 4s Dated February 26, 1903 Maturing March 1, 1928 Interest payable March 1 and September 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000 and multiples. Coupon and registered bonds interchangeable. Issued .$9,603,000 Outstanding $9,603,000 Per mile . . 20,058 Provisions of The original amount of this issue authorized was $10,000,000, of which $9,603,000 are outstand- issue: ing as above. The balance, $397,000, will not be issued. Security: The above bonds are a direct obligation of the Atchison, Topeka & Santa Fe Railway Com- pany, and are secured by a direct first mortgage on 478.75 miles of road including two impor- tant lines, one from Newkirk to Paul's Valley, Okla., 184 miles, the other from Guthrie, Okla., to Kiowa, Kas., 113 miles. [ 23 ] Equity: These bonds are prior in lien to the General 4s of 199.5 and the Adjustment 4s of 1995 of the Atchison, Topeka & Santa Fe Railway Company. Trustee: Guaranty Trust Company, New York. The Eastern Oklahoma Railway Company, who,se property is mortgaged under the indenture of this issue, was incorporated under the laws of Oklahoma in July, 1899. Its property was leased for 25 years from JNIarch 1, 1903, to the Atchison, Topeka & Santa Fe Railway Company at an amiual rental equal to fixed charges. In 1907 the property was consolidated into that of the latter, forming the Eastern Oklahoma Division of the Atchison System. These bonds sold in 1903 on a 4.35 to 4.40 basis 1904 4.05 4.50 1905 3.90 4.10 1906 3.90 4..30 1907 4.50 4.70 1908 4.10 4.35 1909 4.05 4.30 1910 4.20 4.35 1911 4.20 4.35 1912 4.30 4.55 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachusetts and Rhode Island. SAN FRANCISCO & SAN JOAQUIN VALLEY RAILWAY First Mortgage Gold 5s Dated October 1, 1896 Maturing October 1, 1940 Interest payable April 1 and October 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $6,000,000 Outstanding $6,000,000 Per mile . . 16,012 Security: The above bonds are secured by a first mortgage on the entire property of the company, in- cluding 374.71 miles of road, equipment, and all future acquisitions. Equity: These bonds are prior in lien to the General 4s of 1995 and the Adjustment 4s of 1995 of the Atchison, Topeka & Santa Fe Railway Company. Rcdein])li()u: The above bonds are redeemable for the sinking fund at 110 and interest on or after January 1, 1916, if not purchasable for less. Sinking fund: On or after January 1, 1916, the company agrees to provide a .sinking fund which shall be equal to 1% annually of the net profits of the company from that date to January 1, 1921, 2% annu- ally of the net profits from January 1, 1921, to January 1, 1926, 3% annually of the profits between 1926 and 1931, 4% annually of the profits between 1931 and 1936, and 5% annually thereafter, the same to be used to retire this issue at not exceeding 110 and interest. Trustee: Bankers Trust Company, New York. [24 ] The San Francisco & San Joaquin Railway Company was chartered February 26, 1895, and its road was opened for traffic in 1898. It was purchased by the Atcliison, Topeka & Santa Fe Railway Company in December, 1898, Init was not incorporated into the Atchison System until July 1, 1899. These bouds were quoted in 1909 on a 4.20 basis (bid). 1910 4.40 1911 4.35 1912 4.37 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachusetts and Rhode Island. CHICAGO & ST. LOUIS RAILWAY First Mortgage Currency 6s Dated March 1, 1885 Maturing March 1, 1915 Interest payable March 1 and September 1 at 5 Nassau Street, New York. Coupon bonds of .$1,000, registerable as to i)rincipal. Authorized $1,500,000 Outstanding $1,500,000 Per mile . . 10,G40 Security. These bonds are secured by a first mortgage on 141.07 miles of road, including the line from Corwith to Ancona, 111., 89.01 miles; also lands, depots, equipment, etc. Equity: The bonds are prior in lien to $560,000 Chicago, Santa Fe & California 5s of 1937 and to the Atchison, Topeka & Santa Fe Adjustment 4s of 1995, also to the Atchison, Topeka & Santa Fe General 4s of 1995, a sufficient number of which are reserved to retire these bonds at maturity. Trustee: Farmers' Loan & Trust Company, New York. The Chicago & St. Louis Railway Company was incorporated in Illinois January 1, 1885, and on May 1 of the same year succeeded to the property of the Chicago, St. Louis & Western Railroad Company. It was consolidated with the Chicago, Santa Fe & California Railway Company, whose property, in turn, was consolidated with the Atchison, Topeka & Santa Fe Railway Company in 1900. These bonds sold in 1908 on a 4.50 basis 1909 4.05 1910 4.20 1911 4.25 December, 1912 4.25 (bid) These bonds are considered a legal investment for sa\ings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. CHICAGO, SANTA FE & CALIFORNIA RAILWAY First Mortgage Gold 5 s Dated January 1, 1887 Maturing January 1, 1937 Interest payable January 1 and July 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $5,000. Authorized $35,000 per mile Outstanding $560,000 Per mile . . 1,280 Provisions of $15,350,000 bonds have been issued, of which $14,790,000 are deposited with the Trustee of issue: the Atchison, Topeka & Santa Fe General 4s of 1995, and $560,000 are outstanding as above. No more of the bonds will be issued, according to the terms of the General Mortgage 4s of 1995. Security: The bonds are secured by a direct mortgage on 439.93 miles of road; also on equipment, future acquisitions, etc. They are secured by a first mortgage on 350.92 miles, extending from An- cona. 111., to Big Blue Junction, Mo. They are also secured by a second mortgage on 89.01 miles, extending from Corwith to Ancona, 111. Equity: These bonds are prior in lien to the Atchison, Topeka & Santa Fe Adjustment 4s of 1995; also to the Atchison, Topeka & Santa Fe General 4s of 1995, which provide for the retirement of this issue. Trustee: Boston Safe Deposit & Trust Company, Boston. The Chicago, Santa Fe & California Railway Comjiany was incorporated in Iowa December 3, 1886, and subsequently acquired the railroad and other properties of the Chicago & St. Louis Railway Company. It built an extension from the Western terminus of tlie Chicago & St. Louis Railway to Kansas City, Mo., which was opened for business in April, 1888. The property of the Chicago, Santa Fe & California Railway Company was deeded to the Atchison, Topeka & Santa Fe Railway Company in 1900. These bonds are considered a legal investment for sa\ings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. [26 1 SANTA FE, PRESCOTT & PHOENIX RAILWAY First Mortgage Gold 5s Dated September 1, 1892 Maturing September 1, 1942 Interest payable March 1 and September 1 at Bankers' Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $4,940,000 Per mile . . 25,330 Security: The above bonds are secured by a first mortgage on 195.35 miles of road extending from Ash Fork to Phoenix, Ariz.; also on equipment and future acquisitions. The Atchison, Topeka & Santa Fe Railway Company agrees that the Santa Fe, Prescott & Phoenix Railway Company shall receive 5% of the gross earnings of interchanged business, which sum is to be applied to the payment of the principal and interest of the above bonds. Equity: These bonds are prior in lien to the Atchison, Topeka & Santa Fe Railway-California-Arizona Lines First and Refunding 43'^s of 1962, a sufficient number of which have been reserved to re- tire this issue. Trustee : Bankers Trust Company, New York. The Santa Fe, Prescott & Phoenix Railway Company was chartered under the laws of Arizona for 50 years from May 27, 1891. The road was opened for traffic March 13, 1895. It was con- trolled by the Atchison, Topeka & Santa Fe Railway Company, through ownership of its entire capital stock, except directors' shares, until December, 1911, when it was merged into the California, Arizona & Santa Fe Railway Company. The latter is entirely owned by the Atchison, Topeka & Santa Fe Railway Company. These bonds sold in 1904 on a 4.45 basis 1905 4.45 1906 4.30 to 4.60 1907 4.50 4.87 1908 4.45 1909 4.25 4.40 1910 4.45 4.55 1911 4.45 4.50 1912 4.35 4.50 These bonds are considered a legal investment for savings banks in Rhode Island. [ 27 HUTCHINSON & SOUTHERN RAILWAY First Mortgage Gold 5s Dated January 1, 1898 Maturing January 1, 1928 Interest payable January 1 and July 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal, Authorized $770,000 Outstanding $192,000 Per mile . . 1,360 Provisions of Of the $719,000 bonds issued, $527,000 are owned by the Atchison, Topeka & Santa Fe Rail- issue: way Company, and $192,000 are outstanding as above. Security: The above bonds are secured by a first mortgage on 141.38 miles of line, extending from Hutchinson, Kas., to Ponca City, Okla.; also on equipment, etc. Equity: The bonds are prior in lien to the Atchison, Topeka & Santa Fe General 4s of 1995 and to the Adjustment 4s of 1995. Redemption: These bonds are redeemable at 105 and interest on any interest date. Trustee: Old Colony Trust Company, Boston. The Hutchinson & Southern Railway Company was chartered December 21, 1897, and its property was consolidated with the Atchison, Topeka & Santa Fe Railway Company on October 1, 1899. These bonds were quoted in 1910 on a 5.00 basis (bid) 1911 5.00 December, 1912 4.75 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts and Rhode Island. GULF, BEAUMONT & KANSAS CITY RAILWAY First Mortgage Sinking Fund Gold 6s Dated July 25, 1893 Maturing August 1, 1913 Interest payable February 1 and August 1 at 5 Nassau Street, New York. Coupon bonds of $500. Authorized $750,000 Outstanding $591,000 Per mile . . 9,454 Provisions of Of the $750,000 authorized, $156,000 are owned by the Atchison, Topeka & Santa Fe Railway issue: Company, $3,000 have been cancelled, and $591,000 are outstanding as above. Security: The bonds are secured by a first mortgage on 62.62 miles of line, extending from Beaumont to Rogan, Texas; also on future acquisitions. [ 28 ] The bonds are GUARANTEED as to INTEREST by the Gulf, Colorado & Santa Fe Railway Company, all the stocks and bonds of which are owned by the Atchison, Topeka & Santa Fe Railway Company. Sinking fund: A sinking fund of 10% of the net income is applied annually to the purchase of these bonds at a price not to exceed 120. If bonds are not so purchasable, the sinking fund may be invested in other securities. Equity: The above bonds are prior in lien to the Gulf, Beaumont & Kansas City Railway Second 5s and 6s of 1913. Trustee: American Trust Company, Boston. The Gulf, Beaumont & Kansas City Railway Company was chartered under the laws of Texas in 1893, and its road was opened for traffic in 1899. The entire capital stock of the company is owned by the Atchison, Topeka & Santa Fe Railway Company, and its property is leased to June 30, 1913, to the Gulf, Colorado & Santa Fe Railway Company. These bonds sold in 1903 on a 5.30 basis. These bonds were quoted in 1909, 1911 and 1912 on a 6.00 basis. GULF, BEAUMONT & KANSAS CITY RAILWAY Second Mortgage Gold 5s and 6s Dated July 27, 1893 Maturing August 1, 1913 Interest payable February 1 and August 1 at 5 Nassau Street, New York. Coupon bonds of $500. Authorized $750,000 Outstanding (6s) $115,500 (5s) 97,500 Per mile .... 3,400 Provisions of Of the $750,000 authorized, $537,000 are owned by the Atchison, Topeka & Santa Fe Railway issue: Company, and the remainder, $213,000, are outstanding as above. Security: The above bonds are secured by a second mortgage on the 62.62 miles of line from Beaumont to Rogan, Tex., covered by the first lien of the Gulf, Beaumont & Kansas City First 6s of 1913. The bonds are GUARANTEED as to INTEREST by the Gulf, Colorado & Santa Fe Railway Company, all the stocks and bonds of which are owned by the Atchison, Topeka & Santa Fe Railway Company. Sinking fund: A sinking fund of 10% of the net income is applied annually to the purchase of these bonds at a price not to exceed 120. If bonds are not so purchasable, the sinking fund may be invested in other securities. Trustee: American Trust Company, Boston, Mass. For history, see above. [ 29 ] PRESCOTT & EASTERN RAILROAD First Mortgage Gold 5s Dated April 1, 1898 Maturing April 1. 1928 Interest payable April 1 and October 1 at 5 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $500,000 Outstanding $224,000 Per mile . . 8,480 Provisions of Of the $500,000 authorized, $135,000 are owned by the Atchison, Topeka & Santa Fe Rail- issue: way Company, and $224,000 are outstanding as above. Security: The above bonds are secured by a first mortgage on 26.4 miles of line, extending from Prescott & Eastern Junction to Meyer, Ariz.; also on lands, buildings, franchises, incomes, etc. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Santa Fe, Prescott & Phoenix Railroad Company under the terms of the lease. Equity: These bonds are prior in lien to the Atchison, Topeka & Santa Fe Railway-California- Arizona Lines First & Refunding 4i^s of 1962, a sufficient number of which have been reserved to refund this issue. Trustee: Central Trust Company of New York. The Prescott & Eastern Railroad Company was chartered under the laws of Arizona, September 14, 1897, for 50 years. Its road was opened for traffic June 15, 1899. Its property was leased to the Santa Fe, Prescott & Phoenix Railway Company for 99 years from June 80, 1898, but in December, 1911, it was merged into the California, Arizona & Santa Fe Railway Company, the latter forming an integral part of the Atchison System. 1 30 ATCHISON, TOPEKA & SANTA FE RAILWAY California-Arizona Lines First and Refunding Mortgage 41 ^s Dated March 1, 1912 Maturing March 1, 1962 Interest payable March 1 and September 1 at New York and London. Coupon bonds of $100, $500 and $1,000. Registered bonds of $1,000 and $10,000. Coupon and registered bonds interchangeable. Sterling bonds of £20, £100 and £200. Franc bonds of 2,500 and 5,000 francs. All registerable as to principal. Authorized $50,000,000 Outstanding $9,394,000 £1,830,000 Per mile . . $21,916 Provisions of Of the $50,000,000 authorized, $31,700,000 have been reserved for extensions, construction issue: of terminals, bridges, etc., acquisition of stocks and bonds, etc., under restrictions, and to re- fund underlying bonds. $9,394,000 and £1,830,000 are outstanding as above Security : The above bonds are a direct obligation of the Atchison, Topeka & Santa Fe Railway Company, and are secured by a direct mortgage, or collateral trust lien, on 834.66 miles of road. They are secured by a first mortgage on 296.87 miles, including the line from Cadiz, Cal., to A and C Junction, Ariz., 190 miles; and, in effect, by a first mortgage on 73.85 miles of road through de])osit with the trustee of underlying securities on the same. They are further secured by a second mortgage on 463.94 miles, covered by the first liens of the Southern Pacific First Consolidated 5s of 1937, the Santa Fe, Prescott & Phoenix First 5s of 1942, the Prescott & Eastern First 5s of 1928 and the California Eastern Railway First 5s of 1921. Redemption: These bonds are redeemable as a whole but not in part at 110 and interest, on any interest date, upon 90 days' notice, at the option of the California, Arizona & Santa Fe Railway Com[)any, a joint executor of the mortgage with the Atchison, Topeka & Santa Fe Railway Company. Trustee : Guaranty Trust Company, New York. The California, Arizona & Santa Fe Railway Company wa.s organized in December, 1911, in the interests of the Atchison, Topeka & Santa Fe Railway Company, wliich owns all its capital stock ($50,000,000) except directors' shares. These bonds were quoted in July, 1912, on a 4.50% basis. I 31 BALTIMORE & OHIO RAILROAD COMPANY BALTIMORE & OHIO RAILROAD COMPANY HISTORY The Baltimore & Oliio Railroiul is one of the oldest in Anieriea; in fact it is the oldest of the larger railroads in continnous existence. Its report for 1912 was its eighty-sixth annnal statement to its stockholders. The road was chartered in Maryland on February 28, 1827, and in Virginia on March 8, 1827. The construction of the road was begun on July 4, 1828, and the main line was opened throughout on January 1, 1853. Its construction was directly instigated by the completion of the Erie Canal, and was assisted by loans from the City of Baltimore. The road consisted of iron-])lated wooden rails along which tram-cars ran " at the marvellous speed of nine miles an hour." The first steam-drawn train travellefl at the rate of ten miles an hour, and it was predicted that " before long this unprecedented rate of speed will be raised to eighteen, and even twenty miles an hour, and the journey to the Ohio will some day be performed within twenty-four hours." Time has proved that this was a most conser- vative statement. The modern Baltimore & Ohio Railroad was largely the creation of John W. Garrett, who was its president from 1858 until his death in 1884. He was succeeded by his son, Robert Garrett, who was killed soon after. In 1887 dividends on the common stock were passed, and from that time initil the actual faihu-e of the road in 1896, it was forced into destructive rate wars which swept it into bankruptcy. It was in February, 1896, that the company became insolvent. Being unable to meet the interest on several important issues of its bonds, receivers were appointed on March 1. At that time the company owned in fee simple 513 miles of main line and branches and, in addition, about 1,750 miles of leased and proprietary roads, the results from whose operation were included in its income account. Besides this the company operated, as agent for their owners, three small railroads in Virginia., and controlled the oi)eration of, but did not directly operate, the Baltimore & Ohio South- western Railway, the Cleveland Terminal & Valley Railroad, the Monongahela River Railroad, the Pittsburgh & Western Railway, the Sharpsville Railroad, the Staten Island Railwa,^^ the Staten Island Rapid Transit Railway and the West Virginia & Pittsburgh Railroad. The receivershij) covered all the lines operated directly by the Baltimore & Ohio Railroad Company, Jmt not those operated by their own organizations. Separate receivers were appointed afterward for these. The Baltimore & Ohio receivers were in possession for more than three years and practically renewed the road and its equipment, at the same time carrying through the plan of reorganization without foreclosure. The property was restored to the company on July 1, 1899. In the reorganization the proprietary and leased lines were practically absorbed, all their securi- ties and del)ts being acquired by the new company and deposited imder mortgages. The Central Ohio S\'stem of railroads, including the Central Ohio Railroad, the Columbus & Cincinnati Mid- land Railroad, the Newark, Somerset & Straitsville Railroad and the Sandusky, Mansfield & Newark Railroad, was acquired by the reorganized company. Also, the securities of the Baltimore & Ohio Southwestern Railroad Company, a reorganization of the Baltimore & Ohio Southwestern Railway Company, were taken over and deposited under its Southwestern Di\'ision mortgage. The opera- tion of the Baltimore & Ohio Southwestern Railroad was not assumed until July 1, 1900. Besides this, the reorganized company purchased the capital stocks of the Monongahela River Railroad and the West Virginia & Pittsburgh Railroad Companies, assuming their direct operation [ 35 ] April 1, 1900, and September 1, 1899, respectively. Sold under foreclosure of its second mortgage on October 9, 1901, the Pittsburgh & Western Railroad was purchased by the Baltimore & Ohio Railroad Company, and reorganized as the Pittsburgh & Western Railway. The control of this road carried with it the ownership of several important branches and the control of the Pittsburgh, Cleveland & Toledo Railroad and the Pittsburgh, Painesville & Fairport Railroad. During the year 1901 the Baltimore & Ohio Railroad Company acquired the control of the Cleveland, Lorain & Wheeling Railroad, the Ohio River Railroad, the Ohio and Little Kanawha Railroad and the West Virginia Short Line Railroad Companies. By January 1, 1902, they had been taken over for operation, and on February 1, 1902, operation was assumed of the Cleveland Terminal & Valley Railroad and the Pittsburgh Junction Railroad. On June 30, 1912, the Baltimore & Ohio Railroad Company owned one-sLxth of the capital stock of the Richmond-Washington Company, which controls the "Union Line " between Washington, D. C, and Riclnnond, Virginia. It also owned 121,300 of the 560,000 shares of first preferred, 285,300 of the 840,000 shares of second preferred, and 200,050 of the 1,400,000 shares of common stock of the Reading Company. The latter controls the Philadelphia & Reading Railway and the Central Railroad of New Jersey, and both form an essential part of the Baltimore & Ohio's through line to New York. One other acquisition will eventually prove of importance to the Baltimore & Ohio Railroad Company, namely, the agreement made July 1, 1909, whereby the above company has the option to 1916 to acquire the controlling stock of the Cincinnati, Hamilton & Dayton Railway Company. This railroad was formed in 1895 as the consolidation of the old Cincinnati, Hamilton & Dayton, Cincinnati, Dayton & Ironton, and the Cincinnati, Dayton & Chicago Railroads. It controlled the Pere Marquette System by lease from 1903 to 1906, and was itself controlled by Erie interests from 1904 to 1906. It held a majority of the common stock of the Pere Marquette until 1910, when it passed into the control of J. P. Morgan & Company. The Cincinnati, Hamilton & Dayton Railway still has a joint interest with the Cleveland, Cincinnati, Chicago & St. Louis in the Dayton & Union Railway. It owns, jointly with the Southern Railway and the Alabama, New Orleans, Texas & Pacific Junction Railways, Ltd., a majority of the stock of the Southwestern Construction Com- pany, which, in turn, controls the Cincinnati, New Orleans & Texas Pacific Railway. Under the terms of the above-mentioned agreement, the Baltimore & Ohio Railroad effected a plan for the adjustment of future interest charges, and the payment or adjustment of the floating debt of the Cincinnati, Hamilton & Dayton Railway. It also agreed at that time to provide ap- proximately $7,000,000 for improvements and working capital, and to guarantee the latter's first and refunding mortgage 4s dated July 1, 1909, and $11,557,000 4 per cent notes maturing Julj^ 1, 1913. Also, when under the agreement the acquisition of the latter's stock is made by the Baltimore & Ohio Railroad, it is obliged to purchase at 85, or guarantee, $20,000,000 of the Cincinnati, Ham- ilton & Dayton Railway's General Mortgage bonds due July 1, 1939. A word might be said about the dominant influences in the Baltimore & Ohio Railroad itself. On January 1, 1912, the Pennsylvania Railroad and subsidiary lines owned $21,273,000 preferred and $21,273,000 common stock of the Baltimore & Ohio Railroad. On June 30, 1912, the Union Pacific Railroad Company owned $7,206,000 preferred and $32,334,000 cominon stock of the com- pany. Representatives of both the Pennsylvania and the Union Pacific Railroads are to be found among the dozen directors who manage the destinies of the Baltimore & Ohio. PROPERTY At tlie close of the company's fiscal year, June 30, 1912, the Baltimore & Ohio Railroad operated 4,455.06 miles of main track. Of this amount 73.76 miles were operated under trackage rights. The total extra main track of the system included 1,242.40 miles of second main track, 167.36 miles of third main track, and 39.24 miles of fourth main track, totaling 1,449 miles. 'J'lie principal line of the Baltimore & Ohio Railroad extends from Philadelphia, through Bal- [36] timore, westward through Maryland, forking at Cumberhmd into two main branches; one extending to Pittsburgh, Lake Erie, and Chicago, the other througli Cincinnati to Louisville and St. Louis. Entrance to New York City is made over the Philadelphia & Reading lines. The Baltimore & Ohio does interstate business in the States of Pennsylvania, Maryland, Virginia, West Virginia, Ohio, Indiana and Illinois. The population of these states in 1890 was 18,412,159; in 1900, 21,798,700; and in 1910, 25,349,776. CAPITALIZATION Based on the annual report of the Baltimore & Ohio Railroad Company for the fiscal year end- ing June 30, 1912, the following capitalization figures of the system appear: Common stock $152,246,988 Preferred stock 59,989,247 Total capital stock $212,236,235 Funded debt 343,882,779 Gross capitalization $556,119,114 Securities owned 60,304,809 Net capitalization $495,814,205 Net capital per mile operated $111,293 Average miles operated 4,455.06 Net income to net capital ^-5% Fixed charges to net income 56.9% Margin of safety 43.1% The actual net capital per mile of road operated, $111,293, as above, is not a large figure as compared with other roads similarly situated and meeting the same transportation }iroblems. Below is the average net capitalization and the average net income to net capital for the decade ending June 30, 1912, of the Baltimore & Ohio Railroad, and the decade ending December 31, 1911, of the New York Central and the Pennsylvania Railroad Companies. Baltimore & Ohio $102,550 6.7% New York Central 125,652 7.6 Pennsylvania 125,063 11.5 As will be seen by the foregoing, the New York Central, with an average net capitalization of $125,600 per mile, is able to show a net income of 7.6% on it for the decade. This is obviously a better showing than that of the Baltimore & Ohio, which earned net on its average net capital only 6.7%; but it should be said of the New York Central that its showing is bettered to no small degree by its rich subsidiaries which can be depended upon at any time to help materially in meeting its dividend payments, thereby swelling the total net income available for capital requirements. As will be seen above, the fixed charges of the road consume 56.9% of the total net income, leav- ing a margin of safety for the interest on its bond issues of 43.1%. The average margin of safety for ten years past is relatively better, being 51%, as compared with the average margin of safety for the same period of 32% for New York Central bond issues, and 55% for Pennsylvania securities. [ 37 ] CHARACTER OF TRAFFIC To a greater extent than most of the large Eastern roads, the Baltimore & Ohio Railroad is primarily a freight road, and like most large Eastern lines, except possibly the New York Central, the larger part of its freight earnings are from coal traffic. To show the exact proportion of coal traffic to total freight traffic and of freight to the entire traffic of the road, the following table is ap- pended for the years ending June 30, 1907 to 1912 inclusive: Ratio of all Traffic Coal (soft) Other commodities 1912 1911 1910 1909 1908 1907 46% 44% 42% 43% 44% 39%o 54 56 58 57 56 61 100% 100% 100% 78% 100% 76% 100% 76% 100%o 78% 77% 79% 16 17 16 18 18 17 6 6 6 6 6 4 Total freight Passenger Other Total traffic 100%o 100% 100% 100% 100%, 100% As will be seen by the above, over 75% of the traffic of the railroad is freight, and of this freight, over 43%, on an average, is represented by bituminous coal traffic. In point of fact, fully two thirds of the entire freight carried consists of mine products, largely coal and coke. The fol- lowing table is given showing the number of tons of commodities carried during the fiscal years 1907 to 1911 inclusive: Commodity Statistics 1912 Products of Tons Agriculture 3,203=' Animals 935 Mines 43,115 Forests 2,627 Manufactures .... 10,165 Miscellaneous .... 4,659 Total 64,704 60,547 62,797 48,223 49,487 58,449 The above figures show that, of the total freight tonnage for the period in question, only about 5%, on an average, represents products of agriculture, 5% products of forests, 16% products of manufactures, and 8% miscellaneous commodities. This leaves approximately 66%, which is ac- counted for by the products of mines, a fact which proves in itself the dependence of the railroad upon its coal traffic. Therefore, with such a preponderance of low-grade freight, the earning capacity of the road is dependent largely upon the maintenance of its coal and commodity freight rates. Compiled from the official reports of the railroad for the years 1907 to 1912 inclusive, the follow- ing earnings statistics are submitted: 1911 Tons 1910 Tons 1909 Tons 1908 Tons 1907 Tons 3,299* 3,243* 2,796* 3,029* 3,095^ 966 875 842 847 824 39,536 40,806 31,297 32,115 37,403 2,765 3,092 2,487 2,599 3,088 9,651 10,626 7,397 7,301 9,927 4,330 4,157 3,404 3,596 4,112 1 38 ] fight Earnings 1911 1910 1909 1908 1907 $.8^298 $.8215 $.7977 $.8053 $.7869 .0041 .0041 .0041 .0041 .0040 1.117 1.1053 1.1171 1.1252 1.1057 .0057 .0057 .0058 .0057 .0057 15,253 15,652 13,456 13,946 16,131 191« Average coal earnings per ton $.8377 Average coal earnings per ton per mile .0041 Average freight earnings per ton 1.120 Average freight earnings per ton per mile . . . .0058 Freight earnings per mile of road 16,266 As will be seen by the foregoing, coal and freight earnings per ton have been steady, and have tended generally to increase. The average coal earnings per ton increased from $.7869 in 1907 to $.8377 during the fiscal year ending June 30, 1912, while the average coal earnings per ton per mile remained practically stationary. The freight rate per ton per mile averaged $.0058 for the period, and this compares very favorably with the corresjjonding figures of the Pennsylvania Railroad, the Chesapeake & Ohio Railwaj', and the Norfolk & Western Railway — roads similarly situated and de- pending upon the same sort of traffic as the Baltimore & Ohio. The above-mentioned roads report a freight rate per ton per mile of $.0059, $.0043, and $.0047 respectively. The passenger business of the Baltimore & Ohio Railroad represents about 17% of the total traffic, as is shown in a table above. While the actual number of passengers carried during the years 1907 to 1912 inclusive increased steadily, passenger density tended to decline and the average earn- ings per passenger per mile remained practically stationary. In the case of the latter, the 1912 figures show a slight improvement over those of 1908, 1909, 1910 and 1911, but nowhere near equal the average earnings per passenger per mile for the decade prior to 1907. Following are some of the more salient passenger statistics of the Baltimore & Ohio for the fiscal years ending June 30, 1907 to 1912 inclusive: Passenger Statistics 1912 1911 1910 1909 1908 1907 Number of pass- engers carried . 22,178* 21,969* 21,107* 18,614* 18,775* 17,468' Passenger den- sity 171,977 179,506 172,165 172,286 182,005 180,574 Average earnings per passenger . $.6653 $.6923 $.6863 $.6968 $.7316 $.8099 Average earnings per passenger per mile . . . .0193 .0191 .0189 .0188 .0189 .0195 Passenger earn- ings per mile . 3,312 3,430 3,266 EARNINGS 3,239 3,440 3,531 Based on the annual reports of the company, the following table is presented showing the actual gross and net earnings, also earnings figured on the basis of miles operated, for the years 1907 to 1912 inclusive : * 000 omitted. [ 39 ] operated earnings 1907 . . 4006 $82,243,921 1908 . . 3992 73,608,781 1909 . . 4004 71,043,519 1910 . . 4434 88,901,252 1911 . . 4434 88,145,003 1912 . . 4455 92,594,323 Per mile Net earnings ^20,530 $27,363,830 18,439 19,457,901 17,743 23,491,542 20,049 27,567,451 19,879 25,378,936 20,784 27,884,785 Per mile $6,830 4,875 5,867 6,217 5,724 6,259 In the above table the 1907, 1908 and 1909 figures do not inchide the earnings of controlled and affiliated lines. In 1910 these lines, which had been independently operated, were merged directly into the Baltimore & Ohio System, and their operations were included in the reports of the company. This accounts for the increase in miles operated and the marked advance in earnings during that year. Because of this merger, the 1910, 1911 and 1912 figures represent the earnings of the entire system except those of the Staten Island Railway, the Staten Island Rapid Transit Railway, and the Balti- more & Ohio Chicago Terminal Railroad Companies. As will be seen by the above comparative figures, in the year 1911 the gross earnings per mile decreased somewhat as compared with 1910, recovering sharply, however, in 1912. While tlie road was able to report substantial gross earnings in 1911, its operating costs tended to advance, resulting in net earnings per mile lower than any reported since 1908. The splendid gain in gross in 1912 was saved to a large degree for net, which in actual dollars were the largest ever reported. EXPENSES To get a clear idea of the company's operating expenses, both for maintenance and conducting transportation, the following table has been compiled from the annual reports of the Baltimore & Ohio Railroad Company for the fiscal years ending June 30, 1907 to 1912 inclusive, showing the actual anaounts spent, also the amounts based on the average miles operated, and the ratios of each to total expenses and to gross earnings: Operating Expenses 1912 1911 1910 1909 1908 1907 Maintenance of way . $11,365,454 $10,279,615 $11,661,409 $9,017,396 $10,892,061 $10,944,597 Per mile 2,551 2,318 2,630 2,252 2,728 2,632 Maintenance of equip. 16,651,534 15,881,620 16,373,775 10,985,730 12,584,072 12,993,722 Per mile 3,738 3,582 3,693 2,744 3,152 3,357 Conducting transp., etc. 36,692,549 36,604,831 33,298,614 27,548,850 30,674,746 30,941,770 Per mile 8,236 8,255 7,509 6,880 7,684 7,711 Total expense .... 64,709,537 62,766,067 61,333.800 47,551,976 54,150,879 54,880,090 Per mile 14,525 14,155 13,832 11,876 13,564 13,700 % maintenance way to expense ...... 17.5% 16.4% 10.0% 19.0% 20.1% 19.2% % maintenance equi]). to expense 25.7 25.3 26.7 23.1 23.2 24.5 % conducting transp. to expense 57.8 58.3 54.3 57.9 56.7 56.2 % expense to gross earn- ings 69.8 71.2 69.0 66.9 73.5 66.7 % conducting tran.sp. to gross earnings . . . 39.6 41.5 37.4 38.7 41.7 37.5 The first things to consider in the foregoing figures are the charges to maintenance for the period in ([uestion. In 1907, the largest year in the company's history up to that time, maintenance charges [40] were extremely high, Iieing far above tliose of 1906, which were at that time greater than they had ever been before. The business depression which followed the panic of 1907 had its natural effect upon the earnings of the company, causing a marked decrease. The Compauj', however, did not scale down mamtenance and operating costs in proportion to the reduction in gross income, and we find maintenance charges for that year very nearly equivalent to those of the high figures of 1907. In 1909 drastic cuts appear in the maintenance charges. This fact has been explained as due to the desire of the road's managers to make a reasonable dividend showing. The effect of that year's under-maintenance was more than offset by the generous charges to upkeep which were recorded in 1910. During the fiscal year of 1911 a slight reduction was made necessary by the falling off in gross earnings due to the generally unsettled business conditions which so affected roads of this class. In 1912, maintenance charges equalled those of 1910. Turning from maintenance to charges for conducting transportation, the tendency for this item to increase during the six years in question is very noticeable. In fact, operating costs have in- creased steadily since 1902. Important factors contributing to this increase in operating expenses are found in those items of expense directly connected with the maintenance and operation of locomotives. Including locomotive maintenance, wages of enginemen, engine house expenses, as well as fuel, water and other supplies for locomotives, it cost $11,816,860 to run the company's locomotives 57,208,959 miles in 1902; while during the fiscal year of 1912 locomotives ran 61,119,637 miles at the cost of $20,292,169, or $.332 per mile compared with $.207 per mile in 1902. The increasmg cost of conducting transportation is still more strongly shown in the ratios presented above. While the ratio of maintenance of way and of equipment to total expense re- mains practically stationary, the ratio of the cost of actual operation to the total amount spent has generally increased. The ratio of exi)ense to gross earnings, which increased from 66.7% for the year 1907 to 69.88% in 1912 can be almost entirely explained by this item. But a still more significant figure is that of the actual ratio between the cost of conducting transportation and gross earnings. As will be seen by the above figures, the ratio of 37.5% in 1907 increased to 39.6% in 1912; that is, for every hundred dollars earned it cost $37.50 m 1907 merely to operate, and $39.60 in 1912. That this has been a disturbing feature in the income account of the company has been evident for a long time, and it is significant to note the efforts on the part of the management during the year 1912 so to increase the operating efficiency of the road as to decrease the costs of conducting transportation. The average train load for the year 1911 was 441 tons. This was increased during the year ending June 30, 1912, to 554 tons, an increase of 113 tons or 26%, a truly remarkable gain in operating efficiency. Correspondingly, revenue per train mile increased from $2.05 in 1911 to $2.39 in 1912. Net profits per train mile increased from $.591 to $.719. IMPROVEMENTS Since its reorganization in 1899 the Baltimore & Ohio Railroad Company has systematically set aside from its surplus earnings very large sums for improvements. $26,901,238 has been ex- pended in this way. This amount is insignificant, of course, in comparison with amounts spent by the Pennsylvania kailroad, the New York Central, or even the Delaware, Lackawanna & Western, but it must be remembered that the above companies' earnings are proportionately greater. In addition to the above amount spent from income, the Baltimore & Ohio has expended enor- mous amounts upon improvements and chiirged them to capital. Additions and betterments to road and equipment since June 30, 1907, which have been charged to capital, amounted to $71,882,189, as per balance sheet of June 30, 1912. Year Road Equipment General Total 1910 $11,033,358 $10,004,408 $29,747 $21,067,513 1911 18,771,942 14,568,327 1,658 33,341,927 1912 11,969,912 5,502,837 17,472 ,749 $71,882,189 [41 ] Within the past few years the road has been practically made over. New bnllasting, double tracking, the installation of automatic block signals, the purchase of new equipment — both loco- motives witli heavier tractive power and steel cars with greater carrying capacity — and the build- ing of bridges to care for the increasingly heavy traflSc of the road have meant the expenditure of many millions of dollars. The road has deliberately burdened itself with charges upon this outlay in order to prepare itself to meet more efficiently the requirements of the future. In 1910 the company issued $50,000,000 three-year gold secured notes, $10,000,000 of which were to refund maturing notes, and the balance to be spent in additions and betterments of the sort mentioned above. Already a large portion of this amount has been expended. During the fiscal year of 1911 $28,600,000 was used in this way, $14,000,000 in additions to property and $14,600,000 for equipment. In February, 1912, the company issued $10,000,000 more notes in the form of equip- ment trust certificates. The proceeds were to reimburse the company's treasury, in part, for money expended from earnings on equipment and improvements during the two preceding years. In short, the company is endeavoring in every way to provide necessary facilities to meet the demands of general business and particularly of the increasing industrial developments along its lines. These outlays of capital prove conclusively the belief of the road's managers in the possibility of in- creasing its earning power. DIVIDENDS The Baltimore & Ohio Railroad Company has paid the following dividends since its reorgani- zation in 1899: Year Rate Preferred Common 1900 4% 2% 1901-4 4 4 1905 4 41/^ 1906 4 5H 1907-12 4 6 Any fear as to the ability of the company to maintain the present dividend rate was dispelled by the report of its earnings for the fiscal year of 1912. Gross earnings were well over $92,000,000, — a new high record. Approximately, the surplus available for dividends on the $252,246,988 com- mon stock outstanding was equal to 7.5%. This compares with 6.8% earned in 1911 and 9.1% m 1910. STATISTICS On the following page are given capitalization, earnings and traffic statistics of the Baltimore & Ohio Railroad, based on the average miles operated, for the year 1900 and for the years 1905 to 1912 inclusive: [ 42 J BALTIMORE & OHIO RAILROAD Fiscal Preferred Common Funded Rentals Gross Owned by Net Average Extra year stock stock debt @5% capital company capital miles operatec main track 1900 $18,555 $14,067 $62,030 Norn. $94,562 $4,790 $89,887 3,199 698 1905 14,900 30,867 61,005 106,772 10,817 95,995 4,026 1,138 1906 lt,889 33,444 64,026 112,359 12,048 99,711 4,030 1,182 1907 14,977 37,987 64,999 117,963 14,002 103,961 4,006 1,231 1908 15,030 38,120 66,794 119,944 14,130 105,814 3,992 1,266 1909 14,985 38,006 67,000 119,991 10,581 109,410 4,004 1,303 1910 13,528 34,314 72,464 120,306 13,411 105.430 4,434 1,318 1911 13,529 34,336 74,900 122,769 13,462 107,737 4,434 1,392 1912 12,465 34,174 77,190 124,829 13,536 111,293 4,455 1,449 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus year operating and general operating income net charges ivailable revenue Way $1,492 Equipment $1,598 expense - revenue $313 $4,862 $2,686 for dividends 1900 $13,236 $5,597 $4,549 $2,176 1905 16,813 1,950 2,717 6,438 5,707 740 6,447 2,930 3,517 1906 19,204 2,315 3,105 6,866 6,917 860 7,777 3,027 4,750 1907 20,530 2,632 3,357 7,711 6,830 1,007 7,837 3,202 4,635 1908 18,439 2,728 3,152 7,684 4,875 1,090 5,965 3,354 2,611 1909 17,733 2,252 2,744 6,880 5,867 1,035 6,902 3,650 3,252 1910 20,049 2,630 3,693 7,509 6,217 951 7,168 3,505 3,664 1911 19,879 2,318 3,582 8,255 5,724 1,104 6,828 3,936 2,892 1912 20,784 2,551 3,738 8,236 6,259 986 7,245 4,125 3,120 Fiscal Divi- Other Surph s Operating Total Conducting Fixed Gross Net Perci nt earned year dends c harges expenses mainten- transportation charges earnings income to income to gross ance to gross to gross to gross to gross to net earnings earnings earnings earnings capital capital Preferred Common 1900 $1,274 $802 $94 65.07% 23.2% 41.9%, 20.2% 14.0% 5.4% 10.8%, 9.1% 1905 1,985 740 792 66.05 27.8 38.3 17.4 15.8 6.6 23.6 7.5 1906 2,295 1,012 1,178 63.98 28.0 36.0 17.4 17.0 7.7 31.9 12.4 1907 2,878 1,027 736 66.73 29.2 37.5 15.6 16.7 7.5 29.1 9.9 1908 2,888 69 343 73.57 31.9 41.7 18.2 15.4 5.6 16.8 5.1 1909 2,880 136 236 66.93 28.2 38.7 21.3 14.8 6.4 21.7 6.9 1910 2,587 94 983 69.00 31.6 37.4 17.4 16.6 6.7 20.4 9.1 1911 2,588 304 71.21 29.7 41.5 19.7 16.2 6.3 21.3 6.8 1912 2,576 544 09.88 30.3 39.6 19.8 16.6 6.5 25.0 7.5 Fiscal Train Maintena nee Conducting Train Rate i)er mile Freight Train Freight P.issenger. year mile per revenue transportation mile density load to all freight earnings train mile per revenue earnings Per Per revenue raffic and (gross) train mile (net) passenger ton tons company Way Equipment cars 1900 $1.42 $.155 $.210 $.730 $.319 $.0184 $.0046 2,124,274 365 75% 65,026 1905 1.89 216 300 .713 631 .0190 .0056 2,218,960 399 75 75,782 1906 1.98 238 319 .706 707 .0201 .0056 2,659,949 420 78 90,354 1907 2.05 263 335 .771 683 .0195 .0057 2,828,065 433 79 84,676 1908 1.92 284 328 .801 508 .0189 .0056 2,451,747 408 76 87,935 1909 1.95 250 304 .762 634 .0189 .0058 2,315,649 425 76 85,964 1910 2.05 269 377 .768 636 .0190 .0057 2,711,666 442 78 85,953 1911 2.05 239 369 .852 591 .0191 .0057 2,639,654 441 77 90,703 1912 2.39 293 430 .948 719 .0192 .0058 2,803,648 554 78 89,379 ♦ Deficit. [43 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Baltimore & Ohio Railroad System, together with the bases upon which they have sold during the decade ending December .'51, 191'2: BALTIMORE & OHIO RAILROAD Prior Lien Gold 3Vjs Dated July 1, 1898 Maturing July 1, 1925 Interest payable on coupon bonds January 1 and July 1. Registered bonds January 1, April 1, July 1 and October 1, at the company's office, New York. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and multiples thereof. Authorized $75,000,000 Outstanding $74,852,150 Per mile . . 72,780 Provisions of issue : Security : Equity: On June 30, 1912, $74,852,150 of the $75,000,000 authorized were outstanding in the hands of the public, as above, and $147,850 were held in the treasury. The above bonds are secured by (1) a direct first mortgage on 91.84 miles of road; (2) a direct second mortgage on 376.31 miles of road; (3) a first collateral trust mortgage on 560.31 miles of road through deposit of $24,791,000 and £1,352,000 bonds and $17,827,797 stocks; (4) the right, title and interest of the company in certain claims against the Washington County Railroad, Berkley Springs & Potomac Railroad, and Pittsburgh & Connellsville Railroad; (5) a first lien on equipment valued on June 30, 1907, at about $48,000,000. The above bonds are prior in lien to the $165,000,000 Baltimore & Ohio First Mortgage 4% bonds due July 1, 1948, a sufficient number of which have been reserved to retire this issue at maturity. Trustee: Bankers Trust Company, New York. The.se bonds sold in 1902 on a 3.65 to 4.00 basis 1903 3.70 4.10 1904 3.72 4.00 1905 3.65 3.90 1906 3.67 4.10 1907 4.00 4.70 1908 3.85 4.35 1909 3.90 4.25 1910 4.125 4.50 1911 4.15 4.35 1912 4.125 4.50 These bonds are considered a legal investment for savings banks in New Hampshire, Vermont, Massa- chusetts and Rhode Island. [ 4G BALTIMORE & OHIO RAILROAD First Mortgage Gold 4s Dated July 1, 1898 Maturing July 1, 1948 Interest payable on coupon bonds April 1 and October I at the company's office. New York. Registered bonds January 1, April 1, July 1 and October 1, by check. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and multiples thereof. Authorized $165,000,000 Outstanding $74,978,750 Per mile . . 46,810 Provisions of issue: Security : Redemption : Of the $165,000,000 authorized, $78,000,000 have been issued, of which $3,021,250 are held in the treasury and $74,978,750 are outstanding as above. The $88,000,000 unissued bonds are held to retire $75,000,000 Prior Lien 3j^s of 1925 and for betterments and extensions at not exceeding $1,000,000 a year. The above bonds are secured by (1) a direct first mortgage on 56.26 miles of road; (2) a first collateral trust mortgage on 517.03 miles of road through deposit of $12,000,000 and £2,600,000 bonds and $19,579,000 stocks; (3) a first collateral trust mortgage on valuable terminal prop- erty, being secured by pledge of the entire $8,487,200 Baltimore & Ohio Railroad Terminal 4i^s of 1934; (4) a direct second mortgage on 91.84 miles; (5) a direct third mortgage on 376.31 miles of road, and (6) a second collateral trust mortgage on 560.31 miles. These bonds are redeemable at 105 and interest on any interest date after July 1, 1923, on three months' notice. Trustees : United States Trust Company and John A. Stewart, New York. These bonds sold in 1902 on a 3.77 to 4.02 basis 1903 3.77 4.03 1904 3.80 3.99 1905 3.68 3.90 1906 3.75 3.99 1907 3.875 4.62 1908 3.90 4.15 1909 3.90 4.125 1910 3.99 4.125 1911 4.02 4.17 1912 4.05 4.25 These bonds are considered a legal investment for savings banks in New England except Connecticut. [ 47 BALTIMORE & OHIO RAILROAD Pittsburgh Junction & Middle Division First Mortgage Gold 3V2S Dated November 1, 1898 Maturing November 1, 192.5 Interest payable on coupon bonds May 1 and November 1 at the company's ofBce, New York. Registered bonds February 1, May 1, August 1 and November 1, by check. Coupon bonds of $500 and $1000, registerable as to principal or fully registerable. Registered bonds of $1,000 and nuiltiples thereof. Authorized $20,000,000 Outstanding $0,170,230 Per mile . . 16,150 Trovisioiis of Of the $20,000,000 bonds authorized, $14,8,'5G,8.'?0 have been issued, as follows: $50 are held issue: in the treasury, $8,060,550 are pledged as part collateral for the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia Refunding 4s of 1941, and $6,176,230 are outstanding, as above. No more of these bonds are to be issued unless they are pledged under the Pittsburgh, Lake Erie & West Virginia Refunding Mortgage. Security: The above bonds are secured by a collateral trust mortgage on 382.34 miles of road, terminal property, etc., through deposit of securities of subsidiary companies, totalling $6,244,000 bonds and $12,357,959 stocks. Equity: Provision is made in the mortgage securing the Baltimore & Ohio-Pittsburgh, Lake Erie & W'est Virginia System Refunding Mortgage 4s due November 1, 1941, for the retirement of these bonds and for the inclusion of the proi)erties and securities covered by these bonds in the security of the refunding mortgage. The.se bonds sold in 1902 on a 3.90 to 4.25 basis 1903 4.125 4.40 1904 4.00 4.40 1905 4.00 4.20 1906 4.10 4.35 1907 4.30 5.20 1908 4.35 5.27 1909 4.40 4.55 1910 4.40 4.70 1911 4.60 4.70 1912 4..50 4.85 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [4S BALTIMORE & OHIO RAILROAD Southwestern Division First Mortgage Gold 3V2S Dated January 1, 1899 Maturing July 1, 1925 Interest payable at tlie company's office on coupon bonds January 1 and July 1. Registered bonds January 1, April 1, July 1 and October 1. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and nuiltiplcs thereof. Authorized $45,000,000 Outstanding $44,992,530 Per mile . . 48,775 Security : The above bonds are secured by a deposit with the trustee of the entire issue, $45,000,000, of the Baltimore & Ohio Southwestern Railroad First 33^s of 1925, and also the entire capital stock of that company, $4,000,000. The First 3j^s of 1925 are secured by a first mortgage on the company's entire mileage totalling 922.44 miles, thereby making the above bonds in effect a first mortgage on the Southwestern Division. Trustee: Farmers' Loan & Trust Company, New York. The Baltimore & Ohio Southwestern Raih-oad Company was organized in December, 1889, as the successor of the Cincinnati, Washington & Baltimore Railroad Company, whose property was sold under foreclosure in October, 1889. On November 1, 1893, this company- and the Oliio & Mis- sissippi Railway were consolidated into the Baltimore & Ohio Southwestern Railway Company. In 1898 the latter went into the hands of a receiver and under a plan of reorganization dated Decem- ber 15 of that year was reorganized and consolidated with the Baltimore & Ohio Railroad Company in August, 1899. Since July 1, 1900, the Baltimore & Ohio Southwestern Railroad has been operated as the Southwestern Division of the Baltimore & Ohio System. These bonds sold in 1902 on a 4.05 to 4.30 basis 1903 4.15 4.45 1904 3.92 4.45 1905 3.80 4.15 1906 3.98 4.30 1907 4.25 5.22 1908 4.05 4.90 1909 4.20 4.47 1910 4.27 4.50 1911 4.30 4.50 1912 4.37 4.70 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. [49 ] BALTIMORE & OHIO RAILROAD Pittsburgh, Lake Erie & West Virginia System Refunding Mortgage Gold 4s Dated November 1, 1901 Maturing November 1, 1941 Interest payable May 1 and November 1 at the company's office, 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $75,000,000 Outstanding $43,372,000 Per mile . . 26,235 Provisions of In addition to the $43,372,000 outstanding in the hands of the public, $31,609,600 are reserved issue: to acquire additional prior lien bonds to be deposited under the mortgage, and $18,400 are held in the treasury. Security: The above bonds are a direct obligation of the Baltimore & Ohio Railroad and are secured by first and second collateral liens on securities covering 1,653.07 miles of road and terminals, leaseholds, equipment and future acquisitions, as follows: (1) a first collateral lien on $24,772,900 of the $47,275,000 bonds, and $53,801,240 of the $54,484,345 stocks of nineteen railroads cov- ering 1,283.32 miles; (2) a deposit with the trustee of $8,660,550 of the Baltimore & Ohio- Pittsburgh Junction & Middle Division First 3j^s of 1925; (3) a second collateral lien on the securities and property covered by the first collateral lien of the Baltimore & Ohio-Pittsburgh Junction & Middle Division First 3j^s of 1925. Redemption: The above bonds are redeemable, beginning November 1, 1925, at par on any interest date on three months' notice. Trustee : Union Trust Company, New York. In 1901, for the purpose of consolidating and refunding the bonded indebtedness of the roads acquired in that year, namely, the Cleveland, Lorain & Wheeling Railroad, the Ohio River Roads, the Ohio & Little Kanawha Railroad, the West Virginia Short Line Railroad, the Pittsburgh & Western System, the Cleveland Terminal & Valley Railroad, the Monongahela River Railroad, the W^est Virginia & Pittsburgh Railroad, as well as to retire the Pittsburgh Junction & INIiddle Division bonds, and to provide for improvements, equipment, etc., there was authorized by a resolution adopted November 14 of that year, the above issue, to be known as the Pittsburgh, Lake Erie & West Virginia System Refunding Mortgage bonds. These bonds sold in 1902 on a 3.95 to 4.32 basis 1903 4.125 4.35 1904 3.97 4.40 1905 4.00 4.10 1906 4.02 4.35 1907 4.22 5.05 1908 4.17 4.80 1909 4.22 4.45 1910 4.40 4.70 1911 4.45 4.65 1912 4.50 4.75 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode I.sland. [50] BALTIMORE & OHIO RAILROAD 3-Year 4^^2% Secured Gold Notes Dated June 1, 1910 Maturing June 1, 1913 Interest payable June 1 and December 1 at the company's office, 2 Wall Street, New York, or at London, Berlin, Frankfort-on-the-Main or Hamburg. Coupon notes of $1,000, $.5,000 and $10,000. Authorized $50,000,000 Outstanding $50,000,000 Security: The above notes are a direct obligation of the Baltimore & Ohio Railroad Company. They are secured by a deposit with the trustee of (1) $6,000,000 of the $28,000,000 Reading Com- pany First Preferred stocks; (2) $14,000,000 of the $42,000,000 Reading Second Preferred stocks; (3) $10,000,000 of the $70,000,000 Reading Company common stocks; (4) $28,000,000 (total amount issued of the $50,000,000 authorized) Baltimore & Ohio Chicago Terminal First 4% bends which cover the freight and passenger terminals of the company in Chicago and approximately 101 miles of railroad lines, 84 miles being owned in fee and the remainder held under permanent lease. It is provided by the indenture that the railroad company " shall have the right at any time, by payment to the trustee of a specified amount of the notes, to receive from the trustee such proportionate amount of each class of the securities hereunder, as the face amoimt of the notes so paid and cancelled bears to the total issue, $50,000,000. The railroad company shall also have the right to withdraw all or any portion of the securities deposited hereunder, upon sub- stitution therefor of other securities approved by the trustees as equal in value to the secu- rities to be withdrawn." Redemption: The above notes are redeemable, upon sixty days' notice, on any interest date at par. Trustee: United States Mortgage & Trust Company, New York. The proceeds of $40,000,000 of these notes were used for improvements and betterments and for the purchase of a large amount of equipment. $10,000,000 were issued to retire a like amount of notes which matured March 10, 1911. These notes were quoted in 1910 on a 4.72 basis (bid) 1911 4.50 July, 1912 4.15 PITTSBURGH & CONNELLSVILLE RAILROAD First Mortgage Currency 4s Dated May 25, 1868 Maturing July 1, 1946 Interest payable January 1 and July 1 at the office of the Baltimore & Ohio Railroad Company, 2 Wall Street, New York. Coupon bonds of $1,000. Authorized $4,000,000 Outstanding $4,000 Per mile . . 23 The above issue was dated May 25, 1868, to run thirty years, with an interest rate of 7%, but was extended to July 1, 1946, and the interest rate reduced to 4%. [51 ] Provisions of Of the total amount authorized, $3,996,000 have been deposited under the Baltimore & Ohio issue: Prior Lien 33^s of 1925, leaving the balance, $4,000, outstanding as above. Security: The above bonds are secured by a first mortgage on 146.39 miles of road, from Mt. Savage Junction, Md., to Pittsburg, Pa., also on equipment and future acquisitions. Equity: These bonds are prior in lien to the £1,352,000 Pittsburgh & Connellsville 6s of 1926 and the $10,000,000 Second 5s of 1925. Both of these issues, as well as $3,996,000 of the First Mort- gage Currency 4s of 1946, are deposited with the trustee of the Baltimore & Ohio Prior Lien 3Hs of 1925. The Pittsburgh & Connellsville Railroad, extending from Pittsburg, to Mt. Savage Junetion, was chartered on April 2, 1837. On April 18, 1853, authority was given to extend the line to Cumber- land, INIaryland, the line being opened throughout in April, 1870. The road was leased for 50 years from January 1, 1876, (with the option of renewal) to the Baltimore & Ohio Railroad Company, which owns $1,825,114 of the total $1,944,653 capital stock and all bonds except the outstanding $56,000 of the above issue. These bonds are considered a legal investment for savings banks in Maine and New Hampshire. SCHUYLKILL RIVER EAST SIDE RAILROAD First Mortgage Gold 4s Dated December 1, 1903 Maturing June 1, 1925 Interest payable June 1 and December 1, at 518 Walnut Street, Philadelphia. Coupon bonds of $1,000, registerable as to prlncijjal or fully rcgisterable. Authorized $5,000,000 Outstanding $5,000,000 Security: The above bonds are secured by a first mortgage on about 11 miles of road in and near Phila- delphia; on about 56 miles of second, third and fourth track and sidings, together with connec- tion with the Reading Railway; on branches; on the Schuylkill Bridge; on other terminal and dock property; and on future acquisitions. They are GUARANTEED as to PRINCIPAL and INTEREST by the Baltimore & Ohio Railroad Company by endorsement. Trustee: The Pennsylvania Company for Insurances on Lives and Granting Annuities, Philadelphia. The Schuylkill River East Side Railroad was chartered July 14, 1883. On May 19, 1886, it was consolidated with the Philadelphia, Newton & Chester Railroad under the name of the former. Authority was granted by the city councils to build a line of railroad through the City of Phila- delphia, and the work was completed on December 2, 1886. Connection was made with the Phila- delphia & Reading Railroad, and the first through train to New York was run over the tracks of the Reading and Jersey Central Companies on December 15, 1886. The road was built from the sale of $4,500,000 first mortgage 5% 40-year bonds due Decendjer 1, 1925, which were guaranteed by the Baltimore & Ohio Railroad Company. On December 1, 1903, that company exercised its right to purchase these bonds, and issued instead $5,000,000 bonds maturing June 1, 1925, but bearing interest at 4%. The Schuylkill River East Side Railroad is one of the controlled roads of the Baltimore & Ohio, which owns its entire capital stock, one-half being deposited under the First Mortgage 4s of 1948 and the remainder held in the treasury. [ 52 ] These bonds sold in 1903 on a 4.00 to 4.10 basis 1904 3.65 4.01 1905 3.50 3.70 1906 3.57 3.75 1907 3.70 4.00 1908 3.92 4.02 1909 3.87 (bid) 1910 3.90 4.02 1911 4.00 (bid) Deceniljcr, 1912 4.05 (bid) These bonds arc considered a legal investment for savings banks in Maine, New Hani]jsliire and Hli aid. CENTRAL OHIO RAILROAD Consolidated First Mortgage Gold 4328 Dated .Viigust 30, 1880 Maturing September 1, 1930 Interest payable March 1 and September 1 at the company's ofhee, 2 Wall Street, New York. Coupon bonds of $1,000. Authorized $2,500,000 Outstanding $1,009,000 Per mile . . 8,340 Provisions of In addition to the $1,009,000 bonds outstanding, $1,491,000 arc deposited under the Baltimore issue: & Ohio-Pittsburgh Junction & Middle Division 3>^s of 1925. Security: The above issue is secured by a first mortgage on the company's line from Bellaire to Colum- bus, Ohio, a distance of 120.69 miles, including an undivided half interest (16.56 miles) in the 33 miles between Newark and Columbus. The other half interest is owned by the Pittsburgh, Cincinnati, Chicago & St. Louis Railway. Pittsburgh, Lake Erie & West Virginia Refunding 4s of 1941 are reserved to acquire the out- standing bonds of this issue. Trustee: Mercantile Trust & Deposit Company, Baltimore. The Central Ohio Railroad was chartered February 8, 1847, and the road was opened for business in 1854. Four years later it was placed in the hands of a receiver and on November 1, 1865, it was reorganized. In Novenil)er, 1866, an agreement was made with the Baltimore & Ohio Rail- road Company by which the road was to be operated for twenty years. On February 23, 1880, the lease was extended until December 1, 19:26, subject to perpetual lease thereafter in periods of twenty years, at the ojjtion of the Baltimore & Ohio Railroad Company. These bonds sold in 1903 on a 4.00 basis 1904 3.90 1905 3.90 to 4.00 1906 3.90 1909 4.28 1910 4.48 (bid) 1911 4.42 (bid) December, 1912 4.50 ;onsidered a legal investment for savings bank; [53 ] Maine and Rhode Island. PITTSBURGH JUNCTION RAILROAD First Mortgage Gold 6s Dated July 5, 1882 Maturing July 1, 1922 Interest payable January 1 and July 1 at the company's office, 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,440,000 Outstanding $934,000 Per mile . . 144,360 Provisions of Besides the amount outstanding, as above, there have been deposited under the Baltimore & issue: Ohio-Pittsburgh Junction & Middle Division First Mortgage S^^s of 1925, $481,000 of these bonds, and under the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System Re- funding 4s of 1941, $25,000. Security: The above bonds are secured by a first mortgage on the company's line from Willow Grove, to Laughlin, Pa., and from 36th Street to 9th Street, Pittsburg, Pa., 6.57 miles, together with 22 miles of extra main track and sidings, all in or near Pittsburg. The above bonds upon maturity, if not before, wUl be refunded by the Baltimore & Ohio- Pittsburgh, Lake Erie & West Virginia System Refunding 4s of 1941, a sufficient number of which have been reserved for this purpose. Trustee: Bankers Trust Company, New York. The Pittsburgh Junction Railroad, which was chartered in August, 1881, is controlled by the Baltimore & Ohio Railroad Company through ownership, at the present time, of all the preferred and all but $30,250 of the $1,475,000 common stock of the company. By the terms of a traffic agreement with the Pittsburgh Junction Railroad, the Baltimore & Ohio Railroad as lessee of the Pittsburgh & Connellsville Railroad and the Pittsburgh & Western Raih-oad Companies agrees to furnish freight business to the former up to at least $240,000 gross per annum. The earnings of the Pittsburgh Junction Railroad have been included in those of the Baltimore & Ohio Company since 1902. These bonds sold in 1903 on a 4.25 to 4.65 basis 1904 4.23 4.45 1909 4.47 (bid) 1910 4.68 (bid) 1911 4.60 (bid) ', 1912 4.50 (bid) These bonds are considered a legal investment for savings banks in ]Maine and Rhode Island. 54] PITTSBURGH JUNCTION RAILROAD Second Mortgage Gold 5s Dated April 2, 1894 Interest payable January 1 and July 1 at the company's office, Maturing July 1, 1922 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $300,000 Outstanding $243,000 Provisions of Besides the amount outstanding, as above, $57,000 have been deposited under the Pittsburgh issue: Junction & Middle Division First Mortgage sy^s of 1925, and the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System Refunding 4s of 1941. Security: The above bonds are secured by a second mortgage on the terminal property in or near Pitts- burg which is covered by the first lien of the First Mortgage 6s of 1922. The above bonds, upon maturity, if not before, will be refunded by the Baltimore & Ohio- Pittsburgh, Lake Erie & West Virginia System Refunding 4s of 1941, a sufficient number of which have been reserved for this purpose. Trustee: Bankers Trust Company. These bonds sold in 1902 on a 4.72 to 4.85 basis 1909 4.80 (bid) 1910 5.22 (bid) 1911 6.25 (bid) December, 1912 6.25 (bid) PITTSBURGH & WESTERN RAILWAY First Consolidated Mortgage Gold 4s Dated July 1, 1887 Maturing July 1, 1917 Interest payable January 1 and July 1 at the office of J. P. Morgan & Co., New York. Coupon bonds of $1,000, registerable as to principal. Authorized $10,000,000 Outstanding $650,000 Per mile . . 3,090 Provisions of The above issue has been limited by the terms of the Baltimore & Ohio-Pittsburgh, Lake issue: Erie & West Virginia System First Refunding 4s of 1941, to $9,700,000, of which $9,050,000 have been deposited already under it, leaving a balance outstanding of $650,000 as above. Security: The above bonds are secured by a direct mortgage on 210.63 miles of the company's road, together with appurtenances, equipment, and future acquisitions. The bonds are secured by a first mortgage on 180.63 miles of road, including the line from Rock Point to New Castle, Pa., and by a second mortgage on 30 miles of road from Etna to Zelienople, Pa. Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941, in sufficient number, have been reserved to acquire the outstanding bonds of this issue. Trustee: Bankers Trust Company, New York. The Pittsburgh & Western Railway Company was a reorganization of the Pittsburgh & W^estern Railroad Company in 1887. In March, 1896, a receiver for the Railway was appointed and a decree [53 ] of foreclosure entered February 21, 1900. The company's property was sold under the foreclosure in 1901, and was reorganized as the Pittsburgh & Western Railroad Company, the entire capital stock of which is owned by the Baltimore & Ohio Railroad and deposited with the trustee of its West Virginia System First Refunding 4s of 1941. These bonds sold in 1902 on a 3.77 to 4.00 basis 1903 3.95 4.20 1904 4.00 4.20 1905 4.00 4.25 1906 4.00 4.57 1907 4.75 5.50 1908 3.875 1909 4.22 4.30 1910 4.60 (bid) 1911 4.45 4.50 1912 4.80 These bonds are considered a legal investment for savings banks in Maine and Rhode Island. PITTSBURGH, NEW CASTLE & LAKE ERIE RAILROAD First Mortgage Extended Gold 4s Dated June 1, 1878 Maturing June 1, 1917 Interest payable June 1 and December 1 at the First National Bank, Allegheny, Pa. Coupon bonds of $100, $500 and $1000. Authorized $225,000 Outstanding $82,100 Per mile . . 2,730 The date of maturity of the above issue was extended from June 1, 1898, to June 1, 1917, as above. Provisions of The above issue was limited by the terms of the Baltimore & Ohio-Pittsburgh, Lake Erie & issue: West Virginia System First Refunding 4s of 1941, to $219,000, of which $130,900 have already been deposited under it, leaving $82,100 outstanding as above. Security : The above bonds are secured by a first mortgage on 30 miles of road from Etna to Zclienople, Pa., and future acquisitions to the property. The bonds were ASSUMED by the Pittsburgh & Western Railway Company. Equity: These bonds are prior in lien to the Pittsburgh & Western First Consolidated 4s of 1917 and to the Second 5s of 1941. A sufficient number of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941 have been reserved to acquire the outstand- ing bonds of this issue. The Pittsburgh, New Castle & Lake Erie Railroad Company was consolidated into the Pittsburgh & Western Railway, its bonds being assumed by the latter at that time. The Pittsburgh & Western Railway, as the result of its reorganization in 1901, came under the control of the Baltimore & Ohio Railroad by the purchase of its entire capital stock. These bonds are considered a legal investment for savings banks in Maine and Rhode Island. [5C ) ELLWOOD SHORT LINE RAILROAD First Mortgage Gold 5s Dated January 1, 1892 Maturing January 1, 1922 Interest payable January 1 and July 1 at the company's office, 2 Wall Street, New York. Coupon bonds of $1,000. Authorized $.'500,000 Outstanding $:!()0,000 Per mile . . 96,770 Security: The above bonds are secured by a first mortgage on 3.1 miles of the comj)any's road from North Sewickley to Rocky Point, Pa., together with equipment. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Pittsburgh & Western Railway Company by endorsement. A sufficient number of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941 have been reserved to acquire these bonds. Trustee: Guaranty Trust Company, New York. The Ellwood Short Line Railroad was organized in the State of Pennsylvania, April '25, 18))0, and the road was opened for traffic August 15, 1891. At that time it was leased to the Pittsburgh & Western Railway Company for 30 years. When the latter company went into tlie receiver's hands, the Ellwood Short Line Railroad was purchased by its receiver May 6, 1898. At the present time it is controlled by the Pittsburgh & Western Railway Company through ownership of its entire capital stock. These bonds are considered a legal investment for savings banks in Maine and Rhode Island. PITTSBURGH, CLEVELAND & TOLEDO RAILROAD First Mortgage Gold 6s Dated October 2, 1882 .Maturing Octol^er 1, 1922 Interest payable April 1 and October 1 at the company's office, 2 W^all Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,400,000 Outstanding $441,000 Per mile . . 7,220 Provisions of Besides the amount outstanding, as above, there are $1,959,000 of the above Iwnds deposited issue: with the trustee of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941. Security: The above bonds are secured by a first mortgage on 61.07 miles of road, equipment, and future acquisitions, including the company's road from Newcastle Junction, Pa., to Newton Falls, Ohio. The above bonds are GUARANTEED as to INTEREST by the Pittsburgh & Western Railway and the Baltimore & Ohio Railroad Companies, JOINTLY and SEVERALLY by endorsement. [ 57 ] A sufficient number of the above-mentioned West Virginia System First Refunding 4s of 1941 have been reserved to retire the outstanding bonds of this issue. Trustee: Central Trust Company, New York. The Pittsburgh, Cleveland & Toledo Railroad Company was chartered June 5, 1882, under the laws of Ohio and Pennsylvania. The road was opened for traffic March 1, 1884, and was leased to the Pittsburgh & Western Railway Company for 99 years from July 15th of that year, the lessee guaranteeing the pajonent of the interest on the company's bonds. This guaranty was assumed by the Baltimore & Ohio Railroad Company under an agreement requiring the Pittsburgh & Western Railroad Company to pay the Central Trust Company of New York $12,000 a month on account of rental, default to entail a forfeiture of the lease, etc. The entire capital stock of the Pittsburgh, Cleveland & Toledo Railroad is owned by the Baltimore & Ohio Railroad (which has operated the property as a part of its system since Julj' 1, 1902), and deposited under the above- mentioned West Virginia System First Refunding Mortgage. These bonds sold in 1904 on a 3.60 to 4.40 basis 1909 4.875 (bid) 1910 4.52 (bid) 1911 4.45 1912 4.35 These bonds are considered a legal investment for savings banks in Maine and Rhode Island. OHIO RIVER RAILROAD First Mortgage Gold 5s Dated June 1, 1886 Maturing June 1, 1936 Interest payable June 1 and December 1 at the company's office, 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized, $2,000,000 Outstanding $2,000,000 Per mile . . 11,835 Security: The above bonds are secured by a first mortgage on the company's line from Deadwood, Ohio, to Point Pleasant, W. Va., 169 miles. They are also secured by a first mortgage on the equip- ment and future acquisitions of the line. Equity: These bonds are prior in lien to the Ohio River Railroad General 5s of 1937. A sufficient num- ber of Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia First Refunding 4s of 1941, have been reserved to retire this issue. Trustee: Fidehty Trust Company, Philadelphia. The Ohio River Railroad Company was chartered April 18, 1881, under the laws of West Vir- ginia, and opened throughout in April, 1888. This company is controlled by the Baltimore & Ohio Railroad Company through the ownership of more than 99% of its capital stock, which is deposited under its West Virginia System First Refunding Mortgage. Since July 1, 1902, the road has been operated as a part of the Baltimore & Ohio Railroad System, and its earnings and expenses are in- cluded in the General Income Account. [ 58 J These bonds sold in 1902 on a 4.22 to 4.27 basis 1903 4.18 4.22 1904 4.05 4.40 1905 3.95 1906 4.07 4.20 1908 4.31 4.38 1909 4.15 4.25 1910 4.38 (bid) 1911 4.35 1912 4.38 These bonds are considered a legal investment for savings banks in Rhode Island. OHIO RIVER RAILROAD General Mortgage Gold 5s Dated March 10, 1887 Maturing April 1, 1937 Interest payable April 1 and October 1 at 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $3,000,000 Outstanding $2,941,000 Per mile . . 14,070 Provisions of There remain at present $59,000 of these bonds unissued, and by the terms of the Baltimore issue: & Ohio West Virginia System First Refunding 4s of 1941, they will be deposited thereunder when and if issued. Security : Trustee: The above bonds are secured by a direct mortgage on 207.82 miles of road, together with ap- purtenances, equipment and future acquisitions. They are secured by a first mortgage on 38.82 miles of road, and a second mortgage on 169 miles, covered by the first lien of the Ohio River Railroad First 5s of 1936. A sufficient number of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941 have been reserved to retire the outstanding bonds of this issue. Fidelity Trust Company, Philadelphia. For history see above. These bonds sold in 1902 on a 4.40 to 4.55 basis 1904 4.25 4.38 1905 4.15 4.38 1906 4.15 4.40 1908 4.42 4.95 1909 4.25 4.50 1910 4.80 (bid) 1911 4.38 4.60 1912 4.62 These bonds are considered a legal investment for savings banks in Rhode Island. [ -^9 ] HUNTINGTON & BIG SANDY RAILROAD First Mortgage Gold 6s Dated July 1, 1892 Maturing July 1, 1922 Interest payable January 1 and July 1 at 2 Wall Street, New York. Coupon honds of $1,000, registeral)le as to jirincipal. Authorized $400,000 Outstanding $303,000 Per mile . . 27,550 Provisions of Besides the amount outstanding, as above, there are $97,000 of these bonds deposited with the issue: trustee of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refund- ing 4s of 1941. Security: The above bonds are secured by a first mortgage on 10.92 miles of road, including the line from Huntington to Kenova, W. Va. They are also secured by a first mortgage on all the equipment of the line and future acquisitions. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Ohio River Railroad Company by endorsement. A sufficient number of the above-mentioned West Virginia System First Refunding 4s of 1941 have been reserved to retire the outstanding bonds of this issue. Trustee: Provident Life & Trust Company, Philadelphia. Tlie Huntington & Big Sandy Railroad was chartered April 12, 1890, under the laws of West Virginia. The road was completed during 1892, and leased, in September of that year, to the Ohio River Railroad Company, which guaranteed by endorsement princijial and interest on its bonds. These bonds were quoted in 1910 on a 5.10 basis 1911 5.40 December, 1912 5.45 These l)onds are considered a legal investment for savings banks in Rhode Island. MONONGAHELA RIVER RAILROAD First Mortgage Gold 5s Dated February 1, 1889 Maturing February 1, 1019 Interest payable February 1 and August 1 at 2 Wall Street, New York. Coupon bonds of $1,000, registerablo as to ijrinoijjal. Authoriz.'d $700,000 Outstanding .$700,000 Per mile . . 23,330 Security: The above bonds are secured by a first mortgage on the company's road from Clarksburg to Fairmount, W. Va., 30.24 miles, together with equiijnient and future acquisitions. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Balti- more & Ohio Railroad Company by endorsement. [GO ] A sufBcient number of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia Sys- tem First Refunding 4s of 1941 have been reserved to acquire this issue. Trustee: Mercantile Trust & Deposit Company, Baltimore. The Monongahela River Railroad was chartered September 28, 1888, and was opened for traffic August 4, 1890. The company is controlled by the Baltimore & Ohio Railroad Company through ownership of its entire capital stock, which has been pledged under the above-mentioned West Virginia System First Refunding Mortgage. rhese bonds sold in 1902 on a 3.85 basis 1904 4.50 1905 4.20 1907 4.38 1909 4.57 to 4.87 1910 3.25 3.80 1911 4.70 1912 4.40 4.70 These bonds arc considered a legal investment for savings banks in New Hampshire and Rhode Island. WEST VIRGINIA & PITTSBURGH RAILROAD First Mortgage Gold 4s Dated April 1, 1890 Maturing April 1, 1990 Interest i)ayable April 1 and October 1 at 2 Wall Street, New York. Coupon bonds of $1,000, rcgisterable as to princij)al. Authorized $4,000,000 Outstanding $3,973,000 (4s) 9,000 (5s) Per mile . . 22,500 In 1899 the interest rate of this bond issue was reduced from 5% to 4%. The 5s outstand- ing have been reduced to the amount mentionetl above. Provisions of Besides the $3,982,000 of these bonds in the hands of the public at the present time, there arc issue: $18,000 of this issue deposited under the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941, a sufficient number of which have been reserved to acquire eventually the outstanding bonds of this issue. Security: The above bonds are secured by a first mortgage on the company's lines, totalling 177.13 miles. They are also secured by a first mortgage on certain tracts of timber, coal and mineral lands in Pocahontas, Webster and Nicholas Counties, West Virginia, comprising 134,842 acres. These bonds are GUARANTEED as to INTEREST under terms of lease by the Baltimore & Ohio Railroad Company. The payment of the principal was assumed by the latter company by the terms of an agreement stamped on the bonds at the time the interest rate was reduced from 5%. Sinking Fund: The Baltimore & Ohio Railroad agrees to pay .semi-annually to the trustee $1,500, beginning October 1, 1895, to ])urchase these bonds up to 110, and interest. If not so purchasable at this price, the fund is to be invested in other securities, to be designated by the company. It is also agreed that the bonds so held shall be kept alive by the trustee and the interest thereon paid to the company. [ 01 ] Trustee: Mercantile Trust & Deposit Company, Baltimore. The West Virginia & Pittsburgli Railroad Company was chartered February 6, 1890, under the laws of West Virginia, as a consolidation of the Clarksburg, Weston & Midland Railroad and the Buchannon River Railroad Companies. The company's lines were leased to the Baltimore & Ohio Railroad for 999 years from January 1, 1890. Its entire capital stock is also owned by the latter, and has been deposited under its West Virginia System First Refunding Mortgage. These bonds were quoted in 1909 on a 4.20 basis 1910 4.20 1911 4.30 December, 1912 4.45 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. CLEVELAND TERMINAL & VALLEY RAILROAD First Mortgage 4s Dated October 29, 1895 Maturing November 1, 1995 Interest payable May 1 and November 1 at 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal, or fully registerable. Authorized $6,000,000 Outstanding $3,301,000 Per mile . . 37,940 Provisions of Besides the amount outstanding, as above, $2,699,000 of these bonds have been deposited under issue: the mortgage of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941, a sufficient number of which have been reserved to retire the out- standing bonds of this issue. Security: The above bonds are secured by a first mortgage on 86.8 miles of road including the line from Cleveland to Valley Junction, Ohio. They are also secured by a first mortgage on terminal realty, equipment and future acquisitions. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Bahi- more & Ohio Railroad by endorsement. Trustee: Bankers Trust Company, New York. The Cleveland Terminal & Valley Railroad Company was chartered under the laws of Ohio, as successor to the Valley Railway Company, on October 3, 1895. The company is controlled by the Baltimore & Ohio Railroad Company through the ownership of practically all the capital stock, which has been deposited under its West Virginia System First Refunding Mortgage. These bonds sold in 1902 at par (approximately) 1908 at 4.40 1909 4.25 (bid) 1910 4.25 (bid) 1911 4.30 (bid) December, 1912 4.45 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 62 ] CLEVELAND, LORAIN & WHEELING RAILWAY Consolidated Mortgage Gold 5s Dated November 24, 1893 Maturing October 1, 1933 Interest payable April 1 and October 1 at 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $5,000,000 Per mile . , 26,040 Security: The above bonds are secured by a first mortgage on 191.55 miles of road, all in Ohio, and future acquisitions. Equity: These bonds are prior in lien to the Cleveland, Lorain & Wheeling General 4s of 1936, and the Consolidated Refunding 4>^s of 1930. A sufBcient number of Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941 have been reserved to retire this issue. Trustee: United States Mortgage & Trust Company, New York. The Cleveland, Lorain & Wheeling Railway Company was chartered November 23, 1893, under the laws of Ohio as the consolidation of the Cleveland, Lorain & Wheeling Railroad and the Cleveland & Southwestern Railway Companies. The company's entire capital stock is owned by the Baltimore & Ohio Railroad and pledged under its West Virginia System First Refunding Mort- gage. The property of the company is operated as an integral part of the Baltimore & Ohio Sj'stem. These bonds sold in 1902 on a 4.27 to 4.45 basis 1903 4.25 1904 4.07 1905 4.07 to 4.25 1906 4.15 4.38 1909 4.10 4.30 1910 4.10 4.38 1911 4.20 4.25 1912 4.25 4.45 These bonds are considered a legal investment for savings banks in Maine and Rhode Island. [ G3 ] CLEVELAND, LORAIN & WHEELING RAILWAY General Mortgage Gold 5s Dated June 1, 1890 Maturing June 1, 1936 Interest j^ayable June 1 and December 1 at 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,000,000 Outstanding $890,000 Per mile . . 4,630 Provisions of Of the amount authorized, $893,000 have been issued. Of this amount $890,000 are in the issue: hands of the public, and $3,000 have been deposited under the mortgage of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941. The unissued balance, if issued, will be deposited under the same mortgage, and a sufficient number of the above-mentioned West Virginia System 4s of 1941 have been reserved to retire this issue. Security: The above bonds are secured by a second mortgage on the same property covered by the Cleveland, Lorain & Wheeling Railway First Consolidated 5s of 1933. Redemption: These bonds are redeemable at 105 and interest upon 30 days' notice. Trustee: New York Trust Company, New York. These bonds are considered a legal investment for savings banks in Rhode Island. CLEVELAND, LORAIN & WHEELING RAILWAY Consolidated Refunding Mortgage Gold 4Vl>s Dated January 1, 1900 Maturing January 1, 1930 Interest payable January 1 and July 1 at i Wall Street, New York. Coui)on bonds of $1,000, registerable as to |)rinci])al. Authorized $10,000,000 Outstanding $950,000 Per mile . . 4,950 Provisions of Of the amount authorized, $4,000,000 of these bonds have been issued, of which $950,000 are issue: in the hands of the public, as above, and $3,050,000 have been deposited under the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941. The un- issued balance has been provided for by terms of the West Virginia System 4s of 1941, which makes this a closed mortgage. Security: The above bonds are secured by a third mortgage on the same property covered by the Cleve- land, Lorain & Wheeling Railway Consolidated 5s of 1933 and the General 5s of 1936. [ 64 ] Redemption: These bonds are redeemable at 102 J^ and interest upon 30 days' notice. Equity: These bonds are prior to the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System 4s of 1941, a sufEcient number of which have been reserved to retire this issue. Trustee: Equitable Trust Company, New York. These bonds were quoted in 1909 on a 4.55 basis 1910 4.90 1911 4.90 December, 1912 4.65 These bonds are considered a legal investment for savings banks in Rhode Island. OHIO & LITTLE KANAWHA RAILROAD First Mortgage 5s Dated March 1, 1900 Maturing March 1, 1950 Interest payable March 1 and September 1 at 2 Wall Street, New York. Coupon bonds of $100, $500 and $1,000. Authorized $250,000 Outstanding $228,000 Per mile . . 3,170 Security: The above bonds are secured by a first mortgage on the company's road from Fair Oaks to West Marietta, Ohio, 72.04 miles, and the equipment of the line. Redemption: These bonds are redeemable at 105 and interest upon 90 days' notice. Refund: A sufficient number of the Baltimore & Ohio-Pittsburgh, Lake Erie & West Virginia System First Refunding 4s of 1941 have been reserved to retire this issue. Trustee: Knickerbocker Trust Company, New York. The Ohio & Little Kanawha Railroad was chartered February 10, 1900, under the laws of West Virginia, as the successor to the Zanesville & Ohio Railway Company. A majority of its capital stock is owned by the Baltimore & Ohio Railroad Company and has been pledged under its West Vir- ginia System First Refunding Mortgage. The property of the company is operated as an integral part of the Baltimore & Ohio System. These bonds sold in 1903 on a 4.77 to 5.15 basis 1904 4.70 5.00 1905 4.72 1907 4.67 5.00 1908 4.80 These bonds are considered a legal investment for savings banks in Rhode Island. [65] RAVENSWOOD, SPENCER & GLENVILLE RAILWAY First Mortgage Gold 6s Dated August 1, 1890 Maturing August 1, 1920 Interest payable February 1 and August 1 at 2 Wall Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $400,000 Outstanding $361,000 Per mile . . 11,280 Provisions of issue: Security : Trustee: Of the total amount authorized, $376,000 have been issued, of which $361,000 are outstand- ing, as above, and $15,000 have been deposited under the mortgage of the Baltimore & Ohio- Pittsburgh, Lake Erie & West Virginia System First Eefunding 4s of 1941. The unissued balance, if issued, is to be deposited under the above mortgage, and a sufficient number of the West Virginia System First Refunding 4s of 1941 have been reserved to retire these out- standing bonds. The above bonds are secured by a first mortgage on the company's road from Ravenswood to Spencer, W. Va., 32.4 miles. They are also secured by a first mortgage on the equipment of the line and all future acquisitions. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Ohio River Railroad Company by endorsement. Fidelity Trust Company, Philadelphia. The Ravenswood, Spencer & Glenville Railroad was chartered April 10, 1886, under the laws of West Virginia, and was opened for traffic on January 4, 1892. It is controlled by the Baltimore & Ohio Railroad Company through the ownership of a majority of the capital stock and is operated as a part of that company's system. These bonds were bid in 1909 on a 4.80 basis 1910 4.90 1911 4.88 December, 1912 5.20 [66] BALTIMORE & OHIO RAILROAD Equipment Trust 4%% Certificates Dated February 1, 1912 Maturing February 1, 1913/1922 Interest payable February 1 and August 1 at 2 Wall Street, New York. Coupon certificates of $1,000, registerable as to principal or fully registerable. Authorized $10,000,000 Outstanding $10,000,000 Security: The equipment trust agreement of this issue provides that the face amount of the certificates shall not at any time exceed 90% of the cost of equipment delivered to the trustee as security for the payment of principal and semi-annual dividend warrants. These certificates are secured by 120 consolidated locomotives, 30 Pacific type locomotives, 3,000 steel hopper cars, 2,000 steel coke cars, 2,000 steel underframe box cars, and 1,000 gon- dola cars. The Baltimore & Ohio agrees to lease and maintain the equipment and to pay as rental there- for an amount sufficient to pay the taxes, expenses, dividends and principal of the above certificates. Trustee: Girard Trust Company, Philadelphia. These certificates were underwritten in January, 1912, by Kuhn, Loeb & Company, and Speyer & Company, New York, and offered on about a 4^^ basis. [ 67 ] BANGOR & AROOSTOOK RAILROAD COMPANY BANGOR & AROOSTOOK RAILROAD COMPANY HISTORY The Bangor & Aroostook Railroad Company was chartered under the laws of the State of Maine, March 5, 1891. The original line was opened for transportation from Bangor to Caribou and Fort Fairfield, Maine, on January 1, 1895. A branch from Ashland Junction to Ashland, 43 miles, was opened the following year. The Bangor & Piscataquis Railroad Company was pur- chased in April, 1899, and the Van Buren Extension of the Bangor & Aroostook System was opened in November of the same year. Further additions to the system were negotiated for in 1900, and by 1902 the Aroostook Northern Railroad, the Bangor & Katahdin Iron Works Railway and the Patten & Sherman Rail- road had been included in it. The Fish River Railroad also was opened for traffic on December 15, 1902. This railroad was operated under lease by the Bangor & Aroostook Railroad Company until July, 1903, when the latter bought outright its capital stock and assumed its obligations. No more new extensions were made in the system until July, 1907, when the company pur- chased the common stocks of the Northern Maine Seaport Railroad and the Schoodic Stream Rail- road. In December, 1907, the Mcdford Extension of the system was opened for traffic; in October, 1909, the St. John River Extension was completed, and on June 20, 1910, the Washburn Exten- sion was commercially opened. PROPERTY On June 30, 1912, the Bangor & Aroostook System operated a total of 852.9 miles, of which (524.84 miles were main track. The main line of the system, 155.13 miles, extends from Brownville, to Caribou, Maine. Many important branches and extensions connect with this main line; notably those to Greenville, Oldtown, Katahdin Iron Works, Patten, Ashland, Fort Kent, St. Francis, Van Buren, Limestone and Fort Fairfield. CAPITALIZATION At the close of the company's fiscal year, June 30, 1912, the capital account of the road stood as follows : Common stock $3,198,600 Bonded debt 22,798,000 Equipment trust obligations 935,000 Miscellaneous funded obligations 728,000 Net capitalization $27,659,600 Net capital per mile $43,834 Average miles operated 630.52 Net income to net capital 4.9% Fixed charges to net income 95.2% Margin of safety 4.8% [ 71 ] The above net capitalization, $27,659,600, is that of the railroad proper, and brings the total net capital per mile of road owned ontstanding up to $43,834, as compared with the Maine Central's figure of $47,802. The Bangor & Aroostook Railroad has no leased lines and, consequently, no rental charges. During the decade ending 1912, the capital stock of the Bangor & Aroostook Railroad received three important additions: one in 1906 when $500,000 of new stock was issued for the purchase of the Fish River Railroad, one in 1908, when $960,000 of new stock was issued to purchase the Northern Maine Seaport Railroad and the Schoodic Stream Railroad, and for new construction and equipment, and another during 1910-1911, when $688,600 was issued to finance the St. John River Extension and the Washburn Extension. During the decade the bonded debt of the company outstanding per mile increased more than 100%, and is at present over seven times the outstanding common stock. In fact, of the total net capital of the system, over 80% is represented by this account. To correspond with these capital increases, the average miles under operation during the decade ending 1912 increased from 401 to 631, or 57%o- CHARACTER OF TRAFFIC Geographically, the Bangor & Aroostook System lies in one of the richest farming and hmiber districts of New England. The largest single agricultural commodity which it transports is pota- toes; lumber, in the group of forest products, being a close second. Fully 75% of the total traffic of the system is freight, and 60% of this freight traffic consists of potatoes and forest products. In fact, the earning power of the railroad depends to no small degree upon the potato crop of Aroos- took County and a successful lumbering season. Below is a statement, in tons, of commodities car- ried in the years 1907 to 1912 inclusive: Products of 1912 1911 1910 1909 1908 1907 Tons Tons Tons Tons Tons Tons Agriculture . 467,.'384 420,635 364,870 435,492 259,693 451,196 Animals . . . 11,696 13,709 16,649 17,506 16,081 23,960 Mines . . . 222,244 185,486 185,621 139,249 175,850 128,886 Forests . . . 721,199 667,580 662,183 553,455 587,272 539,173 Manufactures 285,196 294,262 313,018 253,094 270,164 218,629 Miscellaneous 86,494 86,234 70,326 64,823 180,442 267,695 Total tons . . 1,794,413 1,667,906 1,612,667 1,463,619 1,489,502 1,629,539 Although the passenger business, which represents less than 25% of the total traffic of the system, is of secondary importance, a word ought to be said about it at this time. In 1907 more passengers were carried than at any time in the history of the road. In 1908 and 1909 the figures dropjjed off, but recovered sharply in 1910. In the fiscal year of 1912 a new high record was set when over 778,000 people were carried over the company's lines. The passenger earnings were very naturally reflected in the number of passengers carried, since the average rate per passenger per mile has remained very nearly stationary since 1907. Below are some of the more salient passenger statistics of the system for the years 1907 to 1912 inclusive: Year 1907 1908 1909 1910 1911 1912 [ 72 ] Total passenger Total passengers Average revenue Average rat revenue carried per passenger per mile $615,908 701,536 $.877 $.0240 597,993 697,518 .857 .0238 560,446 627,775 .892 .0235 638,143 743,707 .858 .0237 626,845 760,825 .823 .0235 631,264 778,567 .811 .0226 EARNINGS During the decade ending December 30, 1912, the earnings of the Bangor & Aroostook System increased satisfactorily. The steady and substantial growth in population, manufactures and agri- culture, which has characterized the State of Maine, should be reflected in increased revenue from year to year. In 1890, one year before the railroad was organized, the population of Aroostook County was about 45,000. This had increased to 75,000 by the census of 1910, while the assessed value of the county, which was $11,000,000 in 1890, has grown to over $37,000,000 today. Following is a comparative statement of the gross and net earnings of the system, also figured on the basis of miles operated, from 1907 to 1912 inclusive: Year Average miles Gross Per mile Net Per mile operated earnings eammgs 1907 . . . 481.5 $3,221,696 $6,684 $1,088,401 $2,258 1908 . . . 500.7 2,844,082 5,677 1,044,261 2,084 1909 . . 514.7 2,916,815 5,664 1,127,649 2,190 1910 . . . 529.9 2,990,529 5,642 1,205,239 2,274 1911 . . . 618.1 3,173,111 5.134 1,169,339 1,893 1912 . . 630.5 3,345,241 5,301 1,196,568 1,897 MAINTENANCE AND IMPROVEMENTS It has always been the policy of the company to keep its maintenance charges on par with re- quirements, rather than impair the working efliciency of the road by permitting continued depre- ciation of property. Since 1905 maintenance charges have consumed an average of 27% of the gross earnings of the system, as compared with 25% for the Boston & Maine, and 31% for the Maine Central Systems. Below is a statement of the amounts spent for additions and betterments from 1907 to 1912 in- clusive, and also the accounts against which they were charged : Year Betterments charged to Total Income Capital 1907 $99,625 $336,950 $436,575 1908 1,338,635 1,338,635 1909 276,695 276,695 1910 496,076 496,076 1911 104,910 663,872 768,782 1912 383.405 383,405 $204,535 $3,495,633 $3,700,168 204,535 $3,700,168 Compiled from the annual reports of the company, we find the following statistics concerning maintenance of way : Tons of steel rails laid (85 lbs. per yd.) . . New ties laid .... Cubic yards ballast . . Steel tie plates laid . . 48 2,386 5,177 2,669 1,812 2,707 138,163 175.526 102,812 79,767 96,668 93,634 9,923 88,598 13,535 63,208 157,145 3,000 130,350 75,000 169,100 141,210 [ 73 ] Another item of importance which should be noted is the replacing of wooden culverts with those of iron and concrete construction. Since 1907, 197 of these have been replaced, 150 with iron and 47 with concrete. At present the main lines of the system are equipped practically throughout with iron and concrete bridges, while 613.03 miles of road are now laid with 85 and 70 pound steel rails, enabling it to bear heavier traffic. DIVIDENDS The Bangor & Aroostook Railroad began paying dividends in 1904, when 3% was declared upon outstanding capital stock. In 1905 the dividend was increased to 3J^%, and from 1906 to 1912 4% was paid. The annual surpluses of the system since 1907, after deducting dividends and better- ment charges were as follows: $124,825 1910 9,880 1911 43,075 1912 STATISTICS $85,018 38,052 64,387 * On the following page are given capitalization, earnings and traffic statistics of the Bangor & Aroostook Railroad, based on the average miles operated, for the year 1900, and for the years 1905 to 1912 inclusive: * Deficit. [ 74 J BANGOR & AROOSTOOK RAILROAD Fiscal Capital Funded Rentals Gross and net Average miles Extra main year stock debt (a> 5% capital operated track 1900 $6,319 $17,609 $1,170 $25,098 364 1905 3,603 27,037 30,640 428 1906 3.400 33,919 37,319 455 1907 3,222 36,602 39,824 482 1908 5,010 40,008 45,018 501 31 1909 4,874 38.835 43,709 515 31 1910 5.668 42,443 48,111 530 31 1911 5,175 37.689 42,864 618 31 1912 5.069 38,765 43,834 631 30 Fiscal Gross Maintenance Transportation Net Other Fotal net Fixed Surplus available year operating and general operating income income charges revenue Way Equipment expense revenue for dividends 1900 $3,373 $609 $243 $1,189 $1,334 $7 $1,341 $979 $362 1905 5,041 775 486 1,953 1,827 17 1,844 1,305 539 1906 5,487 860 463 2,072 2,092 29 2,121 1,462 659 1907 6,684 1,145 714 2,567 2,258 5 2,263 1,648 615 1908 5,677 856 543 2,193 2,084 2,084 1.871 213 1909 5,664 937 630 1,907 2,190 2,190 1,911 279 1910 5,642 843 634 1,890 2,274 326 2,600 1,937 663 1911 5,134 814 596 1,831 1,893 288 2,181 1,918 263 1912 5,301 873 550 1,981 1,897 238 2,135 2,034 101 Fiscal Divi- Other Surplus Operating Total main- Conducting Fixed G ross Net Percent Percent year dends charges expenses enance transportation charges earnings income earned on freight to income to gross gross to gross to gross to gross to net capita to all earnings earnings earnings earnings capital capital stock traffic 1900 $218 $144 60.4% 25.4 35.0% 29.1% 13.4% 5.3% 5.7% 70% 1905 $127 245 167 63.7 25.0 38.7 25.8 16.4 6.C 14.9 76 1906 137 354 168 61.8 24.2 37.6 26.6 14.7 or 18.1 75 1907 149 206 260 69.5 31.1 38.4 24.6 16.9 5.7 19.0 78 1908 194 19 68.7 30.1 38.6 32.8 12.6 4.7 4.3 73 1909 195 84 63.4 29.7 33.7 33.7 12.9 5.0 5.9 72 1910 196 305 162 59.7 24.2 35.5 34.3 11 7 5.4 11.6 73 1911 201 62 63.1 27.5 35.6 37.4 11.9 5.0 5.1 75 1912 203 102* 64.2 26.9 37.3 38.3 12.1 4.9 2.0 76 Fiscal Train Maintenance Conducting Train Rates per mile Freight Train load Passenger, year mile per re venue transportation mile density rei'enue freight and earnings train mjle per revenue earnings Freight Passenger tons company (gross) Way Equipment train m le (net) cars 1900 157,299 116 1,815 3,360 1905 $1.61 $.248 $.155 $ 623 '$ 584 $.0122 $.0246 284,955 183 1906 1.72 .290 .146 631 653 .0119 .0248 321,285 191 3,366 1907 1.92 .344 .214 770 592 .0119 .0240 408,165 221 4,561 1908 1.95 .319 .202 817 612 .0116 .0238 319,363 211 5,528 1909 2.21 .379 .254 770 807 .0117 .0235 352,384 237 5,576 1910 2.18 .325 .244 728 883 .0115 .0237 360,825 259 5.576 1911 2.03 .322 .236 725 737 .0116 .0235 331,377 255 5.582 1912 2.01 .332 .208 753 717 .0112 .0226 357,187 255 5,569 634 miles are covered by first mortgages. * Deficit. [75] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Bangor & Aroostook System, together with the bases upon which they have sold during the decade ending December 31, 191'2: BANGOR & AROOSTOOK RAILROAD COMPANY First Mortgage Gold 5s Dated January 1, 1893 Maturing January 1, 1943 Interest payable January 1 and July 1 at Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $3,360,000 Outstanding $3,360,000 Per mile . . 15,840 Security: The above bonds are secured by a first mortgage on 212.17 miles of road as follows: Brown- viUe to Caribou, 154.95 miles; Ashland Junction to Ashland, 43.92 miles; Fort Fairfield Junc- tion to Fort Fairfield, 13.30 miles, all in Maine. The bonds are further secured by a first mortgage on all the equipment of the road and future acquisitions. Equity: These bonds are prior in lien to $112,000 Bangor & Aroostook Second 5s of 1945, and to the Bangor & Aroostook Consohdated and Refunding 4s of 195], a suflScient number of the latter being reserved to refund or purchase this issue. Trustee : Guaranty Trust Company, New York. These bonds were quoted in 1909 on a 4.35 basis (bid) 1910 4.78 (bid) 1911 4.60 (bid) December, 1912 4.55 (bid) These bonds are considered i investment for savings banks in Maine and Massachusetts. BANGOR & AROOSTOOK RAILROAD COMPANY Piscataquis Division First Mortgage Gold 5s Dated April 1, 1899 Maturing January I, 1943 Interest payable April 1 and October 1 at Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $1,500,000 Security : Outstanding $1,500,000 Per mile . . 19,730 Equity : The above bonds are secured by a first mortgage on 76 miles of road from Oldtown to Green- ville, Me. They are further secured by a first mortgage on the equipment of the line and all future acquisitions. These bonds are prior in lien to the Bangor & Aroostook Consolidated Refunding 4s of 1951, a suflScient number of the latter being reserved to refund or purchase this issue. These bonds were quoted in 1909 on a 4.65 basis (bid) 1910 4.58 to 5.35 (bid) 1911 4.80 (bid) December, 1912 4.75 (bid) These bonds are considered a legal investment for savings banks in Maine and Massachusetts. [ 78] BANGOR & AROOSTOOK RAILROAD COMPANY Van Buren Extension First Mortgage Gold 5s Dated April 1, 1809 Maturing January 1, 1943 Interest payable April 1 and October 1 at Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $500,000 Outstanding $500,000 Per mile . . 15,100 Security: The above bonds are secured by a first mortgage on 33.11 miles from Caribou to Van Buren, Me. They are further secured by a first mortgage on the equipment of the line and all future acquisitions. Equity: These bonds are prior in lien to the Bangor & Aroostook Consohdated Refunding 4s of 1951, a sufBcient number of the latter being reserved to refund or purchase this issue. Trustee: Guaranty Trust Company, New York. These bonds were quoted in 1909 on a 4.70 basis (bid) 1910 4.70 to 5.35 (bid) 1911 4.87 (bid) December, 1912 4.87 (bid) These bonds are considered a legal investment for savings banks in Maine and Massachusetts. BANGOR & AROOSTOOK RAILROAD COMPANY Medford Extension First Mortgage Gold 5s Dated May 1, 1907 Maturing May 1, 1937 Interest payable May 1 and November 1 at Brown Bros. & Company, New York and Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 35,780 Security: The above bonds are a first mortgage on 27.95 miles from South Lagrange to Packard's, Me., at a point in connection with the main line of the Bangor & Aroostook Railroad near Seboois Lake. They are further secured by any future acquisitions. Trustee: The United States Trust Company, New York. These bonds are considered a legal investment for savings banks in Maine and Massachusetts. [79 ] AROOSTOOK NORTHERN RAILROAD COMPANY First Mortgage Gold 5s Dated October 1, 1897 Maturing October 1, 1947 Interest payable April 1 and October 1 at Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $^225,000 Outstanding $225,000 Per mile . . 14,310 Security: These bonds are secured by a first mortgage on the Aroostook Northern Railroad Company's line from Caribou to Limestone, Me., 15.72 miles. They are further secured by a first mortgage on the equipment of the line and future acquisitions. These bonds were ASSUMED by the Bangor & Aroostook Railroad Company. They are prior in lien to the Bangor & Aroostook Consolidated Refunding 4s of 1951, a sufficient num- ber of the latter being reserved to refund or purchase this issue. Trustee: Guaranty Trust Company, New York. The Aroostook Northern Railroad Company was chartered under the laws of the State of Maine in July, 1897. It was commercially opened for service in December of that year. From November 27, 1897, it was leased for 999 years to the Bangor & Aroostook Railroad Company at a yearly rental equal to the interest on the outstanding bonds and $51 for organization expen.ses. On July 1, 1901, it was consolidated into the Bangor & Aroostook System. These bonds were quoted in 1909 on a 4.C0 basis (bid) 1910 4.95 (bid) These bonds are considered a legal investment for sa\'ings banks in Maine and Massachusetts. NORTHERN MAINE SEAPORT RAILROAD COMPANY Railroad and Terminal First Mortgage Gold 5s Dated April 1, 1905 Maturing April 1, 1935 Interest j)ayable April 1 and October 1 at United States Mortgage & Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $5,000,000 Outstanding $4,720,000 Per mile . . 82,800 Provisions of $280,000 of these bonds are reserved for extensions and equipment under the restriction of the issue: mortgage. Security: The above bonds are a first mortgage on the Northern Maine Seaport Railroad Company's lines, totalling 57.01 miles, as follows: from South Lagrange to Searsport, Me., and from Cape Jellison Junction to Wharf, and Northern Maine Junction. These bonds are further secured by a first mortgage on the equipment of the line and future acquisitions. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Bangor & Aroostook Railroad Company, by endorsement. Trustee: United States Mortgage & Trust Company, New York. [ 80 i The Northern Maine Seaport Railroad Company was chartered under the laws of the State of Maine, December 1, 1904, and the road was commercially opened for service in November, 1905. From November 21, 1905, it was leased for 999 years by the Bangor & Aroostook Railroad Company, which also owns the entire capital stock, at an annual rental which includes interest on the bonds outstanding and expenses of maintenance and operation. These bonds were quoted in 1909 on a 4.72 basis (bid) 1910 4.95 1911 4.75 December, 1912 5.00 These bonds are considered a legal investment for savings banks in Maine and Massachusetts. BANGOR & AROOSTOOK RAILROAD COMPANY Consolidated Refunding Gold 4s Dated July 1, 1901 Maturing July 1, 1951 Interest jjayable January 1 and July 1 at Brown Brothers, New York, and Lee, Higginson & Co., Boston. Coupon bonds of $1,000, registerable as to principal or fully registcrable. Authorized $20,000,000 Outstanding $7,931,000 Per mile . . 18,570 Provisions of The indenture provides that $12,500,000 of the authorized amount of this issue shall be re- issue: served to purchase or refund underlying securities, $3,000,000 shall be reserved to pay the cost of acquiring additional property to the existing railroad and for providing improvements upon and equipment of those roads up to $250,000 per annum, and $4,500,000 shall be re- served for extensions to the existing railroad at not exceeding $25,000 a mile. Security: The above bonds are secured by a direct mortgage on 426.87 miles of railroad as follows: (1) A first mortgage on 99.40 miles all in Maine; (2) a second mortgage on 124.83 miles; (3) a third mortgage on 212.17 miles. Equity: These bonds are subject to the following issues: $3,360,000 First 5s of 1943; $112,000 Second 5s of 1945; $1,500,000 Piscataquis Division First 5s of 1943; $500,000 Van Buren Extension First 5s of 1943; and $225,000 Aroostook Northern First 5s of 1947. As these issues mature they may be refunded by these bonds. Trustee: Old Colony Trust Company, Boston. These bonds were quoted in 1906 on a 4.27 basis 1908 5.15 1909 4.95 1910 5.20 1911 5.20 December, 1912 5.20 These bonds are considered a legal investment for savings banks in Maine. [ 81 ] BANGOR & AROOSTOOK RAILROAD COMPANY Second Mortgage Gold 5s Dated February 27, 1895 Maturing July 1, 1945 Interest payable January 1 and July 1 at Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $1,050,000 Outstanding $112,000 Per mile . . 530 Provisions of Of the total amount authorized, $112,000 are outstanding as above, and the balance, $938,000, issue: have been purchased by the trustee of the Bangor & Aroostook Consohdated Refunding 4s of 1951. Security : The above bonds are secured by a second mortgage on the same property covered by the first lien of the First Mortgage Gold 5s of 1943, 212.7 miles. (For description see that issue.) Equity: The above bonds are subject to the $3,360,000 First Mortgage Gold 5s of 1943. They are prior in lien to the Consolidated Refunding Gold 4s of 1951, a sufficient number of which have been reserved to refund or purchase this issue. Trustee : United States Mortgage & Trust Company, New York. These bonds were quoted in 1909 on a 4.87 basis (bid) 1910 5.00 (bid) These bonds are considered a legal investment for savings banks in Maine. BANGOR & AROOSTOOK RAILROAD COMPANY Washburn Extension First 5s Dated August 1, 1909 Maturing August 1, 1939 Interest payable February 1 and August 1 at Central Trust Company, New York, and at Boston. Coupon bonds of $1,000, registerable as to principal or fully registerable, Authorized $1,650,000 Outstanding $1,650,000 Per mile . . 30,000 Security: The above bonds are secured by a first mortgage on the Ashland Branch of the Bangor & Aroostook Railroad from Squa Pan to Stockholm, and the branch from Mapleton to Presque Isle, all in Maine, 54.98 miles. Trustee: Central Trust Company, New York. These bonds were quoted in 1910 on a 5.10 basis (bid) 1911 5.25 1912 5.40 These bonds are considered a legal investment for savings banks in Maine. [82] BANGOR & AROOSTOOK RAILROAD COMPANY St. John River Extension First Mortgage 5s Dated August 1, 1909 Maturing August 1, 1939 Interest payable February 1 and August 1 at Central Trust Company, New York, and at Boston. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $1,800,000 Outstanding $1,800,000 Per mile . . 30,000 Security: The above bonds are secured by a first mortgage on the road from Van Buren by way of Grand Isle and Fort Kent to St. Francis, 60 miles, all in Maine. It is also a first mortgage on the yards, buildings, turn tables and equipment of the line. Trustee: Central Trust Company, New York. These first mortgage bonds are a direct obHgation of the Bangor & Aroostook Railroad Com- pany. The road is built almost entirely with 70-pound rails and steel bridges, and is opening up a great agricultural and lumber producing country, which before this tinie had practically no transportation facilities. These bonds were quoted in December, 1912, on a 5.35 basis These bonds are considered a legal investment for savings banks in Maine. AROOSTOOK COUNTY Gold 41 -s Dated July 1, 1895 Maturing .July 1, 1015 Interest payable January 1 and July 1 at the office of the Bangor & Aroostook Railroad Company, Bangor. Coupon bonds of $1,000 Authorized $228,000 Outstanding $228,000 Security : These bonds were issued by Aroostook County, Me., in aid of the construction of the Bangor & Aroostook Railroad. They are secured by a deposit with the trustee of a like amount of its Consolidated Refunding 4s of 1951. These bonds have been ASSUMED by the Bangor & Aroostook Railroad Company. Trustee: Old Colony Trust Company, Boston. These bonds are considered a legal investment for savings banks in Maine. [83] BANGOR & AROOSTOOK RAILROAD 5% Equipment Trust Certificates Series " C " Dated June 1, 1906 Maturing $45,000 each December 1 and June 1 to June 1, 1916 Interest payable June 1 and December 1 at Brown Brothers & Company, New York and Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $900,000 Outstanding $360,000 Provisions of Of the $900,000 authorized, $360,000 are outstanding as above, and $540,000 had been re- issue: deemed to June 1, 1912. Security: The above certificates were issued by the trustee and are secured by 510 box cars and 635 flat cars costing $1,000,903. The title to the equipment does not revert to the company until all these obligations have been paid. The certificates are GUARANTEED as to PRINCIPAL and INTEREST by the Bangor & Aroostook Railroad Company. Trustee: Pennsylvania Company for Insurances on Lives and Granting Annuities, Philadelphia. These certificates were offered in 1906 on a 4.80 basis These bonds are considered a legal investment for savings banks in Maine. BANGOR & AROOSTOOK RAILROAD 5% Equipment Trust Certificates Series "D" Dated April 1, 1907 Maturing $45,000 each April 1 and October 1 to April 1, 1917 Interest payable April 1 and October 1 at Brown Brothers & Company, New York and Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $900,000 Outstanding $405,000 Provisions of Of the total amount authorized, $405,000 are outstanding as above and $495,000 had been issue: redeemed to October 1, 1912. Security: The above certificates were issued by the trustee, and are secured by 700 box cars, 300 flat cars, 40 stock cars and 6 caboose cars costing $1,000,000. The title to this equipment does not revert to the railroad company until all these obligations have been paid. The certificates are GUARANTEED as to PRINCIPAL and INTEREST by the Bangor & Aroostook Railroad Company. Trustee: Pennsylvania Company for Insurances on Lives and Granting Annuities, Philadelphia. These certificates were offered in 1907 on a 5.50 basis. The.sc bonds arc considered a legal investment for savings banks in Maine. [84] BANGOR & AROOSTOOK RAILROAD 5% Equipment Trust Certificates Series " E " Dated October 1, 1911 Maturing October 1, lObZ-lOlG Interest payable April 1 and October 1 at Brown Brothers & Company, New York and Boston. Coupon bonds of $1,000, registcrable as to principal. Issued $125,000 Outstanding $125,000 Security: The above certificates were issued by the trustee and are secured by 2 gas electric motor cars and 6 locomotives. The title to this equipment does not revert to the company until all these obligations have been paid. The certificates are GUARANTEED as to PRINCIPAL and INTEREST by the Bangor & Aroostook Railroad Company. Trustee: Pennsylvania Company for Insurances on Lives and Granting Annuities, Philadelphia. These bonds are considered legal investments for savings banks in Maine. [ 85 ] BOSTON & MAINE RAILROAD COMPANY BOSTON & MAINE RAILROAD COMPANY HISTORY The Boston & Maine Railroad was incorporated in 1835 under the laws of the State of New Hampshire, in 1841 under the laws of the Commonwealth of Massachusetts, and in 1843 under the laws of the State of Maine, as the result of a consolidation, January 1, 1842, of the Boston & Portland Railroad of Massachusetts, the Boston & Maine Railroad of New Hampshire and the Maine, New Hampshire & Massachusetts Railroad of Maine. Three years later the Boston & Maine Extension Railroad was acquired. The present Boston & Maine System represents the consolidation, on the 9th of May, 1890, of the Boston & Maine Railroad, the Eastern Railroad Company and the Portsmouth, Great Falls & Conway Railroad Company. Just prior to this, control of the Boston & Lowell Railroad, the Nashua & Lowell Railroad and several smaller lines was acquired by lease. The Concord & Montreal Railroad and its dependencies were leased to the Boston & Maine for 91 years from April 1, 1895. In 1899 it absorbed the Eastern Railroad of New Hampshire and the Portsmouth & Dover Railroad; in 1900, the Portland, Saco & Portsmouth Railroad and the Portland & Rochester Railroad. In that same year (1900) the Boston & Maine began to operate, under a 99-year lease, the Fitchburg Railroad and leased lines, aggregating 457 miles of road, and in 1901 the company pur- chased the capital stock of the Central Massachusetts Railroad. In addition to this the Boston & Maine Railroad owns $5,043,696 par value, or 51%, of the $9,979,700 capital stock of the Maine Central Railroad, which operated, June 30, 1912, 1,204.08 miles of road. In June, 1911, its company purchased the property of the Worcester, Nashua & Rochester Railroad Company, heretofore operated under a lease, and assumed its funded obligations. By June 30, 1912, the Boston & Maine controlled 30,630 of the 30,644 shares of the above company outstanding. On July 1, 1911, the company sold its property in Portland and Westbrook, Maine, to the Portland Terminal Company for $2,581,568. PROPERTY The extent of the system's mileage has been indicated aljove. In 1912 a total of 2,291.02 miles of main track were operated, of which 46.80 miles were electric street railways. Of the 2,244.22 miles of steam railway operated, 707.33 miles were owned in fee and 1,536.89 miles were lines of leased roads. The bulk of the system lies in Massachusetts and New Hampshire, about one-half of it in the latter State. Of the total mileage, 589.11 miles, or about 22% of the entire system, is double track. The main lines extend from Boston, Massachusetts, to Portland, Maine (via two divisions); Spring- field, Massachusetts; Sherbrooke, Canada; Rotterdam Junction and Troy, New York. These main lines are connected at the above points by many branches. [ 89] CAPITALIZATION On June 30, 1912, the capital account of the Boston & Maine Railroad stood as follows: Preferred stock $3,149,800 Common stock 39,505,390 Total stock $42,655,190 Bonded debt 43,849,000* Nominal capital $86,504,190 Rentals capitalized @ 5% 103,540,000 Gross capitalization $190,044,190 Securities owned 12,500,685 Net capitalization $177,543,505 Net capital per mile operated $79,119 Average miles operated .... 2,244.22 Net income to net capital .... 6.6% Fixed charges to net income 89.0% Margin of safety 11.0% As may be seen by the foregoing, the capitalization of the Boston & Maine proper, excluding the item of rentals, amounted in 1912 to $86,500,000, or an average of $122,348 per mile owned in fee. In point of fact the Boston & Maine System is a collection of small properties, most of which have been gained by leases and moulded together into an operating unit. The rental payments for the fiscal year of 1912 amounted to $5,176,879 — almost three times the interest on its nominal debt. This charge, capitalized at 5%, brings the total gross capitalization up to $190,000,000 or about $85,000 per mile of road operated. The margin of safety figure is of utmost importance to security holders. Of the fixed charges, which used up 89% of the total net income, fully one-half are represented by rentals paid, which include fixed dividends on the stocks of the leased roads, and guaranteed interest on their out- standing funded debts. On account of the increased charge for the use of freight equipment agreed upon by the American Railway As.sociation, efifective January 1, 1913, the stockholders of the company ap- proved on October 7, 1912, an issue of $7,500,000 Twenty-year 4^2% Bonds to purchase new equipment, pay for additional improvements which should be capitalized, and refund First Mortgage Bonds of the Worcester, Nashua & Rochester Railroad Company, maturing January 1, 1913, also an issue of 106,637 additional shares of common stock. In February, 1913, the approval of the Railroad Commissioners of Massachusetts was granted for both issues, and pending a fa\or- able market, it is expected that the bonds will be offered to the public. CHARACTER OF TRAFFIC Through the growth in population and wealth of the cities which it serves, the traflic of the system has risen steadily. To be sure, this growth of traffic received a temporary set back during the two years which followed the disturbances of 1907. This was evidenced by the traffic records of the system during the years 1908 and 1909. By 1910, however, the manufacturing and other * In addition, the company had $12,000,000 notes payable on June 30, 1912. [ 90 ] coininercial industries of New England that are served by the company's lines were more than ordinarily active and prosperous. In that year the gi'oss volume of tons carried increased nearly 2,500,000 and still further increases have been recorded since, as is shown in the table below: Products of 1912 1911 1910 1909 1908 Tons Tons Tons Tons Tong Agriculture 3,719,467 3,292,104 2,979,023 3,080,786 2,412,366 Animals 1,004,927 929,971 1,044,721 1,050,966 961,184 Mines 6,258,516 5,813,916 5,966,008 5,300,839 6,022,560 Forests 2,995,216 3,149,176 3,334,577 2,731,885 2,767,554 Manufactures .... 4,444,828 4,305,846 4,659,081 3,801,572 3,479,566 Miscellaneous .... 5,272,033 5,573,288 4,832,118 4,448,266 4,492,623 Total tons 23,694,987 23,064,301 22,815,528 20,414,314 20,135,853 Not only did the volume of freight carried increase markedly during 1910 and 1911, but the volume of passenger business increased as well. Nearly 5,000,000 more people travelled during 1910 than in 1909, and over 1,300,000 more used the company's lines in 1911 than in 1910, while the gain in 1912 over 1911 was about 620,000. This significant increase was due very considerably to the influx of vacationists to northern New England. From year to year the problem of transporting these summer tourists has become one of growing importance. In 1912 the passenger business of the system amounted to $15,693,675, or 33% of gross earnings from operation. This figure is over $2,200,000 greater than in 1908, an increase of 16%. Below is a comparative statement of the salient passenger statistics of the system for the years 1908 to 1912 inclusive: 1908 1909 1910 1911 1912 Since the addition of the Fitchburg Railroad in 1900, the mileage of the system has increased but slightly, while gross earnings have increased] more than 107%. The gross earnings per mile have increased from $12,643 in 1900, to $20,495 in 1912. Gross earnings in 1912 were the best the company has yet shown. The net earnings of the system, however, have been erratic. Having increased from over $6,500,000 in 1900 to over $10,000,000 in 1907, they received a set back in 1908. The business de- pression which followed the panic of 1907 made itself felt upon the Boston & Maine. It was found impossible to bring the scale of operating expenses at once into accord with the reduced income; hence, a considerable reduction in net earnings. In 1910 net earnings had increased to over $12,000,000, but the fiscal year of 1911 showed a considerable falling off from that high figure. This was due primarily to large increases in the wage account of the company. Had the company been able to maintain the wage item at the 1910 figures, the net revenue applicable to dividends would have been increased by $2,468,457.* Gross and net earnings are shown in detail by the following table for the year 1900 and for the years 1906 to 1912 inclusive: * Seventy-eighth Annual Report of the Boston & Maine Railroad for the year ending June 30, 1911, page 7. [ 91 ] Total passengers Total passenger Average revenue Average rate carried revenue per passenger per mile 43,214,995 $13,537,387 $.313 $.0171 42,836,742 13,451,751 .314 .0170 47,365,852 14,655,065 .309 .0169 48,666,086 15,524,431 .319 .0180 49,284,076 15,693,675 .318 .0178 EARNINGS Year Average miles operated 1900 1,752 1906 2,287 1907 2,288 1908 2,242 1909 2,243 1910 2,243 1911 2,243 1912 2,243 Gross Per mile Net Per mile earnings earnings $22,148,602 $12,643 $6,543,584 $3,736 39,214,202 17,146 9,860,834 4,311 41,125,256 17,974 10,156,859 4,439 38,990,749 17,391 9,036,552 4,301 39,528,698 17,623 11,264,843 5,024 43,357,175 19,330 12,020,851 5,359 44,815,084 19,979 9,066,381 4,309 45,990,304 20.495 10,903,008 4,868 MAINTENANCE In spite of the fact that the Boston & Maine was facing an increase of wages during the fiscal year of 1911, the management decided to sacrifice surphis earnings still further by lifting the stand- ard of upkeep above that which formerly prevailed. Never, before 1910, had $10,000,000 been spent in any single fiscal year on the Boston & Maine's maintenance. Yet on top of this record-breaking sum spent in that year, there was a still further increase in 1911 of over $1,600,000, or 15%, as is shown by the following table: Year Maintenance Maintenance Total Per mile of way of equipment maintenance 1908 $4,756,446 $4,760,812 $9,517,258 $4,159 1909 4,251,565 4,730,778 8,982,343 3,924 1910 5,253,611 5,446,734 10,700,345 4,770 1911 6,066,120 6,248,435 12,314,555 5,490 1912 5,823,545 6,411,596 12,235,141 5,452 ADDITIONS AND BETTERMENTS More remarkable than the maintenance record of the Boston & Maine for the last four years, has been the showing made in additions and betterments. Since 1908 $27,700,000 has been spent in this way and more than half of it has been used for purchasing the latest kinds of equipment. In 1909 the amount expended was comparatively small. 1910 showed twice as large an outlay, while during 1911 nearly five times the amount spent in 1909 was thus expended. Below is a statement of the amount spent in additions and betterments from 1908 to 1912 inclusive: Year Equipment 1908 $4,815,831 1909 1,115,291 1910 2,535,235 1911 6,206,922 1912 996,102 Other Total Net expenditure betterments betterments for betterments $1,303,046 $6,118,877 $5,948,394 1,124,454 2,239,745 1,582,691 2,362,105 4,897,340 4,770,394 4,786.937 10,993,859 10,993,859 2,354,878 3,350,980 957,445 $27,700,304 $24,258,783 Below is a statement of the various accounts against which the above-named iHiterinents were charged during the years in question: [ 92 ] Vear Charged to Income Net expenditure Capital Leased roads for betterments 1908 $5,807,857 .... $80,536 $5,948,39-4 1909 949,308 $592,284 41,099 1,582,691 1910 3,108,437 1,469,116 198,841 4,776,394 1911 8,511,737 2,482,122 ... 10,993,859 1912 501,698 1,459,142 .... 957,445 $17,935,647 $6,002,664 $320,470 $24,258,783 As will be seen by tlie foregoing, about 75% of the total net expenditure for betterments was charged to the cajiital account. These charges appear on the balance sheets of the railroad as follows : In 1908, to offset the amount charged to capital, notes payable were increased over $7,000,000. In 1909, $11,000,000 in notes payable were wiped out by a $i2,000,000 increase in the funded debt; the difference. $1,000,000. going into betterments. In 1910, notes payal)le were increased l)y $4,()()0,- 000 to offset the above-noted improvements for that year. In 1911, tlu> capital stock of the com])any was increased nearly $10,000,000 and notes payable nearly $2,000,000, the two offsetting in part the purchase of the Worcester, Nashua & Rochester Railroad and the improvements charged to the capi- tal account for the year. Early in May, 1911, the expensive task of electrifying the Hoosac Tunnel was completed. About 22 miles, measured as single track, were thus equipped, thereby measurably increasing the traffic capacity of the Fitchburg Division, which, under old conditions, had reached its limit. A well- equipped round house and repair shop were included in this electrification. The work of eliminating highway grade crossings has been going on steadily for the last few years and is proving an expensive, although necessary, task. During 1912, $630,812 was thus expended. The total net expenditure for this work on the Boston & Maine Railroad and K-ased lin<>s to June .'iO, 1912, has been $5,948,904. Another important item imder this heading is the work of installing block signals, which has been pushed so that now all the main lines of the system are comjiletely e(|uii)])ed with these safety devices. The prosecution of this important work had cost the comi)any .* 1,338,597 to June 30, 1912. Besides this, new and better stations are being built, freight terminals are l)eing enlarged, exten- sive repair shops are in process of construction at Billerica, Massachusetts. All the station tele- graph offices from which train orders are issued have been equipped with train order signals of semaphore pattern, grades have been reduced, and rigid economy is being practiced in all the oper- ating departments. DIVIDENDS Since 1886, the full 6% has been paid on the preferred stock, paid on the common stock: Year 1886 . 1887 . 1888-9 1890 . 1891 . Rate 93^% 10 9 9 Year 1892. . 1893. . 1894-9. 1900-9 . 1910. . 1911. . 1912. . ind the following rates have be Rate fi(V 4 6 7 6 4% The largest dividend was in 1887, when 10% was paid. Since then it has almost steadily de- creased. The reason for this decline in dividends seems to be due in a large measure to the annual rental charges which the system is required to meet. There are probably cases where the high rate [ 93 ] of interest guaranteed has been greater than the earnings of the road in question, resulting in a loss to the Boston & Maine itself. It is apparent that if some of these onerous charges could be light- ened, the road might be able to return to a more substantial dividend basis. Through its ownership of a majority of the capital stock of the Boston Railroad Holding Com- pany, which in turn owns a majority of the capital stock of the Boston & Maine Railroad, the New York, New Haven & Hartford Railroad has control of the Boston & Maine System. As a result of the recent traffic agreement entered into with the New York Central & Hudson River Railroad for the use of its Boston & Albany Lines, practically the entire transportation of New England is being handled under one centralized management. Many economies have been found possible in the system's operation — economies which it is claimed will not be at the expense of service. According to the company's report for the fiscal year of 1912 the rehabilitation of the property, the addition to its shop plants, its equipment and sta- tions will require at least two years to complete, and in the meantime the operation of the same is likely to be more or less unsatisfactory to both the management and its patrons. STATISTICS On the following page are given the capitalization, earnings, and traffic statistics of the Boston & Maine RaUroad, based on the average miles operated, for the year 1900 and for the years 1905 to 1912 inclusive. In the following tables, " premiums realized on capital stock " have not been included in the amount of capital stock outstanding per mUe as per balance sheet. Gross earnings include both transportation revenue and revenue from sources other than transportation, such as station privileges, storage, telegraph service, and rents. The net revenue from outside operations has been included in the item of " other income," and where deficits from outside operations have occurred, they have been deducted from " total net income " as a fixed charge. [94] BOSTON & MAINE RAILROAD Fiscal Preferred Common Funded Rentals Gross Owned by Net Average Extra year stock stock debt @5% capital company capital milef operated triick 1900 $1,797 $12,501 $12,514 $36,759 $63,571 $3,498 $60,073 1.752 321 1905 1,377 10,768 13,725 44,301 70,171 4,695 65,476 2.288 522 1906 1,377 10,773 13,689 44,379 70,109 4,606 65,603 2,287 521 1907 1,377 12,182 13,324 44,685 71,568 4,415 67,153 2,288 522 1908 1,404 12,598 13,547 46,226 73,775 4,506 69,269 2,242 560 1909 1,404 12,004 18,756 46,759 79,523 4,503 75,020 2,243 504 1910 1,404 12,859 18,757 46,954 79,974 5,180 74,794 2,243 564 1911 1,404 17,348 19,549 48,016 86,317 3,944 82,373 2,243 570 1912 1,404 17,605 19,.540 46,140 84,689 5,570 . 79,119 2,244 600 Fiscal Gross Maintenance Transportation Net Other Total FLxed Surplus avail year operating and general operating net charges able for revenue Way Equipment $1,710 $3,473 * expense $3,724 revenue $408 income $4,144 dividends 1900 $12,643 $3,736 $3,180 $964 1905 15,827 1,966 1,838 7.830 4,193 256 4,449 3,624 825 1906 17,140 2,354 1,931 8,550 4,311 272 4,583 3,686 897 1907 17,974 2,144 1,882 9,509 4,439 307 4,746 3,611 1,135 1908 17,391 2,121 2,122 8,847 4,301 338 4,639 4,300 339 1909 17,623 ■ 1,894 2,109 8,596 5,024 313 5,337 4,270 1,067 1910 19,330 2,342 2,428 9,201 5,359 352 5,711 4,440 1,271 1911 19.979 2,704 2,786 10,180 4,309 414 4,723 4,565 158 1912 20,495 2,595 2,857 10,185 4,858 445 5,303 4,729 574 Fiscal Divi- Other Surplus Operating Total Conducting Fixed Gross Net Per cent year dends charges expenses mainte- transpor- charges earnings income earned on to n- to gross nance to tation to to gross to gross to net capital stock come earnings gross gross earnmgs capital capital earnings earnings Preferred Common 1900 $863 $101 70.45% 41.1% 29.3% 25.2% 19.8% 6.8% 53.6% 6.8% 1905 790 36 73.51 24.1 49.4 23.0 22.5 6.7 59.8 6.8 1906 802 95 74.85 24.8 50.0 21.5 24.3 7.0 65.1 7.5 1907 862 $215 58 75.30 22.4 52.9 20.0 25.0 7.0 82.2 8.6 1908 929 590 t 75.28 24.5 50.8 24.7 23.5 6.7 23.8 2.0 1909 810 18 239 71.50 22.8 48.7 24.2 22.2 7.1 75.8 7.8 1910 832 59 350 72.27 24.7 47.6 23.0 24.1 7.6 90.7 9.2 1911 873 715 t 78.43 27.5 50.9 22.8 23.1 5.7 11.2 0.4 1912 787 213 t 76.29 26.6 49.6 23.7 24.2 6.6 40.!) 2.7 Fiscal Train Maintenance Conduct ing Train Rale per mile Freight Train Freight Passenger, year mile per revenue transportation mile density load to all freight earnings tram mile per revenue earnings Per Per revenue traffic and (gross) train mile (net) passenger ton tons company $1.66 $ ^ay Equipme 225 $.458 nt cars 1900 $.491 $.492 $.0173 $.0144 475,122 161 54% 13,795 1905 1.81 224 .209 .893 .478 .0175 .0115 810,371 214 60 19,513 1906 1.86 255 .209 .928 .468 .0177 .0116 879,099 214 60 20,484 1907 1.84 220 .193 .975 .455 .0175 .0108 1,003,920 229 61 23,038 1908 1.82 222 .222 .927 .450 .0171 .0104 900,137 237 59 26,740 1909 1.92 206 .229 .936 .546 .0170 .0108 947,347 240 59 27,710 1910 1.99 241 .250 .946 .551 .0169 .0108 1,046,119 247 59 28,020 1911 2.02 273 .281 1.028 .435 .0180 .0109 1,054,412 247 58 29,360 1912 2.15 272 .300 1.069 .509 .0178 .0109 1,096,658 265 58 28,843 * This exceptional figure is explained by the fact that new equipment was charged to this account, also the cost of fitting equipme vith air brakes, etc. t Deficit. [ 95 BOND DESCRIPTIONS Following are descriptions of the bond issues of the Boston & Maine System, together with the bases on which they have sold during the decade ending December 31, 1012. BOSTON & MAINE RAILROAD The total bonded debt outstanding of the Boston & Maine Railroad proper on June 30, 1912, was $43,849,000. $2,776,000 represented the amount secured by a first mortgage on 118.95 miles, making the total outstanding bonded debt secured by mortgage $23,325 per mile. Subject to the above $2,776,000 first mortgage bonds, there are at present outstanding the sum of $41,073,000 of plain bonds, which are unsecured. On the basis of miles owned in fee, the amount of these unsecured bonds outstanding is $58,095. The Massachusetts laws provide, however, that no mortgage issue can be placed on the property of the railroad owned without equally securing the present outstanding unsecured bonds mentioned alx)\e, and although they are not seciu-ed by mortgage, the bonds are strongly rated as investments. 1. Sinking Fund Improvement 4s Dated February 1, 1887 Maturing February 1, 1937 Interest payable May 1 and November 1 at Company's office, Boston. Coupon bonds of $1,000. Listed on the Boston Stock Exchange ■ Outstanding $1,919,000 Sinking fund: l}4% of the bonds outstanding is annually paid in cash to the trustee of the sinking fund, the Boston Safe Deposit & Trust Company, to be invested in approved securities. On June 30, 1912, the amount thus invested in the sinking fund was $1,098,281. These bonds sold in 1906 on a 3.25 basis 1909 4.05 (bid) 1910 4.20 (asked) 1911 4.40 (bid) December, 1912 4.65 (bid) 2. Plain 4s Dated August 1, 1892 Maturing August 1, 1942 Interest payable February 1 and August 1 at Company's office, Boston. Coupon bonds of $1,000. Registered bonds of $;>,0()0. Listed on the Boston Stock Exchange Outstanding $2,500,000 These bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.20 (asked) 1911 4.37 (bid) December, 1912 4.65 3. Plain Gold 4i^s Dated January L 1894 Maturing January 1, 1944 Interest j)ayable January 1 and July 1 at Company's office, Boston. { '()Ui)on bonds of $1 ,000. Registered bonds of $1,000. Listed on the Bo.ston Stock Exchange Outstanding $6,000,000 [ OS 1 These bonds sold in 1902 on a 3.37 basis 1904 3.65 to 3.75 1909 4.15 (bid) 1910 4.27 (bid) 1911 4.40 (bid) December, 1912 4.65 (bid) 4. Plain Gold 3s Dated July 2, 1900 Maturing July 1, 1950 Interest payable January 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Not listed Uutstanding $5,454,000 This issue is secured by a deposit of an e((ual amount jjar value of Fitchburg Railroad Com])any stock — 21% of amount outstanding. These bonds sold in 1910 on a 4.30 to 4.45 basis 1911 4.37 4.45 December, 1912 4.75 (bid) 5. Plain S^s Dated November 1, 1901 Maturing November 1, 1921 Interest payal)lc May 1 and November 1 at Comj)any's office, Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Not listed Outstanding $1,000,000 These bonds were quoted in 1909 on a 4.25 basis (bit!) 1910 4.40 1911 4.50 December, 1912 4.75 6. Plain 33 is Dated January 1, 1903 Maturing January 1, 1923 Interest payable January 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Not listed Outstanding $2,000,000 These bonds were isted on the Boston Stock E.xchange. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 13,700 Security: The above bonds are secured by a first mortgage on the Portsmouth, Great FalLs & Conway Railroad from Jcwett, Me., to North Conway, N. H., 72.86 miles. They are also secured by a first mortgage on all the equipment of the company and future acquisitions. These bonds were ASSUMED by the BOSTON & MAINE RAILROAD in 1890. Property: The Portsmouth, Great Falls & Conway Railroad (now a part of the Boston & Maine Rail- road proper) operates 85.63 miles of track between Conway Junction, Me., and North Con- way, N. II. It was chartered June 30, 1865, as the result of a consolidation between the Great f 100 ] Falls & Conway Railroad and the Great Falls & South Berwick Railroad. The line to Conway was built by the consolidated company and completed June 3, 1872. It was leased in 1871 to the Eastern Railroad of New Hampshire for 60 years, and was leased again from October 1, 1878, for GO years under the Eastern (Massachusetts) Railroad Company. On May 9, 1890, the Portsmouth, Great Falls & Conway Railroad Company, together with the Eastern Railroad Company of Massachusetts, was consolidated with the Boston & INIaine Rail- road. In the consolidation, holders of the Portsmouth, Great Falls & Conway stock received $83.28 in new stock for every $100 turned in, and all bonds of the railroad outstanding were assumed by the Boston & Maine. Those bonds sold in 1902 on a 3.35 to '3A5 basis 1904 3.75 1906 3.87 1909 4.15 (bid) 1910 4.20 (bid) 1911 4.30 (bid) December, 1912 4.60 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. WORCESTER, NASHUA & ROCHESTER RAILROAD First Mortgage 4s Dated («) $150,000 January 1, 190() (b) $735,000 January 1, 1890 (c) $511,000 January 1, 1893 ((/) $380,000 October 1, 1894 Maturing (a) January 1, 1935 (b) January 1, 1930 (c) January 1, 1913 (d) October 1, 1934 Interest payable a, b and c January 1 and July 1 ; d April 1 and October 1, at American Trust Company, Boston. Coupon bonds of $1,000, registerable as to j)rincii)al. Authorized $1,789,000 Outstanding $1,776,000 Per mile . . 37,780 Security: The above bonds are secured by a first mortgage on the Worcester, Nashua & Rochester Railroad Company's line from Worcester, Mass., to Nashua, N. H., 47.0 miles. It is also secured by a first mortgage on the equipment of that line. These bonds were ASSUMED by the BOSTON & MAINE RAILROAD COMPANY under terms of its lease. The Worcester, Nashua & Rochester Railroad was chartered December 1, 1883, under the laws of Massachusetts, as the result of a consolidation of the Worcester & Nashua Railroad Company and the Nashua & Rochester Railroad Company. On January 1, 1886, the company was leased to the Boston & Maine Railroad for fifty years, at an annual rental of $2.50,000. With the approval of the Railroad Commission of Massachusetts, and of a large majority of the .stockholders of both com- panies, the jjurchase of the franchises and property of the Worcester, Nashua & Rochester Railroad by the Boston & Maine Railroad was consummated in June, 1911. [ 101 1 The 4s of 1930 sold in lf)09 on a 4.07 basis 1910 4.07 to 4.22 1911 4.15 4.22 December, 1912 4.55 (bid) The 4s of 1934 sold in 1910 on a 4.07 to 4.20 basis 1911 4.12 4.20 December, 1912 4.50 (bid) These bonds are considered a legal investment for savings banks in Maine, Vermont, Massachusetts, Connecticut and Rhode Island. BOSTON & LOWELL RAILROAD The Boston & Lowell Railroad proper, on June 30, 1912, had under operation a total of 111.27 miles, all unmortgaged, as follows: from Boston to Lowell, 26 miles; Reformatory, Concord, to Lexington, 11 miles; Tewksbury to Peabody, 17 miles; Lowell to Lawrence, 12 miles; and other branches aggregating 45 miles, all in Massachusetts. In April, 1887, the Boston & Lowell Railroad was leased to the Boston & Maine Railroad Com- pany for 99 years, the rental being 7% on the stock for the first ten years and 8% thereafter, INTEREST on the bonds also being GUARANTEED. The total funded debt of the road outstanding is $6,528,000, all of which is unsecured. On a per mile basis the amount of these unsecured bonds outstanding is $58,800. The statutes of INIassachusetts forbid the company from executing any mortgage on its property without equally securing these bonds. 1. Plain 4s Dated April 1, 1892 Maturing April 1, 1932 Interest payable April 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Listed on the Boston Stock Exchange Outstanding $1,000,000 These bonds sold in 1910 on a 3.60 to 4.20 basis 1911 4.10 4.18 December, 1912 4.50 (bid) Listed on the Boston Stock Exchange Outstanding $1,000,000 2. Plain 4s Dated March 1, 1895 Maturing March 1, 1915 Interest payable March 1 and September 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Listed on the Boston Stock Exchange Outstanding $500,000 [ 102 ] These hoiuls sold in 1910 on a 4.22 to 4.40 basis 1911 4.30 4.45 December, 1912 4.45 (bid) 3. Plain 4s Dated July 1, 1896 Maturing July 1, 1916 Interest payable January 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Listed on the Boston Stock Exchange Outstanding $750,000 These bonds sold in 1910 on a 4.20 to 4.35 basis 1911 4.22 4.40 December, 1912 4.50 (bid) 4. Plain 4s Dated October 1, 1897 Maturing October 1, 1917 Interest payable April 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $200,000 5. Plain 4s Dated October 1, 1898 Maturing Octol)er 1, 1918 Interest payable April 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $214,000 These bonds sold in 1910 on a 43^ to i}4 basis 1911 4.20 4.30 December, 1912 4.65 (bid) 6. Plain 332S Dated July 1, 1899 Maturing July 1, 1919 Interest payable January 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $620,000 These bonds were sold in 1909 on a 4.15 basis (bid) 1910 4.25 to 4.30 1911 4.25 43/8 December, 1912 4.45 (bid) [ 103 ] 7. Plain 3>2S Dalcd January 1, 1001 Maturing January 1, VMl Interest payable January 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $310,000 8. Plain Sj^^s Dated May 1, lOO:; Maturing May 1, VJ2'3 Interest payable May 1 and November 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed (Julstanding $250,000 9. Plain Sj^s Dated September 1, 1905 Maturing September 1, 1925 Interest payable March 1 and September 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $500,000 10. Plain 4s Dated November 1, 19(»(i Maturing November 1, 1})2(; Interest payable May 1 and Novemltcr 1 at Company's office, Boston. Coujwn bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $500,000 11. Plain 4s Diiled July 1, 1907 INIaluring July 1, 1927 Interest payable Januarj' 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $325,000 12. Plain 4s Dated April 1, 1909 Maturing Ajn-il 1, 1929 Iiilcrest ])ayable A\ni\ 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal only or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Not listed Outstanding $350,000 1 10 1- 1 13. Refunding 4) ^s Dalctl Fuhruary 1, 11)1:5 iMaUaing Fdjnuiiy 1, 1!)3;5 Interest payable l'VI)ruary I and August 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $25,000. Outstanding $1,000,000 These bonds are considered a legal investment for savings banks in Maine, Massachusetts, Conneelicut and Rhode Island. NEWPORT & RICHFORD RAILROAD First Mortgage 5s Dated January 1, 1911 Maturing January 1, 1941 Interest payable January 1 and July 1 at the Boston Safe Deposit & Trust Company, Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $350,000 Outstanding $350,000 Per mile . . 15,900 Security: The above bonds are secured by a first mortgage on 'J'i miles of the company's road from New- port, Vt., to the Canadian boundary line, via Richford. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Connecticut & Passumpsic Ri\ers Railroad Company. They are GUARANTEED, also, as to INTEREST jointly and severally by the Boston & Lowell Railroad and the Boston & Maine Railroad Companies. 'I'ruslee: Boston Safe Deposit & Trust Company, Boston. Tlic Newport & Richford Railroad Company was incori)oralcd in 1880 under the laws of Ver- mont as the result of a reorganization of the JMissisquoi & Clyde Railroad Company. In June, 1881, it was leased for 99 years to the Montreal & Atlantic Railway Company at an annual rental of $18,000. The entire capital stock of the Newport & Richford Railroad Company is owned by the Connecticut & Passumpsic Rivers Railroad Company, which was leased for 99 years from 1887 to the Boston & Lowell Railroad Company. These bonds were sold in October, 1911, at 1101 and interest They were quoted in December, 1912, on a 4.37 basis (asked) CONCORD & CLAREMONT (N. H.) RAILROAD First Mortgage 432s Dated January, 1904 Maturing January 1, 1914 Interest payable January 1 and July 1 at the First National Bank, Boston. Coupon bonds of $1,000. Authorized $500,000 Outstanding $500,000 Per mile . . 7,000 Security: The above bonds are secured by a first mortgage on the company's line from Concord to Claremont Junction, N. H., and a branch from Contoocook to Hillsboro, totalling 70.9 miles. These bonds are GUARANTEED as to PRINCIPAL and INTEREST jointly and severally by the Boston & Lowell and the Boston & Maine Railroad Companies. The Concord & Claremont Railroad was incorporated, October 31, 1873, under the laws of New Hampshire, as the consolidation of the Merrimac & Connecticut- Rivers, the Sugar River, and the Contoocook River Railroad Companies. The Concord & Claremont Railroad is controlled by the Northern Railroad Company, but has been operated by special agreement since January 1, 1890, by the Boston & Maine Railroad Company, which pays the interest on the above bonds. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Mas- sachusetts. PETERBOROUGH & HILLSBOROUGH RAILROAD First Mortgage Currency 4i^s Dated July 1, 1897 Maturing July 1, 1917 Interest payable January 1 and July 1 at First National Bank, Boston. Coupon bonds of $500. Authorized $100,000 Outstanding $100,000 Per mile . . 5,400 Security: The above bonds are a first mortgage on the Peterborough & Hillsborough Railroad, whose line extends from Peterborough to Hillsborough, N. H., 18.51 miles. They are also a first mortgage on all future acquisitions within the above termini. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Bos- ton & Lowell Railroad and Boston & Maine Railroad JOINTLY and SEVERALLY. All the capital stock of the Peterborough & Hillsborough Railroad is owned by the Northern Railroad. The former was chartered July 7, 1869, under the laws of New Hampshire. Its line was completed July 5, 1878. In 1890 the Northern Railroad was leased to the Boston & Lowell Railroad for 99 years. This lease was assigned to the Boston & Maine Railroad. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Mas- sachusetts. CONNECTICUT & PASSUMPSIC RIVERS RAILROAD First Mortgage 4s Dated April 1, 1893 Maturing April 1, 1943 Interest payable April 1 and October 1 at the Boston Safe Deposit & Trust Company. Boston. C'oupon bonds of $1,000, registerable as to principal. Authorized $1,900,000 Outstanding $1,900,000 Per mile . . 17,300 Security: The above bonds are secured by a first mortgage on the company's line from White River Junction, Vt., to the Canadian boundary Une, 110.3 miles. They are further secured by the leasehold of the Massawippi Valley Railway Company, 35 miles, and equipment; also by a first collateral lien on 4,000 shares of the latter company, which bear no dividends and have no voting rights during the term of the above-mentioned lease. These bonds are GUARANTEED, jointly and severally, as to INTEREST by the Boston & Lowell Railroad and the Boston & Maine Railroad Companies. Trustee: Boston Safe Deposit & Trust Company, Boston. The Connecticut & Passumpsic Rivers Railroad Company was chartered November 10, 1835, under the laws of Vermont. Its line was opened throughout for traffic October 14, 1863. From 1887 (January 1) it was leased to the Boston & Lowell Railroad Company for 99 years, at an annual rental equivalent to interest on the company's bonds, 6% on its capital stock, and $3,000 for organi- zation expenses. The Massawippi Valley Railway was leased for 999 years from July 1, 1S70. thereby continuing this line into Canada to a junction with the (irand Trunk Railway. These bonds were quoted in December, 1912, on a 4.10 basis. These bonds are considered a legal investment for savings banks in Maine, Vermont, Massachusetts, Connecticut and Rhode Island. THE CONCORD & MONTREAL RAILROAD Mortgage Currency 4s Dated June 2, 1890 Maturing June 1, 1920 Interest payable June 1 and I>ecember 1 at Boston Safe Deposit & Trust C'ompany, Boston. Coupon bonds of $1,000, registerable as to i)rincipal. Authorized $5,500,000 Outstanding $5,500,000 Per mile . . 20,220 Listed on the Boston Stock Exchange Security: The above bonds are a first mortgage on 272.08 miles of road, all in New Hampshire, as follows: from Groveton to Nashua, 181.07 miles; Wing Road to Mount Washington, 20.17 miles; branches to Bethlehem and Profile, 12.84 miles; from Hookset, via Suncook, to Concord, 7.59 [ 107 ] miles; from Lakeport to Alton Bay, 17.28 miles; from Belmont Junction to Belmont, 4.17 miles; from Pittsfield to Center Barnsted, 4.46 miles; and from Manchester to Henniker, 24.5 miles. The.se bonds are GUARANTEED as to INTEREST under the terms of lease by the Boston & Maine Railroad. Trustee: Boston Safe Deposit & Trust Company, Boston. The Concord & Montreal Railroad was incorporated September 19, 1889, under the laws of New Hampshire, as a result of a consolidation of the Boston, Concord & Montreal Railroad, and the Concord Railroad Company. The railroads owned, leased and controlled by this railroad are leased to the Boston & Maine Railroad for 91 years from April 1, 1895. The latter company assumes all liabilities of the Concord & Montreal Railroad, and agrees to pay rental dividends of 7% per annum on its capital stock. These bonds sold in 1909 on a 4.10 basis (bid) 1910 4.12 1911 4.35 December, 1912 4.25 (bid) These bonds are considered a legal investment for savings banks in New England. CONCORD & MONTREAL RAILROAD 1. Plain 4s Dated June 1, 1897 Maturing June 1, 1920 Interest payable June 1 and December 1 at the Boston Safe Deposit & Trust Company, Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $650,000 Outstanding $650,000 2. Plain 3^45 Dated December 1, 1899 Maturing Jime 1, 1920 Interest payable June 1 and December 1 at the Boston Safe Dcjiosit & Trust Company, Boston. Coupon bonds of $1,000, registerable as to princijial. Authorized $500,000 Outstanding $400,000 3. Plain 3>^s Dated June 1, 1901 Maturing June 1, 1920 Interest payable June 1 .and December 1 at the Boston Safe De])osit & Trust Company, Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $1,000,000 Outstanding $473,000 Security: The above bonds are a direct obligation of the Concord & Montreal Railroad Company, but are not secured by a mortgage. I 1<»« ] These bonds are GUARANTEED as to INTEREST by the Boston & Maine Raih-oad Com- pany under terms of its lease. These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecti- cut and Rhode Island. CONNECTICUT RIVER RAILROAD COMPANY 1. *Plain 4s 2. Plain 3Hs 3. Plain Sj/^s September 1, 1893 January 1, 1901 January 1, 1903 Maturing lulerest payalile at Boston Oiilslandinj,' September 1, 1943 January 1, 1921 January 1, 1923 March and September January and July January and July $1,000,000 290,000 969,000 Coupon bonds of $1,000. Security: The above bonds are unsecured by mortgage, but are direct obligations of the company. The Statutes of Massachusetts forbid the company froiii executing any mortgage on its proi)erty without equally securing these bonds. GUARANTEED as to INTEREST under the terms of lease by the Boston & Maine Rail- road. Property: The Coimecticut River Railroad operates a total of 80.89 miles as follows: from Springfield, Mass., to Keene, N. H., 74.0 miles; from Chicopee to Chicopee Falls, Mass., 2.35 miles; from Mt. Tom to Easthampton, Mass., 3.5 miles; and from Deerfield to East Deerfield, Mass., 1.04 miles. The Connecticut River Railroad was incorporated February 9, 1890, under tlie laws of Ma.ssa- chu.setts, as the result of a consolidation of the Connecticut River Railroad Company and tlie Asbue- lot Railroad Company. It was leased to the Boston & Maine Railroad for 99 years from January 1, 1893, at an annual rental which covers interest on all outstanding bonds and scrip, 10% on capital stock and $2,000 annually for organization expen,ses. Plain 4s of 1943 were quoted in 1909 on a 4.00 basis (bid) 1910 4.10 1911 4.10 December, 1912 4.37 Plain 31.^3 of 1923 were quoted in 1909 on a 4.12 basis (bid) 1910 4.25 1911 4.25 December, 1912 4.40 (bid) These bonds are considered a legal iu^-estraent for savings banks in Maine, Massachusetts, Connecticut and Rhode Island. FITCHBURG RAILROAD The Fitchburg Railroad proper, which, together with the Vermont and Massachusetts Railroad, is now known as the Fitchburg Division of the Boston & Maine System, has at the present time under operation a total of 394.14 miles, as follows: Boston to Fitch- * Listed on the Boston Stock Exchange. [ 109 ] hxirg, Massachusetts, 49.65 miles; Greenfield, Massachusetts, to Rotterdam Junction, New York, 105.25 miles; South Ashburnham, Massachusetts, to Bellows Falls, Vermont, 53.85 miles; West Cambridge to Waltham, Massachusetts, 6.63 miles; South Acton to Marlborough, Massachu- setts, 12.35 miles; Ayer to Greenville, New Hampshire, 23.64 miles; Sequannacook Junction, Mas- sachusetts, to Milford, New Hampshire, 21.73 miles; Worcester, Massachusetts, to Peterborough, New Hampshire, 51.67 miles; Mechanicsville to Saratoga, New York, 17.5 miles; Troy, New York, to the Massachusetts- Vermont State Line, 40.3 miles; and branches totalling 11.57 miles. Of the total mileage at present operated, 34.74 miles (from Troy, New York, to the New York- Vermont State Line) are subject to first mortgage bonds, and the balance, 359.40 miles, are unmortgaged. The Fitchburg Railroad Company was chartered May 3, 1842, under the laws of Massachu- setts, and has reached its present size as a result of many consolidations. It is leased to the Boston & Maine Railroad for 99 years from July 1, 1900. The lessee agreed to assume all the obligations of the above company and to pay as rental, dividends of 5% per annum on all the preferred stock of the company and 1% on the common stock when owned by the public* The total outstanding bonded debt of the Fitchburg Railroad proper on June 30, 1912, was $24,167,000, the INTEREST on which has been GUARANTEED by the Boston & Maine Railroad. $573,000 represents the amount which is secured by a first mortgage on the above-mentioned 34.74 miles, making the total outstanding bonded debt secured by mortgage $14,220 per mile. Subject to the above $573,000 first mortgage bonds, there are at present outstanding $23,594,000 plain bonds which are unsecured. On a per mile basis the amount of these unsecured bonds outstanding is $59,870, and under the Massachusetts laws no mortgage issue can be placed upon the property of the railroad owned without equally securing the above direct obligations of the company. Below are listed and described the bond issues of the Fitchburg Railroad proper. 1. Plain 41 ^s Dated May 1, 1894 Maturing j\[ay 1, 1914 Interest payable May 1 and November 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to princi])al. Listed on the Boston Stock Exchange Outstanding $500,000 These bonds were quoted in 1909 on a 4.15 basis (bid) 1910 4.50 1911 4.50 July, 1912 4.50 2. Plain 4s Dated March 1, 1895 Maturing March 1, 1915 Interest payable March 1 and September 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal. Listed on the Boston Stock Exchange Outstanding $1,359,000 These bonds sold in 1900 on a 3.75 to 3.87 basis 1907 4.15 1909 4.20 (bid) 1910 4.40 (bid) 1911 4.55 (bid) July, 1912 4.70 (bid) * Kntire coramou stock is lield by the Boston & Maine Hailroad. [ 110 ] 3. Plain 4s Dated July 1, 189G Maturing July 1, 1916 Interest payable January 1 and July 1 at Company's ofEce, Boston. Coupon bonds of $1,000, registerable as to princiiml. Listed on the Boston Stock Exchange Outstanding $500,000 These bonds sold in 1910 on a 4.20 to 4.55 basis 1911 4.45 December, 1912 4.50 (bid) 4. Plain 4s Dated June 1, 1890 Maturing June 1, 1920 Interest payable June 1 and December 1 at Company's ofBce, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $10,000 and $50,000. Listed on the Boston Stock Exchange Outstanding $500,000 5. Plain 33^s Dated October 1, 1900 Maturing October 1, 1920 Interest payable April 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $1,000, $5,000 and $10,000. Not listed Outstanding $500,000 These bonds sold in 1907 on a 4.10 basis 1909 4.10 + 1910 41^ 1911 iVs December, 1912 4.45 (bid) 6. Plain Sj^^s Dated October 1, 1901 Maturing October 1, 1921 Interest payable April 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $5,000, $10,000 and $50,000. These are not listed Outstaudmg $1,775,000 These bonds sold in 1910 on a 4.15 to 4.50 basis 1911 4.55 December, 1912 4.37 (bid) 7. Plain 4s Dated May 1, 1905 Maturing May 1, 1925 Interest payable May 1 and November 1 at Company's office, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $5,000, $10,000 and $50,000. Not listed Outstanding $3,660,000 [ 111 ] These bonds sold in 1910 on a 4.07 to 4.25 basis 1911 4.20 4.25 December, 1912 4.40 (bid) 8. Plain 4s Dated March 1, 1897 Maturing March 1. 1927 Interest payable March 1 and September 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal. Listed on the Boston Stock Exchange Outstanding $2,750,000 These bonds sold in 1907 on a 4.00 basis 1908 4.35 1909 4.07 (bid) 1910 4.20 (bid) 1911 4.15 (bid) December, 1912 4.37 (bid) 9. Plain 4s Dated April 1, 1907 Maturing April 1, 1927 Interest payable April 1 and October 1 at Company's office, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $5,000, $10,000 and $50,000. Not listed Outstanding $2,000,000 10. Plain 4s Dated January 1, 1898 Maturing January 1, 1928 Interest payable January 1 and July 1 at Company's office, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $5,000, $10,000 and $50,000. Listed on the Boston Stock Exchange Outstanding $1,450,000 These bonds sold in 1910 on a 4.07 to 4.25 basis 1911 4.15 4.20 December, 1912 4.35 (bid) 11. Plain 4j4s Dated May 1, 1908 Maturing May 1, 1928 Interest payable May 1 and November 1 at Treasurer's office, Boston. Coupon bonds of $1,000, Registerable as to princijial or fully registerable in lots of $5,000, $10,000 and $50,000. Not listed Outstanding $2,400,000 These bonds sold in 1910 on a 4.15 to 4.40 basis 1911 4.22 4.25 July, 1912 4.55 (bid) [ 112] 12. Plain 4V^s Dated January 1, 1912 JNIatiiring January 1. 1032 Interest payable January 1 and July 1 at Treasurer's office, Boston. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Authorized $1,200,000 Outstanding $1,200,000 13. Plain 4Ks Dated January 1, 1013 Maturing January 1, 1933 Interest payable January 1 and July 1 at Treasurer's office, Boston. Coupon bonds of $6,000, Registerable as to principal or fully registerable in lots of $5,000, $10,000 and $50,000. Outstanding $400,000 These bonds were offered in January, 1913, on a 4.40 basis. 14. Plain 4s Dated February 1, 1887 Maturing February 1, 1937 Interest payable February 1 and August 1 at Treasurer's office, Boston. Coupon bonds of $1,000, Registerable as to principal or fully registerable in lots of $5,000, $10,000 and $50,000. Outstanding $5,000,000. The bonds of the Fitchburg Railroad are considered a legal investment for savings banks in Maine, Massachusetts and Connecticut. TROY & BOSTON RAILROAD First Mortgage Currency 7s Dated July 1, 1874 Maturing July 1, 1924 Interest payable January 1 and July 1 at Fitchburg Railroad Company's office, Boston. Coupon bonds of $1,000, $5,000 and $10,000. Registered bonds of $1,000, $5,000 and $10,000. Authorized $1,500,000 Outstanding $573,000 Per mile . . 14,200 Security: The above bonds are a first mortgage on the Troy & Boston Railroad line from Troy, N. Y., to the New York- Vermont state line, 34.74 miles, and equipment. They arc also secured by a one-quarter interest in the Troy Union Railroad, Troy, N. Y., 1.87 miles. These bonds are GUARANTEED as to INTEREST under the terms of lease by the Boston & Maine Railroad. [ 113] The Troy & Boston Railroad Company was chartered November 22, 1849, and completed on March 10, 1852. On May 3, 1887, it was consolidated with the Fitchburg Railroad Company and is now subject, with the latter, to the lease by the Boston & Maine Railroad. These bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.40 1911 4.25 December, 1912 4 12 These bonds are considered a legal investment for savings banks in Maine, Massachusetts, Connecticut and Rhode Island. MANCHESTER & LAWRENCE RAILROAD Plain 4s Dated January 1, 1892 Maturing January 1, 1922 Interest payable January 1 and July 1 at the office of the Treasurer of the Boston & Maine Railroad Company. Coupon bonds of $1,000, registerable as to principal. Authorized $300,000 Outstanding $274,000 Security: The above bonds are a direct obligation of tlie Manchester & Lawrence Railroad Corajiany, but are not secured by a mortgage. These bonds are GUARANTEED as to INTEREST by the Boston & Maine Railroad Com- pany, by endorsement. The Manchester & Lawrence Railroad Company was chartered under the laws of New Hamp- shire, June 30, 1847. Its line was opened for traffic November 13, 1849. It was leased to the Boston & Maine Railroad Company, September 1, 1887, for fifty years at an annual rental ecpiivalent to 10% on the company's capital stock, interest on its funded obligations, and $2,000 for organization expenses. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. VERMONT & MASSACHUSETTS RAILROAD Plain Currency 33^s Dated May 1, 190.S Maturing May 1, 1923 Interest payable May 1 and November 1 at Fitcliliurg Railroad Comjiany'.s office, Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Outstanding $772,000 Security: The above bonds are unsecured by mortgage, but are direct obligations of the companj'. [ 114] These bonds are GUARANTEED as to PRINCIPAL and INTEREST under terms of lease by the Fitchburg Railroad Company. THIS GUARANTEE was ASSUMED by the Boston & Maine Railroad Company under the terms of its lease. Property: The property of this company consists of 58.58 miles of road from Fitchburg to Greenfield, Mass., and branches. The Vermont & Massachusetts Railroad was chartei-ed May 15, 1844, under the laws of Massa- chusetts, as the result of a consolidation of the Vermont & Massachusetts Railroad Company and the Brattleboro & Fitchburg Railroad Company. The road was commercially opened April 15, 1849. On the first of January, 1874, it was leased for a term of 999 years to the Fitchburg Railroad Com- pany, which guaranteed interest on all the company's outstanding bonds and, as rental, 6% on the capital stock and $3,000 for organization expenses. It is now subject, with the Fitchburg Railroad, to a lease by the Boston & Maine Railroad until 1999. These bonds are considered a legal investment for savings banks in Maine and Massachusetts. ST. JOHNSBURY & LAKE CHAMPLAIN RAILROAD First Mortgage 5s Dated March 1, 1894 Maturing March 1, 1944 Interest payable March 1 and September 1 at Company's office, Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $2,500,000 Outstanding $1,328,000 Per mile . . 10,600 Provisions of Of the total amount authorized, $1,328,000 are outstanding as above, $740,000 are in the issue: treasury of the Boston & Lowell Railroad Company, and $432,000 are in the treasury of the Boston & Maine Railroad Company. Security: The above bonds are a first mortgage on the St. Johnsbury & Lake Champlain Railroad Com- pany's line from Lunenburg to Swanton, Vt., 120 miles; and Victory Branch, North Concord, to Victory, Vt., 5.43 miles, making a total of 125.43 miles subject to the above mortgage. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Boston & Maine Railroad Company. Trustee: American Trust Company, Boston. The St. Johnsbury & Lake Champlain Railroad Company was chartered on January 31, 1880, under the laws of Vermont, as the result of the reorganization of the Vermont Division of the Port- land & Ogdensburg Railroad Company. A majority of its capital stock is now owned by the Boston & Lowell Railroad, which is leased to the Boston & Maine Railroad until 1999. These bonds sold in 1910 on a 3.90 to 4.22 basis 1911 4.30 to 4.70 December, 1912 4.80 (bid) These bonds are considered a legal investment for savings banks in Maine, Vermont, Massachusetts and New Hampshire. [ 115 ] VERMONT VALLEY RAILROAD First Mortgage Gold 43^s Dated October 1, 1910 Maturing October 1, 1940 Interest payable April 1 and October 1 at office of the Boston Safe Deposit & Trust Company, Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Authorized $1,500,000 Outstanding $1,500,000 Security: The above bonds are a first mortgage on the Vermont Valley Railroad Company's line from Brattleboro to Sullivan River Bridge, in Bellows Falls, Vt., 24 miles. They are further secured by a deposit with trustee of $700,000 Connecticut & Passumpsic River Railroad Company stock and $100,000 Massawippi Valley Railway Company stock (upon which 6% dividends are guaranteed by the Boston & Maine Railroad). Trustee: The Boston Safe Deposit & Trust Company, Boston. The Vermont Valley Railroad Company was chartered November 8, 1848, under the laws of Vermont. The road was commercially opened in 1851. It is controlled by the Connecticut Ri\er Railroad Company, through ownership of practically the entire capital stock. The Connecticut River Railroad Company, in turn, is leased to the Boston & Maine Railroad until 1992. The Ver- mont Valley Railroad is operated by the Boston & Maine Railroad as agent. These bonds were quoted in 1912 on a 4.35 basis (bid) These bonds are considered a legal investment for savings banks in Maine, Massachusetts and Con- necticut. SULLIVAN COUNTY RAILROAD First Mortgage Gold 4s Dated March 31, 1894 Maturing April 1, 1924 Interest payable April 1 and October 1 at office of the Boston Safe Deposit & Trust Company, Boston. Coupon bonds of $1,000, registerable. Registered bonds of $1,000. Authorized $400,000 Outstanding $357,000 Per mile . . 13,740 Security: The above bonds are secured by a first mortgage on the Sullivan County Railroad Company's line from Bellows Falls to AVindsor, Vt., 26 miles. They are also secured by all the equipment of the line and future acquisitions. Trustee: The Boston Safe Deposit & Trust Company, Boston. Tlie Sullivan County Railroad was chartered July 10. 184G, under the laws of New Hampshire. It was connnercially opened February 5, 1849. The entire capital stock of the company is owned [ 116 ] by the Vermont Valley Railroad, while the Connecticut River Railroad Conijjany, which is leased to the Boston & INIaine Railroad until 1992, owns practically the entire stock of tlie Vermont Valley Railroad. The Sullivan County Railroad is operated by the Boston & Maine Railroad as agent. These bonds are considered a legal iavcstment for savings bauks in Maine, Massachusetts and Con- necticut. BOSTON & MAINE RAILROAD One-Year 4*^^, Notes Dated June 10, 1912 Maturing June 10, 1013 Interest payable December 10 and June 10 at Boston. Coupon notes of $1,000, $5,000, $10,000, $•25,000 and $50,000. Authorized $12,000,000 Outstanding $12,000,000 Security: These notes are a direct obligation of the Boston & Maine Railroad Company, but are not secured by a mortgage. These notes were issued to retire $5,000,000 4% notes, maturing June 15, 1912; to reimburse the New York, New Haven & Hartford Railroad Company for advances of $3,000,000, and $4,000,000 for further extensions to property. These notes were offered in June, 1912, at 99J^| and interest. [ 117 ] BOSTON, REVERE BEACH & LYNN RAILROAD COMPANY BOSTON, REVERE BEACH & LYNN RAILROAD COMPANY HISTORY The Boston, Revere Beach & Lynn Raih-oad was incorporated May 23, 1874, under the Laws of Massachusetts. Its road was opened from East Boston to Lynn, July 29, 1875. In July, 1891, the company absorbed the Boston, Winthrop & Shore Railroad Company, owning a line from East Boston to Winthrop, Massachusetts. PROPERTY The company operates a narrow gauge railroad from East Boston to Lynn and a branch to Win- throp. Connecting Boston proper with its terminal in East Boston, is a line of ferries owned and operated by the company. The company's mileage, operated June 30, 1912, consisted of 13.2 miles of main line, all of which is double tracked. The company's equipment, as of June 30, 1912, included the following pieces: Passenger locomotives 23 Passenger cars 75 Combination cars 17 Company cars 28 Total equipment owned .... 143 Besides the above, the company operated four ferries hi its steamboat service. CAPITALIZATION The company's capitalization at the close of its fiscal year, June 30, 1912, was as follows: Capital stock $850,000 Funded debt 850,000 Gross capitalization $1,700,000 Capital per mile operated .... $128,788 Average miles operated 13.2 Net income to net capital .... 7.1% Fixed charges to net income . . . 57.7% Margin of safety 42.3% The company's authorized capital slock is $1,125,000, of which $850,000, or $64,394 per mile of line, is outstanding. The authorized funded debt of the company amounts to $1,000,000, $850,000 of which is outstanding, or $64,394 per mile of line. [ 121 ] To offset tliese capital liabilities, the company reports a road and equipment account, as of June 30, 1912, of $2,076,697. This represents a cost per mile of line of $157,424. This leaves an equity in the property, over and above all capital obligations, of nearly $27,640 per mile. The ratio of net income to net capital was remarkably steady during the five years ending 1912, averaging for the period 7.1%. The company's fixed charges consumed 57.7% of its total net income, leaving a margin of safety for the interest on its bonds of 42.3% — a very satisfactory show- ing, especially since the average for the decade was in the neighborhood of 40%. CHARACTER OF TRAFFIC The company's traffic is almost entirely passenger. Its business is especially heavy during the summer months, caring as it does tor the summer resorts that dot the coast between Boston and Lynn, especially the two popular beaches at Revere and Winthrop, Massachusetts. It will be noted in the following table that the company's passenger density, and, correspond- ingly, passenger earnings, show material increases since 1907. Year Passenger Average distance Passenger Average rate per density carried per passenger earnings passenger per mile 1907 5,840,101 5.86 miles $799,561 $.0104 1908 6,014,184 5.48 812,967 .0102 1909 6,289,462 4.93 841.988 .0100 1910 6,372,580 4.80 865,940 .0103 1911 6,618,194 4.81 898,627 .0103 1912 6,853,795 4.81 930,059 .0103 EARNINGS With the exception of nominal amounts received as rentals of property and for miscellaneous items, the company's gross earnings depend entirely on the passenger traffic. Both gross and net earnings show substantial increases, the former gaining 16.2% and the latter 15.1% in the six years ending June 30, 1912. Year Miles Gross Per mile Net Per mile Operating operated earnings earnings ratio 1907 . 13.2 $819,072 $62,051 $105,581 $7,999 89.23% 1908 . 13.2 834,020 63,183 123,415 9,350 87.43 1909 . 13.2 863,475 65,415 121,533 9,207 85.92 1910 . 13.2 887,888 67,264 119,950 9,088 86.49 1911 . 13.2 919,920 69,690 122,502 9,280 86.68 1912 . 13.2 951,891 72,113 121,848 9,231 87.10 The company reports a rather high operating ratio. The reason for this, it would seem, lies in the cost of conducting transportation. During the winter months trains are run at a loss — a lim- ited number of commuters using them. They have to be maintained, however, the loss being offset by the large profits of the summer months. Following are the ratios of expense to earnings for the six years ending June 30, 1912. [ 122 ] 1907 1908 1909 1910 1911 1912 Maintenance to gross earnings 27.4% Conducting transportation to gross earnings 01.8% 62.1 59.2 59.4 62.3 63.5 Total expenses to gross earnings 89.2% 87.4 . 25.3 27.3 85.9 27.1 86.5 . 24.4 86.7 . 24.6 87.1 MAINTENANCE During the six years ending 1912 the company spent out of its total gross earnings of $5,267,000, $1,339,000 for maintenance of way and equipment, an average of $223,170 per year, or $16,906 annually per mile of road operated. Below are given the amounts spent for upkeep, also figured on a per mile basis, for the years 1907 to 1912 inclusive: Year Maintenance Way Equipment 1907 $92,507 $115,302 1908 85,407 107,050 1909 132,735 97,851 1910 128,286 111,466 1911 146,232 77,487 1912 92,851 131,750 Total Per mile maintenance $217,809 $15,743 192,452 14,580 230,586 17,469 239,752 18,162 223,719 16,948 224,601 17,015 ADDITIONS AND BETTERMENTS Under the ruling of the Interstate Commerce Commission, and one which applies under the rulings of the Board of Railroad Commissioners of Massachusetts, the Boston, Revere Beach & Lynn Railroad reports on its balance sheet of June 30, 1912, $43,156 spent for additions and betterments to property since June 30, 1907. This is divided as follows: Year Amount 1908 . . $100 1909 . . 12,114 1910 . . 16,137 1911 . . 11,474 1912 . . 3,331 $43,156 [ 123 DIVIDENDS Since 1900 dividends have been paid as follows: Year Rate 1900-05 .... 2% 1906 4 1907 5 1908-12 .... 6 The company's surplus stood on its balance sheet of June 30, 1912, at $70,089. This is equiva- lent to 8.2% of the company's outstanding capital stock. STATISTICS Following are the capitalization, earnings and traffic statistics of the Boston, Revere Beach & Lynn Railroad, based on the average miles operated, for the years 1905 to 1912 inclusive. [ 124 BOSTON, REVERE BEACH & LYNN RAILROAD Fiscal Capital Funded Gross Average Extra main year stock debt capital miles operated 13.2 track 1905 $64,394 $64,394 $ 128,788 13.2 1906 64,394 64,394 128,788 13.2 13.2 1907 64,394 64,394 128,788 13.2 13.2 1908 64,394 64,394 128,788 13.2 13.2 1909 64,394 64,394 128,788 13.2 13.2 1910 64,394 64,394 128,788 13.2 13.2 1911 64,394 04,394 128,788 13.2 13.2 1912 64,394 64,394 128,788 13.2 13.2 Fiscal Gross operating Main cnance Transportation Net Fixed Surplus avail- year revenue and general operating charges able for Way $5,397 Equipment expense revenue $4,574 1905 $49,590 $9,084 $29,166 $5,943 $1,369 1906 56,637 4.716 11,204 33,352 7,365 4,711 2,654 1907 62,051 7,008 8,735 38,309 7,999 4,682 3,317 1908 63,183 6.470 8.110 39,253 9,350 5.404 3,946 1909 65,415 10,056 7,413 38,739 9,207 5,204 3,943 1910 67,264 9,718 8,444 40,014 9,088 5,120 3.968 1911 69,690 11,078 5,870 43,462 9.280 5,271 4,009 1912 72,113 7,034 9,981 45,867 9,231 5.300 3,931 Fiscal Dividends Surplus Operating Total Conducting Fixed Gross earn- Net in- Per cent year expense maintenance transporta- charges ings to come earned on to gross to gross tion to gross to gross gross to net capital $81 carnmgs eammgs earnings earnings capital 38.5% capital 4.6% stock 1905 $1,288 90.56% 31.8% 58.8% 9.2% 2.1% 1906 2,576 78 90.38 31.5 58.9 8.3 43.9 5.7 4.1 1907 3,220 97 89.23 27.4 61.8 7.5 48.1 6.2 5.1 1908 3,863 83 87.43 25.3 62.1 8.5 48.9 7.2 6.1 1909 3,863 80 85.92 26.7 59.2 8.0 50.7 7.1 6.1 1910 3,863 105 80.49 27.1 59.4 7.6 52.2 7.0 6.2 1911 3,863 140 86.68 24.4 62.3 7.5 54.0 7.2 6.2 1912 3,863 68 87.10 24.6 63.5 7.3 56.0 7.1 6.1 Fiscal Train Maintenance Conducting Train Rate per Passenger Passenger year mile earnings per revenue train transportation mile mile per density and (gross) Way $.100 mile Equipment $.168 per revenue earnings (net) passenger company cars 1905 $.8934 $.541 $.086 $.0105 4,607,367 97 1906 .9146 .078 .185 551 .100 .0103 5,352,896 108 1907 .8683 .100 .125 549 .094 .0104 5,840,101 116 1908 .9354 .098 .123 596 .118 .0102 6,014,184 114 1909 .9622 .151 .112 584 .115 .0100 6,289,462 114 1910 .9372 .137 .120 571 .109 .0103 6,372.580 110 1911 .9904 .157 .083 607 .143 .0103 6,618,194 120 1912 1.0072 .098 .1.39 640 .130 .0103 6,853,795 120 [ 125 ] BOND DESCRIPTION Following is a description of the funded debt of the Boston, Revere Beach & Lvnn Railroad: BOSTON, REVERE BEACH & LYNN RAILROAD First Mortgage 43/2S Dated July 15, 1897 Maturing July 15, 1927 Interest payable January 15 and July 15 at State Street Trust Company, Boston. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000. Coupon and registered bonds interchangeable. Authorized $1,000,000 Outstanding $850,000 Per mile. . 64,394 Provisions of Besides the bonds outstanding as above, $150,000 have been reserved for betterments and issue: improvements, with restrictions. Security: The above bonds are secured by a first mortgage on the entire property of the company. Trustee: State Street Trust Company, Boston. These bonds were quoted in December, 1912, on a 4.62 basis (bid). They are considered a legal investment for savings banks in Massachusetts. [ 1^28 ] CENTRAL RAILROAD COMPANY OF NEW JERSEY CENTRAL RAILROAD COMPANY OF NEW JERSEY The Central Railroad of New Jersey is not an independent road, but in reality simply the east- ern division and the New York terminus of the Reading System. In the annual report of the Read- ing Company for the fiscal year ending June 30, 1911, the company owned 145,040 of the 274,380 shares of stock outstanding of the Central Railroad Company of New Jersey. This control was ac- ciuired in 1901, the Reading Company paying $160 per share. The road is operated in so close association with the parent companj' as to make it to all intents a part of the larger system. HISTORY The Central Railroad Company was chartered, February 22, 1849, under the laws of the State of New Jersey, as the result of the consolidation of the Elizabeth & Somerville Railroad Company and the Somerville & Easton Railroad Company. The road was opened to Philipsburg, New Jersey, on the second of July, 1852, and was extended to Jersey City, New Jersey, in 1864. The branch from Elizabeth to Newark was opened in 1872. On subsequent dates the company absorbed the Newark & New York Railroad Company, the Perth Amboy & Elizabeth Railroad Company, the Constable's Hook Railroad Company, the Manufacturers" Railroad Company, the South Branch Railroad Company, the High Bridge Railroad Company, the Longwood Valley Railroad Company, and the Lake Hopatcong Railroad Company. The Central Railroad Company of New Jerse.\' also controls and operates jointly with the Pennsylvania Railroad, by lease, the New York & Long Brancli Railroad Company. It controls, through ownership of a majority of its capital stock, the Lehigh & Wilkes-Barre Coal Company. In December, 1905, the Central Railroad Company of New Jersey acquired the entire fleet of the Manliattan Lighterage & Transportation Company, consisting of thirty-four barges, one steam lighter, and three tugs, and also purchased from the Harbor Transportation Company a fleet of eight lighters. To operate this combinetl fleet, the :Manhattan Lighterage Company was organized, all the capital stock being held by the Central Railroad Company. To control certain terminal storage facilities in Newark, New Jersey, the Newark Warehouse Company was organized and has erected a warehouse six stories high to care for freight traffic and to be used for storage purposes. PROPERTY On June 30, 1912, the company operated a total of 669.43 miles of road. 156.15 miles are owned in fee, 224.50 miles represent the mileage of companies controlled by stock ownership, 214.6 miles are controlled by leases and 36.14 miles by trackage rights. The trackage of the New York & Long Branch Railroad Company has been operated separately, under an agreement between the Central Railroad Company and the Pennsylvania Company until the fiscal year 1912. The most important part of this road extends from Jersey City through eastern Pennsylvania to Scranton, in the heart of the anthracite coal region. Another important division extends .south- [ 131 ] ward, centrally through New Jersey, to a double terminal on Delaware Bay. About 40% of the road is double tracked. nient is reported : he company tor the nscal year en dnig June Locomotives . . 490 Cars Passenger 657 Freight . . . 22,015 Company 758 Total 23,430 Leased equipment 10 Marine equipment Steamboats . 3 Ferry boats . 9 Tug boats 12 Car floats 28 Coal barges . 15 Total 67 Total equipment 23,997 CAPITALIZATION The capital account of the Central Railroad of New Jersey at the close of business June 30, 1912, stood as follows: Capital stock $27,436,800 Funded debt 47,848,000 Nominal capital $75,284,800 Rentals capitalized @ 5% 51,611,460 Gross capitalization $126,896,260 Securities owned 14,006,222 Net capitalization $112,890,038 Net capital per mile operated $168,745 Average miles operated 669.43 Net income to net capital 11.3% Fixed charges to net income 52.8% Margin of safety 47.2% From the foregoing it would seem that the company's net capitalization per mile of road operated was very high. The average of this figure for the decade ending 1912 is practically the same and com- pares with two properties situated in similar territory, and working under somewhat similar trans- portation conditions, as follows : Lackawanna $149,892 Lehigh Valley • 70,376 However, when the capitalization figures are compared with the earning capacities of the roads in question, it appears that the Central Railroad carried its capitalization with great ease. During [ 132 ] the ten years ending June 30, 1912, the net income on this heavy net capital has averaged 10.8%, which demonstrates the stable earning capacity of this system. For the same period the Lehigh Valley earned 13.6% on a capitalization nearly $100,000 per mile less than that of the Central Railroad. The Lackawanna with earnings of 15.8% on its average net capitalization of slightly vmder $150,000 per mile, was the only system whose showing is to be compared with that of the "Jersey Central," as it is familiarly known. It is also important to note, in the case of the Central Railroad, that, although over three quarters of its capitalization is represented by forms of indebtedness which are fixed charges upon the system, the high earnings reported in the past have enabled the company to increase its net corporate income to an amount equivalent to nearly twice these fixed charges, thereby leaving a large margin of safety in earnings for the interest on the company's bond issues. It is of interest to note, top, that since 1900 there has been but a slight increase in capitalization, while earnings have shown a remarkable growth, as will be seen by the following table: Year Stock Funded debt Total Gross earnings 1901 $27,411,800 $46,505,000 $73,916,800 $15,286,708 1912 27,436,800 47,848,000 75,284,800 25,890,094 Capital increase $1,368,000 Per cent, increase 2% Gross earnings increase $10,603,386 Per cent, increase 69% CHARACTER OF TRAFFIC The reports of the Central Railroad of New Jersey are in many respects incomplete and unsatis- factory. The reports of traffic statistics, especially, are exceedingly meagre. No table of tonnage transported is furnished, but the road is known to depend to a large degree upon the transportation of hard coal. It taps the great hard coal region of Pennsylvania and is said to own about 17% of all the unexhausted anthracite deposits of that state. It has been estimated that the company controls 1,214,500,000 tons of minable coal. Of it, it has been said, " At the present rate of production, these deposits promise to supply traffic for the Jersey Central for nearly two and one half centuries." During the last decade the ratio of freight to all traffic has averaged 77%. This figure has declined since 1905 from 80% to 73%. About one-half of this freight business is represented by the one item of coal transportation. In fact, the proportion of coal to the entire traffic of the road was 37% during that time. Tabulated below are the ratios of commodities carried to total amount of business done for the six years ending June 30, 1912. 19H 1911 1910 1909 1908 1907 Merchandise . . . 41.9% 40.6% 42.0% 38.1% 37.0% 40.7% Anthracite . . . 31.6 34.9 33.7 37.0 40.2 37.4 Passenger . . . 21.1 19.2 18.9 19.2 18.9 18.6 Other 5.4 5.3 5.4 5.7 3.9 3.3 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% [ 133 ] EARNINGS Following are the gross and net earnings of the road, also figured on the average miles operated, for the fiscal years ending June 30, 1907 to 1912 inclusive. This table has been compiled from the annual reports of the company. Year .\verage mile s Gross Per mUe Net Per mile Operating operated earnings earnings ratio 1907 . . 610 .$22,772,568 $37,332 $10,913,626 $17,891 52.1% 1908 , . 610 22,614,936 37,073 9,453,257 15,497 58.2 1909 . . 610 22,068,279 36,178 9,507,761 15,587 56.9 1910 . . 631 23,851,511 37,800 10,583,028 16,772 55.6 1911 . . 634 24,799,235 39,115 10,600.239 16.719 57.2 1912 . 669 25,890,094 38,699 10,533,014 15,744 59.3 As was the case witli mo.st of the railroads of the country, 1907 proved a banner earning year for the Jersey Central. The gross earnings of that year, with no increase in average miles operated, were the largest ever reported by the company and greater by $2,200,000 than those reported for the fiscal year of 1906. That this splendid record was maintained through the relatively poorer years of 1908 and 1909 was quite remarkable. To be sure, the operating ratios for those two years rose con- siderably, but this was due, not to increased cost of conducting transportation, but to large increases in charges to upkeep, both of equipment and way. Gross earnings in 1910 increased over $1,000,000 over the high figures of 1907, with but a twenty- mile increase in miles operated, and during the fiscal year of 1911 gross earnings rose nearly $1,000,000, with but a three-mile increase in miles operated. The ratio of expenses to earnings has increased since 1910, due to an increase in costs of conducting transportation. The 1912 figures include the mileage and earnings of the New York & Long Branch Railroad Company. MAINTENANCE During the last six years the Jersey Central has been sjjending, for maintenance of way and equipment, an amount equivalent to over $9,360 per mile. Below are given the amounts spent, figured on the basis of miles operated, for the years 1907 to 1912 inclusive; also the average amount spent during the period in question and a comparison of this latter figure with the same relative figures of the Delaware, Lackawanna & Western and Lehigh Valley Railroads: Maintenance Year Way Equipment Total 1907 $3,145 $4,517 $7,662 1908 3,970 5,960 9,930 1909 3,535 6,027 9,562 1910 3,343 6,115 9,458 1911 3,941 5,888 9,829 1912 3,984 5,726 9,710 Average for period Central $3,654 $5,706 $9,360 Lackawanna* 4,920 6,029 10,949 Lehigh Valley * 2,365 4,162 6,527 * 1907-1911. [ 134 ] ADDITIONS AND BETTERMENTS In addition to generous sums spent for maintenance, the Central Railroad Company has pro- vided large sums out of surplus for additions and betterments. In each of the years 1908 and 1909, $^2,000,000 was set aside from income for this purpose; in 1910, $1.,000,000; in 1911, $3,000,000, and for the fiscal year ending June 30, 1912, $2,000,000. The annual reports of the company show the following exi)enditures made and charged against this Addition and Betterment Fund since 1907: Year Amount 1908 $1,023,692 1909 338,215 1910 3,615,179 1911 2,588,505 1912 3,611,557 Total $11,177,148 DIVIDENDS Since 1890 the company has earned and paid the following dividends: Year Rate Year Rate 1890 6% 1899 i}4 1891 Q^4 1900 5 1892-4 7 1901 534 1895-6 5 1902-9 8 1897-8 1 1910-12 12* On the general balance sheet of the company for the fiscal year ending June 30, 1911, the Profit and Loss Account, which represents surplus earnings of past years, stood at $13,969,878, or 50% of the total amount of capital stock outstanding at that time. In connection with the Reading con- trol of this remarkable anthracite road, it is interesting to note just how profitable it has proved to its owner and approximately how it has handled its surplus earnings. It was in 1901 that the Reading l)ought its control, which represents 53% of the total stock outstanding, and paid in the neighborhood of $160 a share or about $23,200,000. Since that time, and including 1912, with earnings of over 21%, the Jersey Central produced the following surplus earnings over and above all charges: Year Surplus 1902 . . . . . . $3,051,868 1903 . . . . . . 2,134,796 1904 . . . . . . 4,326,203 1905 . . . . . . 5,032,405 1906 . . . . . . 5,659,705 1907 . . . . . . 5,782,879 1908 . . . . . . 5,123,473 1909 . . . . . . 4,537,988 1910 . . . . . . 9,103,899t 1911 . . . . . . 7,148,101 1912 . . . . . . 6,009,072 Total. . . . . . $57,910,388 * Includes au extra -ISc annuallv |)aid from dividends received from the Lehigh and Wilkes-Barre Coal Compan t Includes the pro6t on Lehigh'Valley Stock estimated at $1,840,000. [ 135 ] This accuiniilation of surplus is equivalent to 211% of the capital stock of the company out- standing. The Jersey Central paid, to June 30, 1912, just 100% in dividends since the Reading bought control. A balance of $30,473,588, therefore, or the equivalent of 111%, has gone back into the property. The Reading Company has, indeed, every reason to be satisfied with its investment. STATISTICS Following are given ca])italization, earnings, and traffic statistics of the Central Railroad of New Jersey, based on the average miles operated, for the year 1900 and for the years 1905 to 1912 inclusive. In the following table, the mileage and earnings of the New York & Long Branch Railroad are included in 1912. Prior to that, its net earnings were included in "Other Income." [ 136 ] CENTRAL RAILROAD OF NEW JERSEY Fiscal Comnior Funded Re ntals Gross Owned by Net Average Extra main year stock debt @5% capital cc $177,566 $ mpany capital $136,326 miles 642 track 1900 $42,390 $72,564 $62,612 41,270 289 1905 45,557 83,656 83,997 213, no 36,193 177,017 602 296 1900 44,970 83,500 78,242 206,712 38,247 168,465 610 296 1907 44,978 88,951 90,662 224,591 41,857 182,734 610 296 1908 44,978 86,641 76,809 208,428 40.899 167,529 610 296 1909 44,978 84,379 81,804 211,161 33,702 177,459 610 296 1910 43,481 79,664 68,694 191.839 21,996 169,843 631 296 1911 43,275 77,378 79,848 200,501 22,039 178,462 634 296 1912 41,012 71,522 77,147 189,681 20,936 168,745 669 334 Fiscal Gross Maintenance Transporta- Net Other Total Fixed Surplus year operating tion and operating income net charges available revenue Way Equipment general revenue income for expense dividends 1900 $23,566 $2,059 $2,705 $9,378 $9,424 $2,087 $11,511 $7,431 $4,080 1905 31,991 2.818 3.754 9,999 15,420 2,601 18,021 9,662 8,359 1906 33,646 2,850 4.219 10,402 16,175 2,634 18,809 9,529 9,280 1907 37,332 3,145 4,517 11,779 17,891 2,927 20.818 11,338 9,480 1908 37,073 3.970 5 960 11,646 15,497 3,442 18,939 10,540 8,399 1909 36,178 3,535 6,027 11,029 15,587 2,340 17,927 10,488 7,439 1910 37,800 3,343 6.115 11.570 16,772 7.452* 24,224 9,798 14,426 1911 39,115 3,941 5 888 12, 367 16,719 4.018 20,736 9,461 11,275 1912 38,099 3,984 5 726 13,245 15,744 3,303 19,047 10,066 8,981 Fiscal Divi- Other Surplus Operating Total Conducting Fixed Gross Net Per cent Freight year dends charges to expenses maintenance transporta - charges earnings income earned to all incc me to gross to gross tion to gross to gross to gross to net on stock traffic earnings earnings earnings earnings 31.5% capital 13.2% capita 8.5^ 1900 $2,112 $1,968 60.0% 20.3% 39 7% 7o 9.5% 76% 1905 3,644 4,715 51.8 20.6 31.2 30.2 15.0 10.2 18.3 80 1906 3,598 $5,531 2,151 51.9 21.0 30.9 28.3 16.2 11.2 20.6 80 1907 3,598 5,757 125 52.1 20.5 31.6 30.3 16.6 11.3 21.0 78 1908 3,598 3,7 -1 1,030 58.2 26.8 31.4 28.4 17.8 11.3 18.6 77 1909 3,598 3,2 79 562 56.9 26.4 30.5 28.9 17.1 10.1 16.5 75 1910 5,217 6,340 2,869 55.6 25.0 ■30.6 25.8 19.6 14.2 33.1* 76 1911 5,193 4,7 52 1,3,50 57.2 25.1 32.1 24.2 19.5 11.6 25.7 75 1912 4,921 2,989 1,071 59.3 25.1 34.2 26.0 20.3 11.3 29.1 73 Fiscal Train Maintenance per Conducting Train Rat e per mile Freight Frain load 'assenger. year mile evenue train mi e transportation mile density revenue freight earnings per revenue eammgs Freight Passenge tons and company (gross) Way Equipment train mile $2.28 $.190 $.249 $.600 (net) $1.14 cars 1900 $.0094 $.0157 $1,972,135 399 $17,674 1905 2.63 .378 530 822 1.30 .0083 .0146 3,077, 570 507 20,184 1906 2.68 .231 342 843 1.31 .0084 .0145 3,150,263 519 20,044 1907 2.83 .238 342 893 1.36 .0084 0145 3,462,722 519 22,670 1908 2.84 .303 450 888 1.19 .0084 .0141 3,391,298 522 22,446 1909 3,240,677 517 21,359 1910 3,386,619 519 23,299 1911 542 23,210 1912 514 23.440 Due to special profits from sale of Lehigh Valley stock. [ 137 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Central Railroad System of New Jersey, together with the bases upon which they have sold during the decade ending December 31, 1912: CENTRAL RAILROAD COMPANY OF NEW JERSEY General Mortgage 5s Dated July 1, 1887 Maturing July 1, 1987 Interest payable January 1 and July 1 at the Liberty National Bank, New York. Registered interest January 1, April 1, July 1 and October 1. Coupon bonds of $1,000, fully registerable. Registered bonds of $500, $1,000, $5,000, $10,000 and $50,000. Authorized $50,000,000 Outstanding $45,091,000 Per mile . . 121,200 Security : The above bonds are secured by a lien by a direct first mortgage or by deposit with the trustee of the stock of several subsidiary companies. The bonds are secured by a direct first mortgage on 156.59 miles of road, 96.16 miles of second track, lands, buildings, terminals at Jersey City, leaseholds, equipment, etc. They are secured by a first collateral lien by deposit of securities aggregating $18,855,200 par value and covering 215.42 miles of road in New Jersey, including the line from Long Branch to Bay Side with branches to Bivalve, Barnegat and Freehold, N. J. The Reading Company, which owns $14,500,000 stock of the Central Railroad Company of New Jersey, and has deposited the same to secure its Reading Company-Jersey Central Col- lateral Trust 4s of 1951, covenants, in its indenture, to pay the principal and interest of every bond or obligation of any company a majority of whose shares is pledged under the said Collateral 4s. Trustee: Central Trust Company of New York. The above bonds sold in 1902 on a 3.50 t, D 3.75 basis 1903 3.70 3.95 1904 3.62 3.87 1905 3.60 3.75 1906 3.70 3.95 1907 3.90 4.45 1908 3.80 4.25 1909 3.85 4.00 1910 3.95 4.10 1911 3.95 4.15 1912 4.05 4.20 These bonds are considered a legal investment for savings banks in New England. [ 140 AMERICAN DOCK & IMPROVEMENT COMPANY First Mortgage Currency 5s Dated July 1, 1881 Maturing July 1, 1921 Interest payable January 1 and July 1 at the Liberty National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $4,987,000 Security : The above bonds are secured by a first mortgage on three large tracts of improved water front and dock property, one tract being at Caven Point, Jersey City, another lying immediately south of the terminal yards of the Central Railroad of New Jersey at Communipaw, and the other immediately north of the terminal yards of the above company at Jersey City. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Central Railroad of New Jersey, by endorsement. Redemption: The above bonds are redeemable at the option of the company, on any interest date, at 110 and interest. The entire capital stock of the American Dock & Improvement Company ($3,000,000 par value) is owned by the Central Railroad Company of New Jersey, and held under its General Mortgage. These bonds .sold in 1902 on a 3.87 to 4.05 basis 1903 3.95 4.35 1904 3.85 4.05 1905 3.75 4.00 1906 3.85 4.00 1907 3.95 4.37 1908 3.90 4.30 1909 3.95 4.12 1910 4.00 4.20 1911 4.00 4.20 1912 4.10 4.37 These bonds are considered a legal investment for savings banks in New Hampshire. [ 141 ] NEW YORK & LONG BRANCH RAILROAD First Mortgage Gold 4s and 5s Dated September 1, 1891 Maturing September 1, 1941 Interest payable March 1 and September 1 at the Liberty National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $-2,500,000 Outstanding, 4s, $2,308,000 5s, 192,000 Per mile . . . 66,000 Security: The above bonds are secured by a first mortgage on the road of the company from Perth Am- boy, via Long Branch, to Bay Head, N. J., 38.04 miles. They are also secured by a first mortgage on the lands, buildings, appurtenances and future acquisitions of the road. These bonds are GUARANTEED as to INTEREST, JOINTLY by the Pennsylvania Rail- road Company and the Central Railroad Company of New Jersey under the terms of its lease. Trustee: Central Trust Company, New York. The New York & Long Branch Railroad Company was leased jointly in 1888 to the Pennsyl- vania Railroad Company and the Central Railroad Company of New Jersey, at an annual rental equivalent to 7% on the outstanding capital stock, interest on its bonds, and $6,000 for organization expenses. The entire capital stock of the company is owned by the Central Railroad of New Jersey. The 4s of 1941 sold in 1909 on a 4.00 basis 1910 4.00 to 4.10 1911 4.00 1912 4.00 The 5s of 1941 were quoted in December, 1912, on about a 5.00 basis These bonds are considered a legal investment for savings banks in Maine. THE LEHIGH & WILKES-BARRE COAL COMPANY Consolidated Mortgage 4s Dated June 1, 1910 Maturing 1915/1950 Interest payable June 1 and December 1 at the Liberty National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized, $20,000,000 Outstanding $16,996,000 Provisions of $2,500,000 are payable every five years beginning June 1, 1915, the final payment being maturity: June 1, 1950. Security: The above bonds are secured by a direct mortgage on the entire property of the company, subject only to the $2,691,000 First 5s of 1912, and upon the retirement of these, the bonds will become a first mortgage on the company's property, including 12,900 acres of land owned [ 142 ] in fee in the counties of Luzerne, Carbon and Schuylkill, Pennsylvania, and 2,800 acres held on long leases. The lands owned in fee are considered the most valuable in the entire anthra- cite region and it is estimated they hold some 460,000,000 tons of minable coal. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Central Railroad Company of New Jersey by endorsement. Sinking fund: The company agrees to pay the trustee annually before June 1, $460,000 out of earnings and income to be applied to the purchase of these bonds at not exceeding par and interest. If not purchasable at this price, they may be purchased at a higher price or the fund invested in other securities at the discretion of the trustee and with the approval of the company. Trustee: Pennsylvania Company for Insurance on Lives and Granting Annuities, Philadelphia. The Central Railroad of New Jersey owns $8,491,150 of the $9, 21*2,500 outstanding capital stock of the above company. These bonds are considered a legal investment for savings banks in New Hampshire. CENTRAL RAILROAD OF NEW JERSEY Equipment Trust 4s Series " C " Dated April I, 1903 Maturing April 1, 1913 Interest payable April 1 and October 1 at Liberty National Bank, New York. Coupon bonds of $1,000. Authorized and Issued $3,500,000 Outstanding $350,000 Security: The above bonds are secured on 41 locomotives, 35 jnissenger train cars, 1,000 steel coal cars, 1,000 box cars, 40 refrigerator cars and 525 gondola and special flat cars, costing $3,916,492. Trustee: Central Trust ('onipany. New York. CENTRAL RAILROAD OF NEW JERSEY Equipment Trust 4s Series "D " Dated March 1, 1905 Maturing $150,000 yearly to March 1. 1915 Interest payable March 1 and September 1 at Liberty National Bank, New York. Coupon bonds of $1,000. Outstanding $450,000 Security: The above bonds are secured by 12 consolidation and 10 switching locomotives, 25 coaches, 5 combination, 500 box, and 1,000 steel hopper cars. The entire issue was held in the treasury of the com]iany as of June 30, 1912. [ 143 ] CENTRAL RAILROAD COMPANY OF NEW JERSEY Equipment Trust 4s Series "E" Issued in 1906 Maturing $350,000 annually to 1916 Interest payable February 1 and August 1 at Liberty National Bank, New York. Coupon bonds of $1,000. Outstanding $1,400,000 The entire issue was held in the treasury of the company as of June 30, 1912. CENTRAL RAILROAD COMPANY OF NEW JERSEY Equipment Trust 4s Series "F" Issued in 1907 Maturing $110,000 yearly to 1917 Interest payable June 1 and December 1 at Liberty National Bank, New York. Coupon bonds of $1,000. Outstanding $550,000 The entire issue was held in the treasury of the company as of June 30, 1912. CENTRAL RAILROAD COMPANY OF NEW JERSEY In addition to the above described issues, there were outstanding June 30, 1912, $7,000 in real estate mortgages. [ Ui I CHICAGO & NORTHWESTERN RAILWAY COMPANY CHICAGO & NORTHWESTERN RAILWAY COMPANY HISTORY The history of the Chicago & Northwestern Railway begins back in 1830 with the chartering of the Galena & Chicago Union Railroad. By 1850 this company's line had been completed from Chicago to Elgin, and the same peoj^le who built it also constructed the Chicago, jNIilwaukee & Fond du Lac Railroad. In the railroad crisis of 1857, which swept so many Western lines into bankruptcy just at their development stage, both the Galena & Chicago Union and the Chicago, Milwaukee & Fond du Lac Railroads went down. From their ruins rose the Chicago & Northwestern Railway. By 1865 the line had been carried through to the Mississippi River, and to the Missouri River by 1867. The system has been enlarged from time to time through the acquisition of other roads or through extensions built chiefly by proprietary comjjanies, all of whose stocks and bonds were owned by the Chicago & Northwestern Railway Company. From the original 177 miles, in 1859, the total mile- age of the system has increased until in 1912 it embraced 7,960 miles of main track and 1,060 miles of extra main track. Continuing its policy of expansion, during the fiscal year ending June 30, 1911, the company acquired, by purchase, the Lee County Railway, a double-tracked line extending from Nachusa to Nelson, Illinois, a distance of 12.7 miles; and the Sioux City, Dakota & Northwestern Railway, extending from a connection with the Illinois Central Railroad near Hinton, Iowa, to a connection with the Chicago & Northwestern Railway near Hawarden, Iowa, a distance of 28.2 miles. In the same year the Belle Fourche Valley Railway, a line 24 miles in length in South Dakota, and the James River Valley & Northwestern Railway, 40 miles in length, also in South Dakota, were leased. The Chicago and Northwestern purchased the property of the Milwaukee, Sparta & Northwest- ern Railway Company on April 1, 1912. This comi)any had been organized in 1910 to construct a line of 169 miles extending from Lindwern, about eight miles north of Milwaukee, to Sparta, Wisconsin, also to construct a belt line from Lindwern around Milwaukee. With the construction of this line, double-tracked and equi])ped with automatic block signals, a direct low-grade route has been opened between the points in question, to which a large volume of traffic now passing over heavy grades via Madison and Elroy will now be diverted. The Chicago & Northwestern Railway Company had long felt the need of adequate terminal facilities in the city of Chicago. At a cost of millions of dollars and after several years of construc- tion work, ample terminal properties were developed together with extensive track elevations, and put into use during the fiscal year of 1911. These include a splendidly equipped sixteen-track passenger terminal which was opened in June, 1911, and cost with approaches approximately $22,000,000. During 1912 the new terminal handled, on an average, 51,000 people a day. To deal with this traffic required 315 trains daily. Another very important piece of construction, which the "Northwestern" has undertaken, is the building of a ninety-mile extension known as the St. Louis, Peoria & Northwestern Railway, into the heart of the coal fields which the company owns in Illinois. This extension, it has been estimated, will cost nearly $8,000,000 to build, owing to the thickly settled territory through which it must run. It is confidently expected, however, that this proposed line will prove a profitable in- vestment inside of four years, since it will enable the company to transport all its own coal instead of paying freight to the Chicago & Alton, as at present. The Chicago & Northwestern Railway Company owns 149,200 shares of the capital stock of the Chicago, St. Paul, Minneapolis & Omaha Railway Company. This holding is represented by [ 147 ] 53,800 shares of the latter's preferred and 95,400 shares of its common stocks, thus giving the Chicago & Northwestern Railway a working control of this important railroad with more than 1,800 miles of main track. With the exception of one share, the entire capital stock of the Albany Railroad Bridge Company, which owns the railroad bridge across the Mississippi River at Clinton, Iowa, is held in the treasury of the Chicago & Northwestern Railway Company. The company also has contracts and traffic agreements with several of the large systems in the Northwest. It has an arrangement with the Chicago, Burlington & Quincy Railroad whereby the latter has the use of the Albany Railroad Bridge Company's bridge at Clinton, at an annual rental of $20,000; it has the joint use, with the Chicago, Rock Island & Pacific Railroad, of freight terminals at Council Bluffs, Iowa; and most important of all, it has a traffic agreement with the Union Pacific Railroad, the Southern Pacific Railway, the Oregon Short Line Railroad and the Oregon Railroad & Navigation Company, whereby a through route between Chicago and the Pacific Coast is jointly maintained. PROPERTY The total main track operated by the Chicago & Northwestern Railway Company at the close of the fiscal year ending June 30, 1912, was 7,960.45 miles. Of this amount 7,744.85 miles were owned in fee, 1.98 miles were operated through ownership of the entire capital stocks of the companies in question, 136.84 miles were operated under lease and 76.78 miles under trackage rights. There were 1,059.63 miles of extra main track ui operation. The Northwestern extends from Chicago, westward through the rich corn fields of Iowa, into eastern Nebraska. It extends westerly from Omaha and Sioux City to Lander, Wyoming, and to Deadwood, in the Black Hills. x\nother great trunk line carries the road through southern Minne- sota into South Dakota; .^-et another northward from Chicago through Wisconsin into the great iron districts of the INIichigan Peninsula. The Chicago, St. Paul, Minneapolis & Omaha carries the system to Duluth, Minneapolis and St. Paul and from there to Sioux City and Omaha. An average of 7,858.87 miles were operated during the fiscal year 1912 and this figure is used as a basis for the following statistics. CAPITALIZATION The following table has been compiled from the ofiicial reports of the company for the fiscal year ending June 30, 1912, and shows the actual capitalization of the Chicago & Northwestern Rail- way at that time: Capital stock: Preferred $22,398,954 Common 132,455,531 Total capital stock $154,854,485 Total funded debt 190,460,000 Rental capitalized @ 5% 2,575,140 Gross capitalization $347,889,625 Securities owned 28,550,705 Net capitalization $319,338,920 Net capital per mile oi)craled $40,634 Average miles <>|)erale^s Dated August 1, 1901 Maturing August 1, 1936 Interest payable February 1 and August 1 at the Company's office, 111 Broadway, New York. Coupon bonds of $1,000, fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $4,000,000 Outstanding $3,926,000 Per mile . . 32,285 Provisions of Of the $4,000,000 authorized, $3,926,000 are outstanding as above, and the balance, issue: $74,000, is held in the sinking funds of the company. Security: The above bonds are secured by a first mortgage on about 121.58 miles of road, including the line from Sioux City to California Junction, la., 70 miles, and from Blair to Fremont, Neb., 28.4 miles. These bonds have been ASSUMED by the Chicago & Northwestern Railway Company. Trustee- Farmers' Loan & Trust Company, New York. The Sioux City & Pacific Railroad was chartered August 1, 1864. The road was opened from Missouri Valley to Sioux City and from California Junction to Fremont on February 11, 1869. On August 28, 1901, the property was purchased by the Chicago & Northwestern Railway Company, subject to a mortgage securing the $4,000,000 bonds mentioned above, which were assumed by the purchaser. Until 1903 the two roads were operated independently, but at that time they were con- solidated into the Chicago & Northwestern Railwaj' Company. These bonds were sold in 1909 on a 4.20 basis 1910 4.35 1911 4.375 December, 1912 4.40 These bonds are considered a legal investment for savings banks in New England. [ 101 ] FREMONT, ELKHORN & MISSOURI VALLEY RAILROAD Consolidated First Mortgage Currency 6s Dated October 1, 1883 Maturing October 1, 1933 Interest payable April 1 and October 1 at Company's office, 111 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $25,000 per mile Outstanding $7,725,000 Per mile . . 6,590 Provisions of Besides the amount outstanding above, there are $10,675,000 of this issue owned by the Chicago & Northwestern Railway Company, and pledged under its Extension 4s of 1926. No further bonds of this issue may be issued. issue: Security: The above bonds are secured by a first mortgage on 1,172 miles of road including the lines from Fremont, Neb., via Albion, to the Nebraska- Wyoming State Line, 469 miles, and from Da- kota Junction, Neb., to Deadwood, S. D., 145 miles. This issue is further secured by a first mortgage on all the equipment of the Unes in question and future acquisitions. These bonds have been ASSUMED by the Chicago & Northwestern Railway. The Fremont, Elkhorn & Missouri Valley Railroad was chartered January 20, 1869, and the road was opened for traffic in August, 1871. On September 1, 1901, this company took over the operation of the Fremont Branch of the Sioux City & Pacific Railroad, under a lease from the Chicago & Northwestern Railway. On February 10, 1903, the stockholders and voting bondholders of the latter company voted to purchase the property and franchises of this company. Since this consoli- dation became eflfective in 1903, the Fremont, Elkhorn & Missouri Valley Railroad has been operated as the Nebraska & Wyoming Division of the Chicago & Northwestern Railway. These bonds sold in 1902 on a 3.85 to 3.90 basis 1903 3.85 3.95 1904 3.80 3.85 1905 3.65 3.75 1906 3.80 4.05 1907 4.20 1908 4.05 4.15 1909 3.875 1910 4.15 4.20 1911 4.05 4.125 December, 1912 4.40 These bonds are considered a legal investment for savings banks in New England. [ 162 MILWAUKEE & STATE LINE RAILWAY First Mortgage Gold 3 ' oS Dated January 2, lOOfi Maturing January 1, 1941 Interest payable January 1 and July 1, at the Company's office, 111 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 50,000 Security: The above bonds are secured by a first mortgage on the road from St. Francis, near Milwaukee, Wis., to Lake Bluff, 111., 50.24 miles. They arc further secured by a first mortgage on all the equipment of the line and future acquisitions. These bonds have been ASSUMED by the Chicago & Northwestern Railway. Trustee: Farmers' Loan & Tru.st Company, New York. The Milwaukee & State Line Railway Company was chartered February 11, 1J)0.5. under tlie Iaw,s of Wi.sconsin. The road was completed with money advanced by the Chicago & Northwestern Railway Company and upon completion was leased (July 1, 1906) to the latter company under the laws of Wisconsin, which permit such action as precedent to the final purchase and sale, which was consummated January 30, 1909. On February 1, 1909, the company begun operation as a part of the Chicago & Northwestern Railway System. These bonds were sold in 1909 on a 4.25 basis 1910 4.30 1911 4.375 December, 1912 4.40 (bid) These bonds arc considered a legal investment for savings banks in Maine, New Hami)shire and Rhode Island. MANITOWOC, GREEN BAY & NORTHWESTERN RAILWAY First Mortgage Gold S'.js Dated January 2, 190(> Maturing January 1, 1941 Interest payable January 1 and July 1 at the Company's office. 111 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $3,750,000 Outstanding $3,750,000 Per mile . . 33,185 Security: These bonds are secured by a first mortgage on the road from Eland Junction via Green Bay to Manitowoc, Wis., 98 miles, and from Pulaski to Gillette, Wis., 15 miles, totalling 113 miles. They are further secured by a first mortgage on all the equipment of the line and future acquisitions. [ 163 ] These bonds have been ASSUMED by the Chicago & Northwestern Railway. Trustee: Farmers' Loan & Trust Company, New York. The Manitowoc, Green Bay & Northwestern Railway was chartered November 22, 1904, under the laws of Wisconsin. The road was opened from Pulaski to Gillette, December 10, 1906, and from Manitowoc to Eland Junction, January 15, 1907. This road was completed with money ad- vanced by the Chicago & Northwestern Railway, and upon completion was leased (July 1, 1900) to the latter company under the laws of Wisconsin, which permit such action as precedent to the final purchase and sale, which was consummated January 30, 1909. On February 1, 1909, the company began operation as part of the Chicago & Northwestern Railway System. These bonds were sold in 1909 on a 4.05 basis 1910 4.30 1911 4.37 December, 1912 4.40 These bonds are considered a legal investnieat for savings Ijanks in New England except Connecticut. NORTHWESTERN UNION RAILWAY First Mortgage Sinking Fund Gold 7s Dated June 1, 1872 Maturing June 1, 1917 Interest payable March 1 and Sei)teniber 1 at the Company's office, 111 Broadway, New York. Coupon bonds of $500 and $1,000, registerable as to principal. Authorized $3,500,000 Outstanding $3,3(55,000 Per mile . . 53,755 Provisions of Of the $3,500,000 authorized, $3,365,000 are outstanding as above, and the balance, $135,000, issue: is held in the sinking fund. Security: The above bonds are secured by a first mortgage on the company's line from Milwaukee to Fond du Lac, Wis., 62.63 miles, and the equipment of the line and future acquisitions. These l>onds ]ia\e been ASSUMED by the Chicago & Northwestern Railway. Sinking fund: Annually $15,000 is to be applied to the purchase of these bonds at not exceeding par and interest, and if not so purchasable, to be applied to the purchase of other Chicago & North- western bonds at not exceeding par. Bonds thus purchased are to be kept alive. $135,000 of this issue are at present held in this sinking fund. Equity: The above bonds are i)rior in lien to the General 31. ^s of 1987, a sufficient number of which have been reserved lo provide for the retirement of this issue. Trustee: Tlie Fanners' Loan & Trust Company, New York. The Northwestern Union Railwjiy was chartered uu(h'r the laws of Wisconsin as the Milwaukee & Northwestern Riiihvay on February 2."), 1S71. It look its i)rcseul name May 4, 1872. The [ Ki-l J road was opened for traffic Sei>teinber 17, 1873, ami for its construction the above issue was exe- cuted under the guarantee of the Chicago & Northwestern Railway Company, which operated the line as a proprietary road until it was consolidated into the Chicago & Northwestern System in 1888. These bonds were quoted in 1909 on a 4.35 basis (bid) 1910 4.45 1911 4.15 December, 1912 4.95 These bonds are considered a legal investment for New England savings banks. IOWA, MINNESOTA & NORTHWESTERN RAILWAY First Mortgage Gold 3^ 2S Dated January 1, 1900 Maturing January 1, 1935 Interest payable January 1 and July 1 at the Company's office, 111 Broadway, New York. Coupon bonds of $1,000, fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $3,900,000 Outstanding $3,900,000 Per mile . . 20,103 Security: The above bonds are secured by a first mortgage on 194.16 miles of line extending from Belle Plain, la., via Mason City, to Fox Lake, Minn., also on equipment and future acquisitions. These bonds have been ASSUMED by the Chicago & Norlhwcstern Railway. Trustee: Farmers' Loan & Trust Company, New York. The Iowa, Minnesota & Nortlnveslcrn Railway fincorporated under the laws of Iowa) was con- structed by funds of the Chi^s Dated January 1, 1900 Maturing January 1, 1935 Interest payable January 1 and July 1 at the Company's office, 111 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $528,000 Outstanding $528,000 Per mile . . 16,375 Security: The above bonds are secured by a first mortgage on the company's line from Tyler, Minn., to Astoria, S. D., a distance of 32.20 miles. The bonds have been ASSUMED by the Chicago & Northwestern Railway. Trustee: Farmers' Loan & Trust Company, New York. In 1899, in order to reach new business developing in South Dakota, plans were made to con- struct a line from Tyler, Minnesota, to Astoria, South Dakota, to be known as the Minnesota & South Dakota Railway Company. In 1900 this line was completed from the proceeds of the sale of the above bonds. From the time of its completion it was merged, along with the Dakota Central and the ]\Iankato &New Ulm Railway Companies, into the Winona & St. Peter Railroad. The latter company, when formed, together with the Boyer Valley, the Boone Comity, the Harlan & Kirkman, Minnesota & Iowa, and Iowa, Minnesota and Northwestern Railway Comi^anies, was absorbed by the Chicago & Northwestern. These bonds are considered a legal investment for sa\'ings banks in New England except Vermont. MINNESOTA & IOWA RAILWAY First Mortgage Gold 3^3 Dated June 1, 1899 Maturing June 1, 1924 Interest payable June 1 and December 1 at the Company's office. 111 Broadway, New York. Coupon bonds of $1,000, fully registerable. Registered bonds of $1,000, $5,000, $10,000. Authorized $1,904,000 Outstanding $1,904,000 Per mile . . 16,000 Security: The above bonds are secured by a first mortgage on the company's lines from Burt, la., to Vesta, Minn., 119.10 miles; also on future acquisitions. These bonds li.ave been ASSUMED by the Chicago & Nortliwcstern Railway. Trustee: Fanners' Loan & Trust Cotiiiiaiiy, New York. [ l Maturing July 1, 1934 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $28,050,000 Provisions of Of the total amount authorized there are at present outstanding, as above, $28,050,000, the issue: balance, $21,950,000 being reserved for construction of branches and feeders for the Pacific extension to Puget Sound. Security : The above bonds are not secured by a mortgage, but they are direct obligations of the company as evidenced by its indenture, which provides that no new mortgage shall be placed on the railroad owned by it July 1, 1909, without equally securing these bonds. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1909 on a 4.35 to 4.40 l)asis 1910 4.42 4.62 1911 4.45 4.05 1912 4.55 4.75 These bonds are considered legal for savings banks in New Hampshire and Rhode Island. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Chicago & Pacific Western Division, First Gold 5s Dated Jatuiary 1, 1881 Maturing January 1, 1921 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized (clo.sed mortgage) Outstanding $25,340,000 Per mile . . 22,605 Security: The above bonds are secured by a first mortgage on the main line from Marion to Council Bluffs, la., 261.06 miles; from Scotland to Al)erdeen. S. D., 176.32 miles; from Manila, la., to Scotland Junction, 178.12 miles; from Ottumwa Junction to Coburg, Mo., 202.54 miles, and branches; the above totalling 1,120.9 miles. The bonds are further secured by a first mortgage on the equipment and future acquisitions on the above. [ 213 ] Equity: The above bonds are prior in lien to tlie General Mortgage 4s and Sj^^s of 1989, a sufficient number of which has been reserved to retire this issue. Under the terms of the above General Mortgage no further bonds may be issued. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1900 on a 3.50 to 3.75 basis 1901 3.47 3.80 1902 3.72 4.10 1903 3.65 3.70 1904 3.55 3.80 1905 3.50 3.75 1906 3.20 3.62 1907 3.875 4.50 1908 3.82 4.17 1909 3.90 4.15 1910 4.00 4.375 1911 4.08 4.25 1912 4.10 4.40 These bonds are considered a legal investment for savings banks in New England. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Dubuque Division First Currency 6s Dated July 1, 1880 Maturing July 1, 1920 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $6,500,000 plus $15,000 per mile Provisions of issue: Security : Outstanding $4,784,000 Per mile . . 13,550 The amount originally authorized, as above, was limited by the terms of the General Mort- gage 4s and 33^^s of 1989 to $5,565,000. Of this amount, $4,784,000 are outstanding in the hands of the public, and the balance, $781,000, has been retired by the sinking fund. The abo\'e bonds are secured by a first mortgage on the line from Clinton, la., to River Junc- tion, Minn., 178.01 miles, and important branches, the above totalhng 352.84 miles. The bonds are further secured by a first mortgage on the equipment and future acquisitions of the above. Equity: The above bonds arc prior in lien to the General Mortgage 4s and 3j^s of 1989, a sufficient number of which has been reserved to retire this issue. Sinking fund: An annual amount, equal to 1% of the total bonds issued, is to be applied to the purchase of these bonds at not exceeding 103. Bonds so purchased are to be cancelled, and if not so pur- chasable, the money is to be invested in other first mortgage 6% bonds of the company. The sinking fund went into effect July 1, 1885. [ 214 ] These bonds sold in 1900 on 1900 on a 8.025 to 3.84 basi 1901 3.67 1903 3.80 4.10 1904 3.85 3.90 1905 3.67 1906 3.72 3.95 1908 4.27 1909 3.92 1910 4.25 4.375 1911 4.05 4.20 1912 4.00 4.35 These bonds are considered a legal investment for savings banks in New England. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Wisconsin & Minnesota Division First Gold 5s Dated July 1, 1881 Maturing July 1, 1921 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized (closed mortgage) Outstanding $4,755,000 Per mile . . 22,115 Security : Equity: Trustee: The above bonds are secured by a first mortgage on 215.15 miles of road and future acquisitions. The hues included in this mortgage are those from Wabasha to Zumbrota, Minn., and from Wabasha to Chippewa Falls, Wis., also the important Hne from St. Paul to Minneapohs. The above bonds are prior in hen to the General 4s and 33^s of 1989, a sufficient number of which have been reser\'ed to retire this issue. Under the terms of the General 4s and 33/^s of 1989 no further bonds may be issued. Farmers' Loan & Trust Company, New York. These bonds sold in 1900 on a 3.58 to 3.82 basis 1901 3.60 3.82 1902 3.47 3.80 1903 3.70 4.05 1904 3.68 3.875 1905 3.62 3.72 1906 3.67 3.95 1907 4.00 4.60 1908 3.90 4.20 1909 3.95 4.15 1910 4.10 4.37 1911 4.12 4.20 1912 4.15 4.30 These bonds are considered a legal investment for savings banks in New England. [ ^215 ] CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Chicago & Missouri River Division First Currency 5s Dated July 1, 1886 Maturing July 1, 1026 Interest payable January 1 and July 1 at the Company's office, •i'J Broadway, New York. Coupon bonds of $1,000, registerable as to i^rincipal. Authorized (closed mortgage) Outstanding $3,083,000 Per mile . . 41,105 Security: The above bonds are secured by a first mortgage on the company's lines in South Dakota, totalling 75.02 miles. Equity: The above bonds are prior in lien to the General 4s and S^/^s of 1989, a sufficient number of which have been reserved to retire this issue. Under the terms of the General 4s and 33/^s of 1989, no further bonds may be issued. Trustee: Farmers' Loan & Trust Companj', New York. These bonds sold in 1900 on a 3.57 to 3.78 basis 1901 3.60 3.87 1902 3.50 3.80 1903 3.77 4.05 1904 3.67 3.95 1905 3.62 3.73 1906 3.70 3.95 1907 4.00 4.30 1908 4.05 4.23 1909 3.95 4.15 1910 4.11 4.38 1911 4.20 1912 4.15 4.40 These bonds are considered a legal in\'estment for savings banks in New England. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY La Crosse & Davenport Division First Currency 5s Dated July 1, 1879 Maturing July 1, 1919 Interest payable January 1 and July 1 at the Company's office, 42 Hroadway, New York. Coupon bonds of $1,000. Authorized $3,00(),()()() (closed mortgage) Outstanding $2,500,000 Per mile . . 13,250 Security: The above i)onds arc secured by a first mortgage on tlie company's line from I)aveni)ort to Jackson Junction, la., and branches, totalling 188.62 miles. They are further secured by a first mortgage on the e(iui|)ment of the line and future accjuisitions. [ 216 ] Equity: The above bonds are prior in lien to the General 4.s and 3} 2'' of 198!), a sufficient number of which have been reserved to retire this issue. Under the terms of the General 4s and 3} 2s of 1989 no further bonds may be issued. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1900 on a 3.60 to 3.70 basis 1901 3.57 3.67 1902 3.50 3.72 1903 3.75 3.92 1904 3.82 3.90 1905 3.60 3.75 1906 3.67 3.92 1907 4.12 4.35 1908 3.92 4.22 1909 4.15 1910 4.20 4.40 1911 4.25 4.35 1912 4.20 4.25 These bonds are considered a legal investment for savings banks in New England. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Wisconsin Valley Division First Currency 6s Dated July 1, 1880 Due July 1, 1920 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,700,000 plus $15,000 per mile Outstanding $1,853,000 Per mile . . 11 ,475 Provisions of The amount originally authorized, as above, was limited by the terms of the General Mort- issue: gage 4s and Sj^s of 1989 to $2,466,000, of which $1,853,000 are outstanding in the hands of the public, and the balance, $613,000, has been retired by the sinking fund. Security : The above bonds are secured by a first mortgage on the Division's fine from Tomali to Minocqua, Wis., 161.49 miles. They are further secured by a first mortgage on the equipment of the line and all future acquisitions. Equity: The above bonds are prior in lien to the General 4s and 3^28 of 1989, a sufficient number of which have been reserved to retire this issue. Trustee: New England Trust Company, Boston. Sinking fund: The annual amount equal to 1% of the total issue of these bonds is to be applied to their pur- chase at not exceeding 103. Bonds so purchased are to be cancelled, but if not so purchasable the amount is to be invested in first mortgage 6% bonds of the company. The sinking fund be- came effective July 1, 1885. [ 217 ] The bonds sold in 1900 on a 3.78 to 3.90 basis 1901 3.87 1902 3.78 1903 3.80 4.10 1904 3.92 4.00 1905 3.72 1906 3.82 3.90 1909 3.95 (bid) 1910 4.25 1911 4.12 to 4.32 1912 4.125 4.55 These bonds are considered a legal investment for savings banks in New England, CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Chicago & Lake Superior Division First Gold 5s Dated July 21, 1881 Maturing July 1, 1921 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $20,000 per mile Outstanding $1,360,000 Per mile . . 7,705 Security: The above bonds are secured by a first mortgage on the lines of the division in Wisconsin, totalling 171.79 miles. They are further secured by a first mortgage on the entire equipment of those lines and all future acquisitions. Equity: The above bonds are prior in lien to the General 4s and 33^s of 1989, a sufficient number of which have been reserved to retire this issue. Under the terms of the General 4s and 33/^s of 1989 no further bonds may be issued. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1900 on a 3.60 to 3.80 basis 1901 3.52 3.82 1902 3.50 1903 3.72 1905 3.62 3.72 1907 4.20 1909 4.00 4.10 1910 4.10 4.15 1911 4.12 4.25 1912 3.90 4.30 These bonds arc considered a legal investment for savings lianks in New England. [ 218 ] CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Terminal First Gold 5s Dated July 1, 1884 Maturing July 1 1914 Interest payable January 1 and July 1 at the Company's office, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $4,748,000 Provisions of The amount originally authorized, as above, was limited by the terms of the General 4s and issue: Sj^s of 1989 to $4,773,000, of which $4,748,000 are outstanding in the hands of the public, and the balance, $25,000, has been retired by and held under the General 4s and S^os- Security : The above bonds are secured by a first mortgage on the railroad terminal property in Chicago and Milwaukee and all future acquisitions. They are prior in lien to the General 4s and S^/^s of 1989, a sufficient number of which have been reserved to retire this issue. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1900 on a 3.50 to 3.87 basis 1901 3.50 3.82 1902 3.45 3.75 1903 3.75 3.85 1904 3.65 3.90 1905 3.47 3.70 1906 3.75 4.12 1907 3.95 5.00 1908 3.70 4.37 1909 3.85 4.10 1910 4.00 4.35 1911 4.00 4.30 •, 1912 4.80 1 [bid) These bonds are considered a legal investment for savings banks in New England. FARGO & SOUTHERN RAILWAY First Mortgage Gold 6s Dated October 10, 1883 Maturing January 1, 1924 Interest payable January 1 and July 1 at the office of the Chicago, Milwaukee & St. Paul Railway, 42 Broadway, New York. Coupon bonds of $1,000. Authorized $1,250,000 (closed mortgage) Outstanding $1,250,000 Per mile . . 10,685 Security: The above bonds are secured by a first mortgage on the company's line from Fargo, N. D., to Ortonville, Minn., 116.97 miles. They are further secured by a first mortgage on all the equipment of the line and future acquisitions. [ 219 ] Equity: The above bonds are prior in lien to the General 4.s and 3I2S of 1989, a sufficient number of which have been reserved to retire this issue. Under the terms of the General 4s and 3}^s no further bonds may be issued. Trustee: Farmers' Loan & Trust Company, New York. The Fargo & Southern Railway Company was incorporated in the territory (now the State) of Dakota, and the property of tlie railroad was purchased by the Chicago, Milwaukee & St. Paul Railway Company in 1885. The latter assumed the mortgage indebtedness of the Fargo & Southern Railway Company and the above bonds are so endorsable upon presentation. These bonds sold in 1909 on a 4.10 to 4.30 basis 1910 4.37 1911 4.25 December, 1912 4.50 (bid) These bonds are considered a legal investment for savings banks in New England except Maine. DAKOTA & GREAT SOUTHERN RAILWAY First Mortgage Gold 5s Dated January 1, 1886 Maturing January 1, 1916 Interest payable January 1 and July 1 at the office of the Chicago, Milwaukee & St. Paul Railway, 42 Broadway, New York. Coupon bonds of $1,000. Authorized (closed mortgage) Outstanding $2,856,000 Per mile . . 17,962 Security: The above bonds are secured by a first mortgage on the company's lines in North and South Dakota, totalling 158.93 miles, and all the equipment on them and future acquisitions. These bonds have been ASSUMED by the Chicago, Milwaukee & St. Paul Railway Company. Equity: The above bonds are prior in lien to the General 4s and 33^s of 1989, a sufficient number of which have been reserved to retire this issue. Under the terms of the General 4s and 33^s no further bond.s may be issued. Trustee: Farmers' Loan & Trust C^ompany, New York. The Dakota & Great Southern Railway Company was incorporated in the territory (now the State) of Dakota, and the property of the railway was purchased by the Chicago, Milwaukee & St. Paul Railway Comjjany in 1886, the latter assuming the mortgage indebtedness of the company. [ 220 ] These bonds sold in 1900 on a 3.57 to 4.10 basis. 1901 3.57 3.95 1902 3.55 3.85 1903 3.87 4.10 1904 3.70 3.98 1905 3.62 3.67 1906 3.75 4.10 1907 4.10 4.20 1908 3.85 4.37 1909 4.05 4.22 1910 4.35 4.50 1911 4.15 4.30 1912 4.20 4.40 These bonds are considered a legal investment for savings banks in New England except Elaine. MILWAUKEE & NORTHERN RAILROAD First Mortgage 4il'S Dated June 10, 1880 Maturing June 1, 1913 Extended June 1, 1910, and reduced from 6s Interest paj'able June 1 and December 1 at the office of the Chicago, Milwaukee & St. Paul Railway, 42 Broadway, New York. Coupon bonds of $1,000, registerable as to |)rincipal. Authorized $2,155,000 Outstanding $2,155,000 Per mile . . 16,835 Security: The above bonds are secured by a first mortgage on the companj''s line from North Milwaukee to Green Bay, Wis., and branches, totalling 128.25 miles. They are further secured by a first mortgage on all the equipment of the line and future acqiusitions. These bonds have been ASSUMED by the Chicago, Milwaukee & St. Paul Railway Company. Equity: The above bonds are |)rior in lien to $4,003,000 Milwaukee & Northern Consolidated 6s of 1913. The Milwaukee & Northern Railroad wa.s incorporated under the laws of Wisconsin. The prop- erty of the railroad was deeded to the Chicago, INIilwaukee & St. Paul Railway Company in 1893. The latter assumed at that time all its funded indebtedness. These bonds sold in 1911 on a 4.10 to 4.37 basis July, 1912 4.25 These bonds are considered a Ifgal investment for savings banks in New England. [ 221 ] MILWAUKEE & NORTHERN RAILROAD Consolidated Currency 6s Dated Feliruary 11, 1884 Maturing June 1, 1913 Interest payable June 1 and December 1 at 42 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $8,000,000 Outstanding $4,003,000 Per mile . . 9,508 Provisions of Of the total amount authorized, $4,003,000 are outstanding in the hands of the public and issue: $1,089,000 are held in the treasury of the company. They are subject to the Milwaukee & Northern First 4)^s of 1913. Security: The above bonds are secured by a direct mortgage ou 420.71 miles of road, and all the equip- ment on the lines covered, and future acquisitions. They are secured by a first mortgage on 292.46 miles, all in Wisconsin, and by a second mortgage (subject to the above-mentioned 4^8 of 1913) on 128.25 miles. These bonds have been ASSUMED by the Chicago, Milwaukee & St. Paul Railway Company. These bonds sold in 1900 on a 3.85 to 4.00 basis 1901 3.70 4.00 1902 3.45 3.70 1903 3.70 4.05 1904 3.60 4.10 1905 3.65 3.75 1906 3.55 1907 3.85 5.05 1908 3.75 4.30 1909 3.90 4.50 1910 4.00 4.70 1911 4.05 5.05 ', 1912 4.50 These bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY European Loan Debenture 4s Dated June 1, 1910 Maturing June 1, 1925 Interest payable June 1 and December 1 at Paris and London, in pounds sterling and francs. Coupon bonds of 500 and 2,500 francs. Authorized 250,000,000 francs Outstanding 250,000,000 francs Security : The above bonds are not secured by mortgage, but are a direct obligation of the company as evidenced by its indenture, which provides that no future mortgage shall be executed upon [ oao ] Trustee : any part of its system without giving existing bonds the benefit thereof. The company further covenants not to part with any present or future holdings of the shares of the Chicago, Mil- waukee & Puget Soimd Railway Company so long as any of these debentures shall remain outstanding. United States Mortgage & Trust Company, New York. These bonds were issued for the purpose of obtaining funds for the extension of the company's railway, for second track purposes, for additional equipment, and for such other additions and bet- terments as should be ordered by the board of directors. These bonds are considered a legal investment for savings banks in New Hampshire. CHICAGO, MILWAUKEE & PUGET SOUND RAILWAY First Mortgage Gold 4s Dated January 1, 1909 Maturing January 1, 1949 Interest j^ayable January 1 and July 1 at Company's office, i'i Broadway, New York. Coupon bonds of $100, $500 and $1,000, registerable as to principal. Coupon bonds of $500 and $1,000 are fully registerable. Registered bonds of $500, $1,000 und $5,000 and multiples of $500. Coupon and registered bond.s interchangeable. Authorized $200,000,000 Outstanding $155,691,410 Provisions of Of the amount outstanding, $129,596,410 are held in the treasury of the Chicago, Milwaukee issue: & St. Paul Railway, and $26,095,000 are in the hands of the i)ublic. The balance, $44,308,590, is reserved for expenditures made after January 1, 1911, for construction or acquisition of new lines, terminals, equipment, improvements, etc., under restrictions of the mortgage. Security: The above bonds are secured by a first mortgage on the entire railroad line, terminals, equip- ment, operating contracts, etc.. of the company including: (a) a first mortgage on 2,012 miles of road comprising the main line from Mobridge, S. D., to Maple Valley, Wash., and branches constructed and in operation; (b) a first mortgage on the company's undivided half interest in the line from Black River Junction to Tacoma, Wash., 71.23 miles, owned jointly with the Oregon- Washington Railroad & Navigation Company; (c) also upon equipment cost- ing about $22,555,000, terminals in Seattle, costing over $2,000,000, terminals in Tacoma costing over $2,000,000, and terminals in Spokane costing over $3,000,000; (d) also upon operating contracts expiring in 2005 on the line from Maple Valley to Seattle, Wash, (about 20.5 miles). The above bonds are GUARANTEED as to PRINCIPAL ami INTEREST by the Clii- cago, Milwaukee & St. Paul Railway Company by endorsement. Trustees : The United States Trust Company, New York, and Edward W. Sheldon, E.scp These bonds )ld in 1911 on a 4.27 to 4.35 basis 1912 4.25 4.40 These bonds are considered a legal investment for savings banks in New Hampshi [ 223 ] and Rhode Island. CHICAGO, MILWAUKEE & ST. PAUL RAILWAY Convertible Gold 4y2S Dated June 1, 1912 Maturing June 1, 1932 Interest payable June 1 and December 1, at New York. Coupon bonds of $100, $500 and $1,000, registerable as to principal. Registered bonds of $500, $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $34,893,500 Provisions of Of the total amount authorized, $34,893,500 are outstanding as above, and the balance, issue: $15,106,500, have been reserved for corporate purposes. Security: The above bonds are a direct obligation of the Chicago, Milwaukee & St. Paul Railway Com- pany, but are not secured by a mortgage. In its indenture the company agrees to make no new mortgage upon its railroads, or any part thereof, while these bonds are outstanding, without ratably securing the same by such a mortgage. Convertibility: These bonds are convertible at par into common stock from June 1, 1917, to June 1, 1922, inclusive. Redemption: They are redeemable as a whole on or after December 1, 1922, upon 90 days' notice, at 105 and interest. Trustee: United States Trust Company, New York. These bonds were offered to stockholders of record Ajn-il 25, 1912, at par to the extent of 15% of their holdings, the right to subscribe closing on, and not later than, May 31, 1912. They sold up to Jan. 1, 1913, on a 4.00 to 4.37 basis. These bonds are considered a legal investment for savings banks in New Hampshire. [ 224 ] CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY COMPANY CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY COMPANY HISTORY The Chicago, St. Paul, Minneapohs & Omaha Railway was chartered in 1880, under the laws of Wisconsin, as a consolidation, effective June 1 of that year, of the Chicago, St. Paul & ^Minneapolis Railway and the North Wisconsin Railway Companies. During its thirty-odd years of existence it has acquired various branches, among them the St. Paul & Sioux City Railroad, the ^Menominee Railway, the Sault Ste. Marie & Southwestern Railway, the Minnesota & Wisconsin Railroad, the Cliipi)ewa Valley & Northwestern Railway, the Superior Short Line Railway and the Eau Claire, ('hipj)ewa Falls & Northeastern Railway. Since 1907 several extensions have been built and are now under operation. The first was opened for traffic October 25, 1907, running from Newcastle to Wynot, Nebraska, a distance of 18 miles. On January 1, 1909, an extension of the line from Draper to Kennedy, Wisconsin, 9 miles, was put in operation, and on October 3. 1910, an extension from Kennedy to Kaiser, Wisconsin, a distance of .5 miles, was completed and opened for traffic. In the fall of 1911 a short extension from Black River Falls to a connection with the main line at Vaudreuil, Wisconsin, was completed. The "Omaha," as it is familiarly known, passed under the control of the Chicago & Northwestern Railway Company in November, 1883, and has since then been operated practically as a ])art of the larger road. Of its $11, '•259,911 outstanding preferred stock, $5,380,000 is owned i>y the Northwest- ern, which also owns $9,5-10,000 of the $18,559,086 common stock. This gives the latter control of 149,200 shares of the 298,190 outstanding. A majority of its directors are directors of the North- western. PROPERTY Based on the company's report for the fiscal year ending June 30, 1912, the company oj)erated 1,744.39 miles of road, of which 1,674.80 miles were owned in fee and 69.59 miles were those of leased lines. The average miles operated for the fiscal year 1912 were 1,745.10. In addition to this, the company owned and operated 119.85 miles of second track as compared with 85.29 miles in 1911. Its lines run southerly from Bayfield, Wisconsin, and Duluth, Minnesota, on Lake Superior, through St. Paid and Minneapolis, to Sioux City and Omaha, Nebraska, with important branches. It traverses the States of Wisconsin, Minnesota and Nebraska, whose population in 1890 was 4,047,620 as compared with 5,601,700 in 1910. [ 227 ] CAPITALIZATION The capital account of the Chicago, St. Paul, Minneapolis & Omaha Railway Company stood on its balance sheet of June 30, 1912, as follows: Capital stock Preferred $12,646,833 Common 21,403,293 Total capital stock $34,050,126 Funded debt 35,098,046 Gross capitalization $69,148,172 Securities owned 380,595 Net capitalization $68,767,577 Net capital per mile operated $39,350 Average miles operated 1,745.10 Net income to net capital 7.1% Fixed charges to net income 57.5% Margin of safety 42.5% In the above table are included $1,386,922 preferred and $2,844,207 common stocks held in the treasury of the company, also $51,046 bonds. Prior to 1912 there had been no material increases in the capitalization of the company since its control by the Northwestern, in fact, no large financing since 1880. A sale of bonds by the Omaha was recorded in April, 1911, when $1,500,000 5% bonds of the Superior Short Line, which had been held in the treasurj' of the company, were sold. During the fiscal year of 1912 the directors were authorized to issue $15,000,000 5% debentures. By permission of the Railroad Commission of Wisconsin $5,000,000 of these bonds were sold in February, 1912, causing an increase in the total funded debt per mile of road operated of $2,845. The important result of this issue has been the double tracking of the line from Eau Claire to Hudson, Wisconsin, a distance of GO miles, which was made necessary because of the heavy traffic passing over that portion of the road. Of the total issue, $3,700,000 will be used for constructing and equipping the double trackage, but with the completion of the work a material increase in revenue is anticipated. On June 30, 1912, the company's funded debt per mile was $20,113, as compared with $17,267 in 1911. The total net capital outstanding per mile was $39,350, on which 7.1% net was earned. This compares with $36,594 and 8.7% respectively in 1911. The capital showing of the "Omaha" is very nearly as good as that of the Northwestern. The latter's net capital per mile was $40,634, but its net income on this was 7.6% as compared with the "Omaha's" $39,350 net capital per mile and net income of 7.1%. In 1912 the Chicago, Milwaukee & St. Paul reported a net capitalization of $49,181 and earned 6.2% net on this figure. In all three cases the margin of safety for the interest on the securities was relatively high, the "Omaha's" figure of practically 42.5% comparing with 47.5% for the Northwestern and 43.2% for the St. Paul. [ 228 ] CHARACTER OF TRAFFIC No commodity statistics are given by the company in its report, but, like the Northwestern, it is known to depend largely for its freight trafSc on the lumber and mine products of the north and the grain fields of Nebraska. About two-thirds of the business of the road is freight and the general stability of its freight trafBc is shown by the following table: Year Freight Train Freight Rate density load earnings per ton tons per mile 1907 625,176 238 $9,423,097 $.0088 1908 538,340 233 8,276,781 .0089 1909 550,958 245 8,627,853 .0090 1910 615,863 251 9,720,912 .0091 1911 672,233 274 10,563,204 .0090 1912 625,887 249 9,478,792 .0087 It will be seen that, with the exception of two poor years in 1908 and 1909, the road's tonnage held up very satisfactorily. During the fiscal year of 1912 the company reported a decline of 475,223 tons of revenue freight carried as compared with 1911, due to poor crops in part of its terri- tory. This, together with a decrease in the average rate per ton per mile, brought about a decrease in freight revenue of $1,084,412, or 10%. It is interesting to compare the average freight density, train load tons and rate per ton of the Omaha for the six years ending June 30, 1912, with the corresponding averages of the Northwestern and the St. Paul : Freight Train Rate density load per ton tons Omaha 604,743 248 $.0089 Northwestern 679,170 270 .0089 St. Paul 694,247 279 .0083 The passenger business of the Omaha is of growing importance. During the fiscal year of 1912 it represented nearly 30% of the total business of the road. With the growth in population the passenger density has shown a marked increase, save in 1912, while earnings in the face of a general decrease in passenger rates have shown a corresponding gain from year to year, as will be seen by the following table: Year Passenger Passenger Rate per density earnings passenger per mile 1907 97,086 $3,758,563 $.0227 1908 108,079 3,690,483 .0198 1909 118,329 3,990,944 .0195 1910 129,075 4,309,072 .0192 1911 133,758 4,475,419 .0192 1912 126,636 4,551,593 .0206* * During the fiscal year of 1912 the passenger rate was increased to three cents a mile. 229 ] EARNINGS Based on tlie annual reports of the Chicago, St. Paul, Minneapolis & Omaha Railway, gross and net earnings, also figured on a i)er mile basis, are given for the years 1907 to 1912 inclusive: \eaT Average- Gross Per .Xet Per miles earnings mile earnings mile operated 1907 1,705 $14,035,310 $8,'23'2 $5,056,296 $2,966 1908 1,725 12,840,368 7,444 4,353,128 2,527 1909 1,734 13.524,649 7,799 4,693,421 2,706 1910 1,739 15,095,023 8,680 5,206,543 2,993 1911 1,743 16,092,851 9,232 5,436,797 3,118 1912 1,745 15,135,426 8,674 4,669,210 2,676 The general business depression of 1908 and 1909 had its effect on the earnings of this system as well as others, and the splendid recovery shown in 1910 and 1911 is very satisfactory. Gross earnings in 1911 were 25% higher than the low figures of 1908, and the largest ever reported. Net earnings also were the highest ever reported, being nearly $400,000 greater than the previous high record of 1907, and 28% higher than the low figures of 1908. Gross earnings in 1912 declined over $950,000, while net earnings fell $767,600, as compared with 1911. MAINTENANCE Following are the amounts .spent by the Omaha for maintenance during the years 1907 to 1912 inclusive: Year Maintenance Total Total \\u.\- 1907 $1,782,707 1908 1,585,380 1909 1,643,784 1910 1,956,500 1911 1,965,393 1912 1,684,548 In spite of the shar]i decline in gross earnings during 1908 and 1909 the company did not ap- ])arently curtail maintenance charges materially. In 1910 and 1911 maintenance appears to have been liberal. The following table is appended showing the average traffic densities and the average amounts spent for maintenance per mile by the Omaha, the Northwestern, and the St. Paul, for six years ending Jime 30, 1915: Traffic Total Per cent of density maintenance total to gross per mile earnings Omaha 723,570 $1,993 23.9% Northwestern 804,077 2,321 25.3 St. Paid 785,417 2.108 25.3 While the Omaha reported an average density nearly 100,000 less than the Northwestern, it spent on an average but $220 per mile less for maintenance of way and equipment. With a traffic density over 75,000 less than the St. Paul, the Omaha .spent over $60 a mile more than the former, a very favorable showiiig. [ 230 ] Equipment maintenance per mile $1,594,220 $3,386,927 $1,980 1,507,267 3,092,647 1,792 1,577,831 3,221,615 1,858 1,758,143 3,714,643 2,137 1,863,983 3,829,376 2,197 1,796,694 3,481,242 1,995 ADDITIONS AND BETTERMENTS There have been no Ijetternients charged to income since the fiscal year of 1906, when $600,000 was set aside for this purpose. All improvements made since then have been charged to capital as follows : Year Additioi slo ToUil Less property Net Property Equipment additions and equipment sold additions 1907 . . . $1,062,0^28 $124,627 $1,186,655 $13,128 $1,173,527 1908 . . . 424,125 535,155 959.280 156,613 802,666 1909 . . . 255,225 18,132 273,357 37,849 235,508 1910 . . . 381,939 591,730 973,669 384,542 589,126 1911 . . . 822,544 577,182 1,399,726 40,989 1.358,736 1912 . . . 2,070,294 365,365 2,435,659 81,061 2,354,598 $6,514,161 DIVIDENDS The Chicago, St. Paul, ^Minneapolis & Omaha Railway Company has paid the following dividends since 1897: Preferred stock 1897-1912 7% Common stock 1897-8 2% 1899 33^ 1900-1 5 1902-4 6 1905-12 7 Since 1905 the company has reported the following surpluses over all charges and dividends. These amounts have been carried to profit and loss. Year Ainoimt IVr cent earned Year Amount Per cent earned on common stock * on common stock 1905 . . . $154,268 8.6 1909 ... $175,330 6.9% 1906 . . . .331,279 10.4 1910 . . 528,375 8.5 1907 . . . 756,342 9.6 1911 . . 729,475 9.4 1908 . . . 18,144 6.2 1912 .... 2,307t 6.1 It will be noted tiiat in every year u]) to 1912, except 1908, dividends were earned by substantial margins. It was ])robably on the strength of this showing that the company felt justified in main- taining its dividend rate in the face of the temporary set back which earnings received in 1912. On June 30, 1912, the Profit and Loss Account of the company stood on its general balance sheet at $4,626,822. This is etiual to 13.6';o of the total capital stock. STATISTICS Following are given capitalization, earnings and traffic statistics of the Chicago, St. Paul, Min- neapolis & Omaha Railway, based on the average miles operated, for the year 1900 and for the years 1905 to 1912 inclusive: Common stock figure used incluiles trca; pon whicli no [ 231 ] ids are paid. CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY Fiscal year 1900 1905 1900 1907 1908 1909 1910 1911 1912 Preferred Common Funded Rentals stock stock debt @ 5% Gross Owned by Net capital company capital ?8,190 7,514 7,470 7,417 7,331 7,293 7,272 7,255 7,247 12,717 12,643 12,553 12,407 12,343 12,307 12,279 12.208 $16,730 16,519 16,466 16,485 16,454 16,449 17,265 17,267 20,113 $1,424 1,473 1,458 1,436 1.796 37,891 36,844 36,801 $54 127 207 218 $40,152 38,096 37,949 37,802 37,894 35,972 36,732 36,594 39,350 Average Extra miles main operated track 1,544 1,683 1,705 1,725 1,734 1,739 1,743 1,745 Fiscal year 1900 1905 1906 1907 1908 1909 1910 1911 1912 Gross operating revenue 7,087 7,645 8,232 7,444 7,799 8,680 9,232 8,674 enance Transportation Net Other and general operating income Equipment expense revenue $1,228 821 960 1,045 919 948 1,126 1,128 $592 685 714 935 873 910 1,011 1,069 1,030 $2,126 2,711 2,849 3,286 3,125 3,235 3,550 3,917 4,003 82,752 2,870 3,122 2,966 2,527 2,706 2.993 3,118 2,676 $2,752 2,870 3,122 2,966 2,659 2,777 3,075 3,198 2.814 Fixed charges $1,198 1,300 1,340 1,298 1,436 1,473 1,572 1,583 1,619 Surplus avail- able for dividends $1,554 1,570 1,782 1,668 1,223 1,304 1,503 1,615 1,195 Fiscal year 1900 1905 1906 1907 1908 1909 1910 1911 1912 Divi- dends $1,111 1,239 1,233 1,224 1,211 1.204 1.200 1,197 1,196 Other Surplus Operating charges expenses to in- to gross come earnings 239 355 Total Conducting Fixed mainte- transpor- charges nance to tation to to gross gross gross earnings earnings earnings Gross earnings to gross capital Net Per cent income earned on to net capital stock j capital Preferred Common $324 $119 59.0% 27.1% 31.9% 17.9% 16.6% 6.8% 18.9% 7.6% 444 12 100 303 418 59.5 59.1 64.2 66.1 65.3 65.5 66.3 21.3 21.9 24.2 24.1 23.8 24.6 23.9 38.2 37.2 40.0 42.0 41.5 40.9 42.4 46.1 18.3 17.5 15.8 19.3 18.8 18.1 17.1 18.6 18.5 20.1 21.7 19.6 21.6 23.6 25.1 21.9 20.9 23.8 22.4 16.7 17.8 20.7 22.2 16.5 8.6 10.4 9.6 6.2 6.9 8.5 9.4 6.1 Fiscal year 1900 1905 1906 1907 1910 1911 1912 (gross) $1.92 1.78 1.53 1.68 1.69 1.72 1.89 1.88 1.72 Maintenance Conducting Train Rate per mile per revenue transportation mile train mile per revenue earnings Per Per train mile (net) passenger ton Way Equipment $.160 .168 .152 .192 .215 .210 .207 .216 .204 570 .740 .565 .597 .493 .592 .725 .644 .529 .0233 .0235 .0227 .0198 .0195 .0192 .0192 .0206 .0091 .0090 .0087 Freight Train Freight Passenger, density load to all freight revenue traffic and tons company cars $.862 $.0241 $.0097 489,466 520,031 555,275 625,176 538,340 550,958 615,863 672,233 625,887 276 234 225 233 245 251 274 t Includes treasury stock upon which no dividends [ 232 ] 70% 70 ; paid. 10,608 12,029 12,483 12,490 13,036 13,038 12,238 12,533 12,098 BOND DESCRIPTIONS Following are descriptions of the bond issues of the Chicago, St. Paul, Minne- apolis & Omaha Railway System, together with the bases upon which they have sold during the decade ending December 31, 1912: CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY Consolidated Mortgage 6s & 3 ^ 2s Dated June 1, 1880 Maturing June 1, 1930 Interest payable June 1 and December 1 at the Company's office. Ill Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $30,000,000 Outstanding (6s) $16,697,000 (3Ks) 3,734,000 Per mile .... 12,205 Provisions of Of the $30,000,000 authorized, $20,431,000 are outstanding as above, $7,766,000 are reserved issue: to retire prior liens, $1,801,954 are reserved for additions and betterments at not exceeding $15,000 per mile, and $1,046 are in the treasury of the company. Security: These bonds are secured by a direct mortgage on 1,674.23 miles of road, and property and equipment of the same. They are secured by a first mortgage on 661.39 miles, covering many important branch lines in Nebraska and Wisconsin. They are further secured by a second mortgage on 1,012.84 miles covered by the first lien of the Chicago, St. Paul & Minneapolis First 6s of 1918, the St. Paul & Sioux City First 6s of 1919, the North Wisconsin First 6s of 1930, in part by the Superior Short Line First 5s of 1930, and the Sault Ste. Marie & Southwestern First 5s of 1915. Of these prior liens, the Chicago, St. Paul, Minneapolis & Omaha First 6s of 1918, the St. Paul & Sioux City First 6s of 1919, and the Northern Wis- consin First 6s of 1930 will be retired by bonds of the above issue, at which time the property under the former will become a first mortgage under the latter. Trustee: Central Trust Company, New York. The Consolidated Os of 1930 sold in 1902 on a 3.i 1902 on a 3.60 to 3.95 basi> 1903 3.80 4.20 1904 3.85 4.10 1905 3.62 3.87 1906 3.70 4.05 1907 3.95 4.70 1908 3.85 4.50 1909 3.85 4.10 1910 4.00 4.27 1911 4.05 4.22 1912 4.10 4.37 The Consolidated 3}/^s of 1930 sold in 1903 on a 3.75 to 3.95 basis 1909 4.00 4.20 1910 4.25 (bid) 1911 4.20 (bid) 1912 4.37 These bonds are considered a legal investment for savings banks in IMassachusetts, New Hampshire, Vermont, Connecticut and Rhode Island. [ 234 J SAULT STE. MARIE & SOUTHWESTERN RAILWAY First Mortgage 5s Dated November 1, 1890 Maturing November 1, 1915 Interest payable May 1 and November 1 at the Company's office. 111 Broadway, New York. Coupon bonds of $1,000. Authorized .$400,000 Outstandmg $350,000 Per mile . . 9,459 Provisions of Of the $400,000 authorized. $50,000 are owned by the company, and $350,000 are in the hands issue: of the public as above. Security: These bonds are secured by a first mortgage on the line from Fairchild to Mondovi, Wis., a distance of 36.75 miles; also on equipment and future acquisitions. The bonds have been ASSUMED by the Chicago, St. Paul, Minneapolis & Omaha Railway Company. Equity: This issue is prior in lien to the Chicago, St. Paul, Minneapolis & Omaha Consolidated 6s and 33^8 of 1930. Trustee: Farmers' Loan & Trust Company, New York. The Sault Ste. Marie & Southwestern Railway was chartered March 29, 1886, under the laws of the State of Wisconsin. In 1890 the line was opened for traffic, and in 1893 the property was merged into the Chicago, St. Paul, Minneapolis & Omaha Railway Company, having hitherto been operated as a proprietary of the latter. At the time of the merger the above bonds were assumed by the Chicago, St. Paul, Minneapolis & Omaha Railway Company. These bonds were quoted in 1909 on a 4.4;^ basis (bid) 1910 4.75 1911 4.60 December, 1912 5.00 The above issue is considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 235 ] CHICAGO, ST. PAXIL & MINNEAPOLIS RAILWAY First Mortgage 6s Dated May 9, 1878 Maturing May 1, 1918 Interest payable May 1 and November 1 at the Company's office, 111 Broadway, New York. Coupon bonds of $500 and $1,000, registerable as to principal. Authorized $3,000,000 Outstanding $1,080,000 Per mile . . 6,545 Provisions of Of the $3,000,000 authorized, $1,080,000 are in the hands of the public as above, and the issue: balance, $1,920,000, have either been retired by the sinking fund, or exchanged for the Chicago, St. Paul, Minneapolis & Omaha Consolidated 6s of 1930 under a conversion clause which pro- vides for an exchange at par. Security: The above bonds are secured by a first mortgage on 177.6 miles of the company's road, ex- tending from Elroy, Wis., to the east bank of the St. Croix River near Hudson. They are further secured by a first mortgage on the company's equipment and property, and a second mortgage on all land grants, not used for railroad purposes, now owned or hereafter acquired. These bonds have been ASSUMED by the Chicago, St. Paul, Minneapolis & Omaha Railway Company. The latter's Consolidated 6s and 3j^s of 1930 have been reserved in part to retire this issue. The Chicago, St. Paul & Minneapolis Railway was chartered under the laws of Wisconsin in 1863 as the successor to the West Wisconsin Railway Company. Its line was opened for traflBc December 1, 1872. Upon default of payment of its bond issue in January, 1875, the road's prop- erty was sold under foreclosure in March, 1878, when it was reorganized under its present title. It was consolidated in 1880 with the North Wisconsin Railway Company, forming the Chicago, St. Paul, Minneapolis & Omaha Railway Company. These bonds sold in 1902 on a 2.80 to 3.20 basis 1903 2.95 3.40 1904 3.05 3.37 1905 2.70 3.10 1906 2.60 2.90 1907 3.00 4.00 1908 2.60 3.30 1909-12 under 3.00 These bonds are considered a legal investment for savings banks in New England. [ 236 ] NORTH WISCONSIN RAILWAY First Mortgage 6s Dated January 1, 1880 Maturing January 1, 1930 Interest payable January 1 and July 1 at the Company's office. 111 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $800,000 Outstanding $616,000 Per mile . . 3,480 Provisions of Originally these bonds were authorized at $10,000 per mile. This was limited to $800,000 as issue: above. Besides those outstanding, $184,000 have been exchanged for Chicago, St. Paul, Mimieapolis & Omaha ConsoUdated 6s of 1930 under a conversion clause which provides for an exchange at par. Security: These bonds are secured by a first mortgage on the Company's line from Bayfield to the St. Croix River, Wis., 177.51 miles. They are further secured by a first mortgage on the equip- ment of the line and future acquisitions. Land grants are not included in the mortgage. These bonds have been ASSUMED by the Chicago, St. Paul, Mmneapolis & Omaha Rail- way Company. The latter's Consolidated 6s of 1930 have been reserved in part to retire this issue. Trustee: Central Trust Company, New York. The construction of the North Wisconsin Railway was commenced in 1871, and the company's line was opened to Granite Lake, Wisconsin, in 1878. It was operated by the Chicago, St. Paul & Minneapolis Railway and was merged with it, forming the Chicago, St. Paul, Minneapolis & Omaha Railway in 1880. These bonds sold in 1902 on a 3.70 to 3.80 basis 1903 4.35 1904 4.12 1909 3.90 1910 4.25 (bid) 1911 4.22 (bid) December, 1912 4.45 (bid) These bonds are considered a legal investment for savings banks in New England. [ 237 ] ST. PAUL & SIOUX CITY RAILROAD First Mortgage 6s Dated July 1, 1879 Maturing April 1, 1919 Interest payable April 1 and October 1 at the Company's office. 111 Broadway, New York. Coupon bonds of $1,000, registerable as to jM-inci]jal. Authorized $7,000,000 Outstanding $6,070,000 Per mile . . !),93,5 Security: These bonds are secured by a first mortgage on 610.98 miles of road, including the line from St. Paul, Minn., to Le Mars, la., 241.49 miles, and from Ponca via Sioux City to Omaha, Neb., 139.39 miles. This issue has been ASSUMED by the Chicago, St. Paul, Minneapolis & Omaha Railway Company. Equity: The above bonds are prior in lien to the Chicago, St. Paul, Minneapolis & Omaha Consoli- dated 6s and sy2S of 1930, a sufficient number of which have been reserved to provide for the retirement of this issue. Trustee: Central Trust Company, New York. The St. Paul & Sioux City Railroad was chartered under the laws of tlie State of Minnesota, March 2, 1855, and again on March 4, 1864. The road was opened for traffic in November, 1870, and in 1880 it was consolidated with the Chicago, St. Paul, Minneapolis & Omaha Railway Company, at which time the latter assumed all its funded indebtedness. These bonds sold in 1902 on a 3.57 to 3.95 basi.- 1903 3.77 4.17 1904 3.85 4.17 1905 3.65 3.90 1906 3.62 4.05 1907 3.80 4.87 1908 3.95 4.22 1909 3.90 4.25 1910 4.05 4.40 1911 4.20 4.35 1912 4.12 4.50 These bonds are considered a legal investment for savings banks in New England. [ 238 ] SUPERIOR SHORT LINE RAILWAY First Mortgage 5s Dated June 1, 1895 Maturing June 1, 1930 Interest payable March 1 and September 1 at New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,500,000 Outstanding $1,500,000 Security : These bonds are secured by a first mortgage on ten miles of main track and thirty -three miles of side track; on lands in Superior and Duluth, and on wharves, buildings, equipment, etc. These bonds have been ASSUMED by the Chicago, St. Paul, Minneapolis & Omaha Rail- way Company. Equity: This issue is prior in lien to the Consolidated 6s and 33^s of 1930. Trustee: Union Trust Company, New York. On August 1, 1895, the property of the Superior Short Line Railway Company was conveyed by deed to the Chicago, St. Paul, ^linneapolis & Omaha Railway Company. At that time the latter assumed the above bonds. These bonds were quoted in 1911 on a 4.37 basis (bid) December, 1912 4.25 These bonds are considered a legal investment for savings banks in Maine and New Hampshire. CHICAGO, ST. PAUL, MINNEAPOLIS & OMAHA RAILWAY Debenture 5s Dated March 1. 1912 Maturing March 1, 1930 Interest payable March 1 and September 1 at New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Coupon and registered bonds interchangeable. Authorized $15,000,000 Outstanding $5,000,000 Provisions of Of the amount authorized, $5,000,000 are outstanding as above, and $10,000,000 have been issue: reserved for additions and betterments. Security: These bonds are not secured by a mortgage, but are a direct obligation of the Chicago, St. Paul, Minneapolis & Omaha Railway Company. The indenture of this issue provides that no increased mortgage debt shall be created or issued by the com]>any without equally secur- ing these bonds with such additional bonds as may be issued. Trustee: Central Trust Company, New York. These bonds were offered to the public early in 1912 on a 4.55 basis. These bonds are considered a legal investment for savings banks in New Hampshire. [ 239 ] DELAWARE AND HUDSON COMPANY DELAWARE AND HUDSON COMPANY HISTORY The Delaware & Hudson Company is one of the oldest, if not the oldest, organization of its kind in the country. It was chartered by the New York Legislature, April 23, 1823, as the Delaware & Hudson Canal Company, to construct a canal from the coal fields of Pennsylvania to the Hudson River at Rondout, New York. This canal was completed and opened for service in October, 1828. At that time a narrow gauge railroad, to serve as a feeder to the canal, was under construction. This road was known as the "Gravity RaUroad," and was completed in 1829. It was not until 1899 that the canal was sold. The "Gravity Railroad" was then broadened to standard gauge, made an ordinary steam railroad, and thrown open for passenger and freight business in 1900. Since that time several lines have been acquired through consolidation or otherwise. The Adirondack Railway from Saratoga to North Creek, New York, 57 miles, was formally absorbed by this company on November 5, 1902, and the Schenectady & Duanesburgh Railroad on August 4, 1903. In July, 1903, the company acquired the entire capital stock of the Cooperstown & Charlotte Valley Railroad Company, and assmned the operation of its line and its leased property, the Cooperstown & Susquehanna Valley Railroad. The New York & Canada Railway Company was merged with the Delaware & Hudson Company May 23, 1908, and the Cherry Valley, Sharon & Albany Railroad Company on July 17, 1908. Besides these consolidations, the Delaware & Hudson Company is operating the following com- panies' lines under lease: Albany & Susquehanna Railroad On February 24, 1870, the road was leased for the term of its charter at a yearly rental equivalent to interest on its fimded indebtedness and dividends at the rate of 7% until July, 1902, and thereafter at the rate of 9% per annum. In June, 1906, a suit was instituted by the Albany & Susquehanna Company against the Delaware & Hudson Company', claiming that the former should have the benefit of the sav- ing of interest made upon the refunding, in 1876 and agam in 1906, of $3,450,000 of the old Albany & Susquehanna 7% Mortgage Bonds, the interest on which is paid by the Dela- ware & Hudson Company, the lessee, as part of the rental. The United States Circuit Court decided in favor of the Albany & Susquehaima Company, and this decision was affirmed by the United States Supreme Court to which the Delaware & Hudson Company took the case. Under the judgment, the latter paid $1,350,512 as back rentals into the treasury of the Albany & Susquehanna Railroad Company in 1909. Albany & Vermont Railroad This railroad was leased in perpetuity to the Rensselaer & Saratoga Railroad Company. This lease was assigned to the Delaware & Hudson Company May 1, 1871. The annual rental is $20,000. Rensselaer & Saratoga Railroad This road was leased in perpetuity to the Delaware & Hudson Company May 1, 1871, the lessee assuming all interest and leased obligations, and guaranteeing 8% per annum on the [ 243 ] capital stock. On August 10, 1906, the Glens Falls Railroad Company, whose line ex- tends from Fort Edward to Caldwell, New York, 15 miles, was merged with this company. The Rutland & Whitehall Railroad and the Saratoga & Schenectady Railroad Companies were leased to the Rensselaer & Saratoga Railroad Company prior to its lease to the Delaware & Hudson Company. Chateaugay & Lake Placid Railway This companj''s property was leased to the Delaware & Hudson Company from July 1, 1903, to December 31, 2403, at a rental for the first Hve years equivalent to the surplus earnings of the property. Northern Coal & Iron Company This property was leased December 1, 1873, during the fidl term of charter or any renewal thereof, to the Delaware & Hudson Company, which owns the entire capital stock. The Delaware & Hudson Company also leases the Rome & Clinton Railroad and the Utica, Clinton & Binghamton Railroad Companies, but they are sublet to the New York, Ontario & Western Railway Company for a term of thirty -five years from June 1, 1886. The Delaware & Hudson Company controls, through stock ownership, the Greenwich & John- sonville Railway Company, operating 31 miles of road in New York State; the Napierville Junction Railway Company, operating a line from St. Constant Junction, Canada, to Rouse's Point, New York, 27 miles; the Quebec, Montreal & Southern Railway, operating 192 miles in Canada; and the Schoharie Valley Railway Company. The company also owns a half interest in the stock of the Schenectady Railway Company and the entire capital stocks of the Plattsburg Traction Company and the Troy & New England Railway Company. It has gone quite extensively into the electric traction business, owning the entire capital stock of the United Traction Company, which operated, June 30, 1911, over 90 miles of electric lines in Albany, Troy, and the vicinity. The latter company, in turn, controls the Hudson Valley Railway, which operates 118 miles of electric road from Troy, New York, northerly to War- rensburg. Besides this, the United Traction Company controls through lease several important electric traction <'ompanies, including the Cohoes Railway Company, the Troy & Lansingburgh Railroad and I lie Waterford & Cohoes Railroad Company. During 1 !)()!) tiie Delaware & Hudson Company purchased the entire capital stock of the Fort William Henry Hotel Company. This property consisted of about twenty acres of land, a simimer hotel and outbuildings, situated in the Village of Lake George, New York, at the point of interchange of traffic between the company's line and the boats of the Lake George Steamboat Company. On June 24, 1909, as it was about to open for the season, the hotel and its contents were totally destroyed by fire. Another disastrous fire occurred to the railroad's hotel property in the total destruction. May 25, 1910, of the Hotel Champlain, located at Bluff Point, New York. Both these properties were rebuilt of fireproof material and modern construction, and were open for tourist business during the summer season of 1911. COAL DEPARTMENT A history of the Delaware & Hudson Company would be incomplete without some mention of the valuable coal lands and mining rights which it controls. On the general balance sheet of the company for the fiscal year ending December 31, 1911, the coal owned and controlled was valued at $16,667,697, and it is estimated that at present there are nearly 600,000,000 tons of such coal unmined. Following is a table of the total number of tons minctl by the Delaware & Hudson Company, [ 244 ] also the number of tons mined in the entire region, together with the net earnings (exchiding taxes) resulting from the operation of the coal department, for the years 1905 to 1911 inclusive: Year Total tons mined Xet earnings * By the company In entire region 1905 5,695,493 61,410,201 $2,525,957 1906 5,401,389 55,698,595 1,209,519 1907 6,623,508 67,109,393 1,173,205 1908 6,526,871 64,665,014 1,145,418 1909 6,199,042 61,969,885 507,875 1910 6,647,659 64,905,786 358,662 1911 7,280,939 69,954,299 284,219 To comply strictly with the terms of the Commodities Clause of the Hepburn Law, the company on June 1, 1909, made a contract with the Hudson Coal Company by which the latter purchases outright, at the pit-mouth, the entire output of the company's mines. PROPERTY For the fiscal year ending December 31, 1911, the Delaware & Hudson Railroad operated an average of 877.6 miles, of which 790.23 miles were owned or leased and 87.37 miles were operated under trackage rights. The lines of the system extend from Wilkes-Barre, Pa., on the south, through central and northern New York, including Schenectady, Albany, Saratoga Springs and Plattsburg, across the Canadian Line to Montreal and Quebec. There are many important branches which feed the main line of this road, notably the Honesdale, Binghamton, Rutland, Lake Placid and the Noyan Junction Branches. The bulk of the mileage of the system lies in New York State, the population of which increased from 5,998,853 in 1890, to 9,113,614 in 1910. CAPITALIZATION The annual report for the fiscal year ending December 31, 1911, shows the capitalization of the Delaware & Hudson Company to be apjiroximately as follows: Capital stock $42,503,000 Fimdeddebt 58,375,000 Nominal capital $100,878,000 Rentals capitalized® 5% 40,458,500 Gross capitalization $141,336,500 Securities owned 27,014,189 Net capitalization $114,322,311 Net capital per mile operated $130,355 Average miles operated 87.76 Net income to net capital 9.2% Fixed charges to net income 50.0% Margin of safety 50.0% * The figures in this cohimn are carried into the income account of the Dehiware & Hudson Company as "Other income." Taxes and additions to property necessary to the coal department are included with the taxes and construction charges of the railroad. [ 245 ] The company earned a total net income equivalent to 9.2% on its net capitalization. This figure is substantially higher than that shown by either the New York Central or the Pennsylvania, but compares much less favorably with the figures of the Lackawanna and the Lehigh Valley. The Lackawanna's net capitalization for 1911 was reported at slightly under $154,000 per mile, upon which a net income of 15.4% was earned, while the Lehigh Valley reported a net capitalization of but $72,250 per mile, and net income to net capital of above 15%. The showing of the Delaware & Hudson is, however, very satisfactory. A figure of especial interest to bondholders is that known as the "margin of safety." The company's surplus over charges in 1911 represented 50% of its total net income. During the decade its average was much higher, being 55% as compared with 61% for the Lackawanna and 48% for the Lehigh Valley. CHARACTER OF TRAFFIC The Delaware & Hudson Company is primarily a "coal road." Over 80% of the total traffic of the road is freight, and of this over 65% represents mine products. Below is a classification of the freight tonnage of the road, showing the ratios of the various classes of freight for the years 1907 to 1911 inclusive: Products of 1911 1910 1909 1908 1907 Agriculture 5.10% 5.21% 5.76% 4.50% 4.47% Animals 1.11 .93 1.21 1.19 1.22 Mines 65.56 64.79 62.70 69.31 68.39 Forests 4.41 4.76 5.48 4.48 4.52 Manufactures 14.05 13.89 14.22 12.54 13.57 Miscellaneous 9.77 10.42 10.63 7.98 7.83 Following are some of the more important freight statistics of the Delaware & Hudson Company for the five years ending 1911, showing the freight density and train load for the period, also the revenues from coal traffic and merchandise traffic: Year ' Freight Train Coal frfijjht Merchandise Average density load tons earnings freight rate per ton earnings per mile 1907 2,972,525 452 $9,081,664 $7,533,168 $.0066 1908 2,525,548 398 9,106,819 6,162,180 .0071 1909 2,834,815 415 8,311,478 7,691,617 .0067 1910 2,913,213 432 8,724,580 8,052,705 .0068 1911 2,974,404 467 9,847,194 8,027,413 .0068 It will be seen that with the falling off m freight density there was a corresponding decline in train load in 1908, but the increase in the average rate per ton per mile helped to offset this loss. Since 1908, however, there has been a marked increase in freight density and average train load. In the face of somewhat lower rates the volume of earnings also has shown an increase. The average freight density for the ])eriod, also the average train load and freight rate per ton, are given below for the Delaware & Hudson, Lackawanna and the Lehigh Valley : Five years Average Average Average freight train rate per density load tons ton per mile D. & H 2,844,101 433 $.0068 Lackawanna 4,235,357 529 .0077 Lehigh Valley 3,271,700 535 .0064 [ 246 ] Of the total gross business of the railroad in 1911, 14% represented passenger traffic. In 1907 the ratio was the same. The small increases in passenger density from year to year have been very nearly offset in earnings by a steady decline in the average rate per passenger, as is shown by the following table: Year Passenger Passenger Average rate density earnings per passenger per mile 1907 162,940 $2,945,408 $.0214 1908 150,277 2,693,672 .0212 1909 159,991 2,834,628 .0210 1910 167,210 2,910,026 .0206 1911 165,730 2,967,129 .0204 EARNINGS The following table, compiled from the annual reports of the comjKiny for the five years ending 1911, shows the gross and net earnings based on the average miles operated: Year Average miles Gross earnings Per mile Net earnings Per mile operated 1907 845 $20,175,793 $23,877 $8,046,713 $9,524 1908 845 18,500,731 21,894 7,689,010 9,099 1909 843 19,525,859 23,162 8,067,380 9,570 1910 843 20,431,800 24,237 8,233,513 9,768 1911 877 21,421,816 24,426 8,663,657 9,880 The gross earnings of 1907 were the largest that the company had ever reported. Since that time they have remained very steady. The 1911 gross earnings were 6.1% greater than those re- ported in 1907. Net earnings during the period proved more stable, being 7.6% larger in 1911 than in 1907, which was the high record up to that time. During the business depression in 1908 gross earnings were reduced nearly $1,700,000. At the same time operating expenses were cut $900,000, leaving a net decrease for the year of nearly $800,000. In 1909 gross earnings increased slightly over $1,000,000 and operating expenses $640,000, resulting in a gain in net earnings of nearly $380,000. In 1910 gross earnings reached a somewhat higher level than those of 1907, but this gain was very nearly oti'set by increases in operating expenses, so that the net gain was but $160,000. The saving feature of the earnings record of 1911 was the gain, nearly $1,125,000, in revenue from coal traffic. While net earnings showed a gain of but $430,000, owing to a decline in earnings from merchandise freight and miscellaneous sources of $215,000, and an increase in operating expenses of nearly $560,000, the fact remains that the earnings of 1911, both gross and net, were the best the company had ever known. 247 ] MAINTENANCE The Delaware & Hvidson Company is liberal in its maintenance charges. During the five years ending 1911, the company spent for upkeep an average of $4,861 per mile of road operated. Tabu- lated below are the amounts spent for maintenance in the years 1907 to 1911 inclusive: Year Maiutenauce of ToUil maintenance Per mile Way Equipment 1907 $1,836,871 $2,336,273 $4,173,144 $4,938 1908 1,417,318 2,219,543 3,636,861 4,304 1909 1,334,546 2,598,566 3,933,112 4,666 1910 1,557,912 2,842,069 4,399,981 5,219 1911 1,488,756 3,060,739 4,549,495 5,187 A comparison of the Delaware & Hudson with the Lackawanna, and the Lehigh Valley, together with the average traffic densities of the three roads in question, is given below: Five years Average Average traffic maintenance density per mile D. & H 3,005,330 $4,861 Lackawanna 4,848,890 10,950 Lehigh Valley 3,441,794 6,527 From the table above, it would seem that the Lackawanna, with an average traffic density 61% greater than that of the Delaware & Hudson, was spending 125% more than the latter during the ])eriod in question. On the other hand, the Lehigh Valley, with a traffic density 14% greater, was spenduig 34% more. This places the Delaware & Hudson Company in a slightly unfavorable rela- tive position, but the Hudson's charges to maintenance are probably more than adequate. ADDITIONS AND BETTERMENTS The Delaware & Hudson Company reports in its balance sheetof December 31, 1911, $6,751,837 set aside from earnings for additions and betterments to property subsequent to June 30, 1907. The following additions and betterments were made during the four years indicated: ^ear Additions and betterments to Coal property Railroad property 1908 $650,283 $1,179,494 1909 726,313 720,459 1910 766,673 697,746 1911 823,654 2,681,387 $2,966,923 $5,279,088 2,966,923 Total additions and betterments $8,246,011 DIVIDENDS The company has a splendid dividend record. From the date of its organization, in 1826, to December 31, 1911, this company has paid a total of 206 cash dividends, aggregating 641%, or $103,033,206. Following is the dividend record of the company from 1881 up to the present time: I ^^48 J Year Rate 1881 41^% 1882-4 7 1885 6 1886-7 5 1888 6 1889-96 7 1897-1900 5 1901-6 7 1907-12 9 Besides the above-mentioned cash dividends, the conijiany has paid the following dividends in the form of stock : Year Hate Auiuunt 1845 25% $480,500 1856 4 288,000 1864 16% 1,250,000 1865 142/7 1,250,000 1868 20 2,000,000 1890 5% 1,375,000 The Profit and Loss Account of the Delaware & Hudson Company, appearing on the balance sheet of December 31, 1911, was $13,486,597, or 31.7% of the outstandmg capital stock. STATISTICS Following are the capitalization, earnings, and traffic statistics of the Delaware & Hudson Com- pany, based on the average miles operated, for the years 1905 to 1911 inclusive: I 249 THE DELAWARE & HUDSON COMPANY Fiscal Capital Funded Rentals Gross Owned by Net Average Extra year stock debt $10,439 ©5% capital company capital miles operated 843 track 1905 $48,564 $63,255 $122,261 $15,055 $107,206 303 1906 48,623 26,631 60,382 135.636 28,486 107,150 843 301 1907 50,177 37,961 55,074 143,212 38,110 105,102 845 330 1908 50,177 53,297 44,914 148,388 27,649 120,739 845 344 1909 50,415 61,779 49,258 161,452 27,982 133,470 843 344 1910 50,417 61,192 48,518 160,127 28,432 131.695 843 344 1911 48,464 66,562 46,132 161,158 30,803 130,355 877 368 Fiscal Gross Maintenance Transportation Net Other Total net Fixed Surplus avail- year operating Way Equipment and general operating mcome income charges able for revenue $19,435 $1,731 expense revenue $2,996 $3,996 dividends 1905 $2,236 $8,113 $7,355 $10,351 $6,355 1906 20,225 1.647 2,392 8,618 7.568 3.102 10,670 4,846 5,824 1907 23.877 2,173 2,765 9,415 9.524 3,127 12,651 5,415 7,236 1908 21,894 1,677 2,627 8.491 9.099 3.136 12,235 6,017 6,218 1909 23,162 1,583 3,083 8.926 9.570 2.751 12,321 6.165 6,156 1910 24,237 1,848 3,371 9.250 9.768 2.884 12,652 6.328 6,324 1911 24.426 1,697 3,480 9.359 9.880 2,134 12,014 6,041 5,973 Fiscal Dividends Other Surplus Total main- Conducting Fixed Gross Net Per cent year charges expenses tenance to transporta- charges earnings income earned to income to gross gross tion to gross to gross to gross on capital carnmgs earnings earnings earnings 20.5% capital 15.8% capital 9.6% stock 1905 $3,404 $1,219 $1,732 62.1% 20.3% 41.8%, 13.08% 1906 3,401 172 2,251 62.5 19.9 42.6 23.9 14.8 9.9 11.97 1907 4,514 2,722 60.0 20.0 39.4 22.7 16.6 12.0 15.25 1908 4,634 1,584 58.4 19.7 38.7 27.4 14.5 10.1 12.39 1909 4,538 1,618 .58.4 19.9 38.5 20.2 14.3 9.2 12.22 1910 4,538 1,786 59.6 21.5 38.1 26.1 15.1 9.6 12.54 1911 4,362 1,611 59.5 21.2 38.3 24.7 15.1 9.2 12.32 Fiscal year Train mile earnings (gross) Maintenance per revenue train mile Way Equipment $.186 $.240 Coiiductmg transportatioE per revenue train mile $.818 Train mile earnings (net) Kate per mile Per Per passenger ton $.0217 $.0062 Freight density Train load revenue tons 455 Freight to all traffic Passenger, freight & company cars 1905 $2.09 $.846 2,500,234 80% 13,879 1906 2.11 .172 .249 850 839 .0214 .0063 2,550,934 460 80 14,997 1907 2.33 .218 .273 864 975 .0214 .0066 2,972.525 452 82 22,939 1908 2.27 .174 .272 881 943 .0212 .0071 2,525,548 398 82 22,775 1909 2.31 .158 .307 891 954 .0210 .0067 2,834,815 415 82 22,449 1910 2.43 .185 .337 928 980 .0206 .0068 2,913.213 432 82 22,069 1911 2.57 .178 .367 985 1 040 .0204 .0068 2,974,404 467 83 21.348 [ 250 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Delaware & Hudson System, together with the bases upon which they have sold during the decade ending December 31, 1912: DELAWARE & HUDSON CANAL COMPANY Pennsylvania Division First Mortgage Currency 7s Dated September 1, 1877 Maturing September 1, 1917 Interest payable March 1 and September 1 at 32 Nassau Street, New York. Coupon bonds of $1,000. Five coupon bonds exchangeable for a $5,000 registered bond. Authorized $5,000,000 Outstanding $5,000,000 Per mile . . 102,041 Security: These bonds are a direct obHgation of the Delaware & Hudson Company, and are secured by a first mortgage on 48.75 miles of the company's road, including the lines from Carbondale to Scranton, Pa., 17 miles, and Lookout Junction to Honesdale, Pa., 28 miles. They are further secured by a mortgage upon the coal lands and other property of the company in the counties of Lucerne, Wayne and Susquehanna, Pa. Equity: The above bonds are prior in lien to the Delaware & Hudson First & Refunding 4s of 1943, a sufficient number of which have been reserved to retire this issue. Trustee: Union Trust Company, New York. On April 28, 1899, the name of the Delaware & Hudson Canal Company was changed to the Delaware & Hudson Company. These bonds sold in 1902 on a 3.25 to 3.50 1903 3.60 3.70 1904 3.40 3.70 1905 3.45 3.50 1906 3.37 1908 3.90 4.10 1909 3.80 4.25 1910 3.60 3.75 1911 3.95 4.05 December, 1912 4.62 (bid) These bonds are consitlered a legal investment for savings banks in New England. [ 252 ] ADIRONDACK RAILWAY First Mortgage Gold 4V2S Dated March 1, 1892 Maturing March 1, 1942 Interest payable March 1 and September 1 at 32 Nassau Street, New York, Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $2,000,000 Outstanding $1,000,000 Per mile . . 17,540 Provisions of The limit of this issue has been placed at the amount at present outstanding, by the terms of issue: the Delaware & Hudson First & Refunding Mortgage 4s of 1943. It is further stipulated that these bonds shall not be extended at maturity. Security: The above bonds are secured by a first mortgage on the company's line from Saratoga to North Creek, N. Y., 57 miles. They are further secured by a mortgage on the company's lands, buildings, and equipment and future acquisitions. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware & Hudson Canal Company by endorsement. Equity: The above bonds are prior in lien to the Delaware & Hudson First & Refunding 4s of 1943, a sufficient number of which have been reserved to retire this issue. Trustee: United States Trust Company. New York. The Adirondack Railway Company was incorporated under the laws of the State of New York on July 7, 1882, as the successor to the Adirondack Company whose property was sold under fore- closure, September 28, 1881. In 1889 the Delaware & Hudson Canal Company purchased a con- trolling interest in this company and it was foniially merged into the Delaware & Hudson Com- pany, November 5, 1902. These bonds were quoted in 1909 on a 4.25 basis (bid) 1910 4.50 1911 4.35 December, 1912 4.50 These bonds are considered a legal investment for savings banks in New England. 253 ] SCHENECTADY & DUANESBURGH RAILROAD First Mortgage 6s Dated September 1, 1874 Maturing September 1, 1924 Interest payable March 1 and September 1, at 32 Nassau Street, New York. Coupon bonds of $100, $500 and $1,000, Authorized $500,000 Outstanding $500,000 Per mile . . 35,714 Security : The above bonds are secured by a first mortgage on the company's line from Schenectady to Duanesburgh, New York, 13.79 miles. They are further secured by a mortgage on the com- pany's lands, buildings, equipment, etc. These bonds are GUARANTEED as to INTEREST by the Delaware & Hudson Company by endorsement. Equity: The above bonds are prior in lien to the Delaware & Hudson First & Refunding 4s of 1943, a sufficient number of which have been reserved to retire this issue. The Schenectady & Duanesburgh Railroad was incorporated in July, 1873, under the laws of the State of New Y'ork, as the result of a reorganization of the Schenectady & Susquehanna Railroad. It was leased to the Delaware & Hudson Canal Company for the interest on its bonds, which amounted to $30,000 annually. On August 4, 1903, it was merged into the Delaware & Hudson Company. These bonds were quoted in 1909 on a 4.45 basis (bid) 1910 4.55 1911 4.65 December, 1912 4.45 These bonds are considered a legal investment for savings banks in New England. DELAWARE & HUDSON COMPANY First and Refunding Mortgage Gold 4s Dated May 1, 1908 Maturing May 1, 1943 Interest payable May 1 and November 1 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and multiples. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $27,704,000 Per mile . . 87,120 Provisions of Besides the amount outstanding as above, $6,500,000 of these bonds have been reserved to issue: retire prior liens, and the balance, $15,796,000, has been reserved for general corporate pur- poses, such as construction, acquisition, improvements, etc. [ 254 ] Security: The above bonds are a direct obligation of the company, and are secured by a direct mortgage upon 317.8 miles of road, leasehold interests in 435.75 miles, and trackage rights in 56.6 miles. They are also secured by a direct lien on all the lands, real estate, and property of the company, together with equipment now owned or hereafter acquired. These bonds are secured by a first mortgage on 198.29 miles of road, including the line from Whitehall to Rouse's Point, N. Y., 113 miles. They are secured by a second mortgage on 119.5 miles of road covered by the first lien of the Delaware & Hudson Canal Company 7s of 1917, the Adirondack 4^3 of 1942 and the Schenectady & Duanesburgh 6s of 1924 They are also a first lien upon leasehold interests in 435.75 miles, including the lines of the Albany & Susquehanna Railroad from Albany to Binghamton, N. Y., 143 miles; the line of the Albany & Vermont Railroad from Albany to Waterford Junction, N. Y., 12.18 miles; and the mileage of the Chateaugay & Lake Placid Railway, Plattsburg & Dannemora Railroad, Rensselaer & Saratoga Railroad, etc., and trackage rights over the Erie Railroad totalling 56.6 miles. Redemption: These bonds are redeemable as a whole at 107}/^ and interest on May 1, 1918, or any interest date thereafter, upon thirteen weeks' notice. Sinking fund : The company has provided a sinking fund for this issue whereby the trustee is paid annually, beginning June 1, 1909, a sum equal to 1% of the bonds outstanding, to be used by the trustee at the direction of the company, either for the purchase of bonds issued or for construction, additions and betterments to the property mortgaged hereunder. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1908 on a 3.87 to 3.95 basis 1909 3.85 4.00 1910 3.97 4.12 1911 3.97 4.12 1912 4.02 4.15 These bonds are considered a legal investment for savings banks in New England. DELAWARE & HUDSON COMPANY Equipment Debenture Gold 4s Dated January 1, 1900 Maturing $200,000 annually January 1, 1902, to 1913 $100,000 January 1, 1914 Interest payable January 1 and July 1 at 32 Nassau Street, New York. Registered bonds of $10,000. Authorized $2,500,000 Outstanding $500,000 $2,000,000 of these bonds have been retired up to the present time. Security : The above bonds are a direct obligation of the company, but are not secured by a mortgage, although issued for the purchase of 1,000 gondola cars, 1,000 box cars, and 42 locomotives. These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 255 ] DELAWARE & HUDSON COMPANY Convertible Ten-Year Debenture Gold 4s Dated June 15, 1906 Maturing June 15, 1916 Interest payable June 15 and December 15 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $14,000,000 Outstanding $13,973,000 $27,000 of these bonds have been converted into stock of the company. Security : The above bonds are a direct obligation of the company, but are not secured by a mortgage. $10,000,000 of these bonds were issued to purchase the entire capital stock of the Union Trac- tion Company of Albany, N. Y., and oue-half interest in the Schenectady Railway. $2,400,000 of the proceeds of this issue were used to purchase new equipment, and $1,600,000 were spent in constructing the cut-off around Wilkes-Barre, Pa. Convertibility: The privilege of exchanging a $1,000 bond of this issue for five shares (par value $100) of the capital stock of the Delaware & Hudson Company, at par, ends June 15, 1912. Registrar: National Bank of Commerce, New York. These bonds sold in 1906 on a 2.50 to 3.30 basis 1907 2.75 5.75 1908 3.27 4.85 1909 2.75 4.00 1910 3.62 4.65 1911 4.00 4.80 1912 4.30 4.90 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. DELAWARE & HUDSON COMPANY First Lien Equipment 4l'>s Dated June 1, 1907 Maturing July 1, 1922 Interest payable January 1 and July 1 at the Company's office, 32 Nassau St., New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $10,000,000 Outstanding $9,698,000 $302,000 of these bonds have been retired by the sinking fund. Security: These bonds are a direct obligation of the company. They are secured by a first mortgage upon equipment, including composite hopper coal cars, steel underframe platform cars and steel underframe box cars, certified to have cost over $11,000,000. r 256 1 The Delaware & Hudson Company agrees to keep the equipnaent in complete repair; to renew and replace worn out, lost or destroyed equipment; and to keep it insured against fire loss or damage, or other loss, to an amount equal to 80% of the value. The equipment remains the property of the United States Mortgage & Trust Company until these bonds are paid. Sinking fund : The company has provided a sinking fund for this issue, whereby the trustee is paid annually, beginning July 1, 1908, the sum of $650,000 to be used at the direction of the company by the trustee either to purchase these bontls for cancellation or to purchase additional equipment to become subject to this indenture, or to purchase bonds legal for New York State Life Insur- ance Companies. Up to December 31, 1911, the total receipts of this fund amounted to $2,658,187, made up of annual payments amounting to $2,600,000 and interest on cash balance and investments amounting to $58,187. This amount has been disbursed as follows: 47 locomotives were acquired at the cost of $1,153,985; 302 Delaware & Hudson First Lien Equipment bonds have been purchased and retired, including accrued interest, at the cost of $308,067, and the balance, in the hands of the trustee, amounted to $1,196,135. Trustee: United States Mortgage & Trust Company, New York. These bonds in July, 1912, were quoted on a 4.30 basis (bid) These bonds are considered a legal investment for savings banks in New Hampsliire and Rhode Island. ALBANY & SUSQUEHANNA RAILROAD First Mortgage 3U'S Dated April 1, 1906 Maturing April 1, 1946 Interest payable April 1 and October 1 at the Company's ofBce, 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $5,000. Five coupon bonds are exchangeable for one registered bond. Authorized $10,000,000 Outstanding $6,444,000 Per mile . . 45,060 Provisions of These bonds were issued to retire $10,000,000 Consolidated 6s and 7s of 1906. In addition to i.ssue: the $6,444,000 in the hands of the public, mentioned above, $3,556,000 have been converted into Delaware & Hudson Company stock and are held in the latter's treasury. Convertibility: The above bonds are convertible into Delaware & Hudson Company stock at the rate of $500 in stock for each $1,000 bond. This privilege terminates April 1, 1916. Security: These bonds are a direct obligation of the company, secured by a first mortgage on 142.59 miles of the company's line from Albany to Binghamton, N. Y. They are also secured by a first mortgage on equipment, other property, and future acquisitions. They are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware & Hudson Company by endorsement. Trustee: United States Mortgage & Trust Company, New York. [ 257 ] The Albany & Susquehanna Railroad was chartered under the laws of the State of New York, April 19, 1851. The road was opened for traffic January 14, 1869. On February 24, 1870, it was leased in perpetuity to the Delaware & Hudson Company at an annual rental equivalent to interest on bonds, dividends at the rate of 7% until January, 1903, and thereafter at the rate of 9%. These bonds sold in 1907 on a 3.05 to 4.35 basis 1908 3.50 3.95 1909 3.15 3.65 1910 3.62 4.00 1911 3.80 4.05 1912 3.87 4.15 These bonds are considered a legal investment for savings banks in New England. SARANAC & LAKE PLACID RAILROAD First Mortgage 5s Dated May 1, 1893 Maturing November 1, 1913 Interest payable May 1 and November 1 at the Company's office, 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $120,000 Outstanding $120,000 Per mile . . 12,000 Security : These bonds are secured by a first mortgage on the company's line from Saranac to Lake Placid, N. Y., a distance of 9.98 miles. They are also secured by a first mortgage on equipment and other property now owned or hereafter acquired. Trustee: Central Trust Company, New York. The Saranac & Lake Placid Railroad was chartered under the laws of the State of New York on July 12, 1890. The road was opened July 15, 1894. In 1903, this road, together with the Chateau- gay Railroad and the Chateaugay Railway consolidated under the name of the Chateaugay & Lake Placid Railway Company, the latter being leased for 500 years to the Delaware & Hudson Company at a rental for the first five years equivalent to the surplus earnings of the company. These bonds are considered a legal investment for savings banks in Maine. [ 258 RENSSELAER & SARATOGA RAILROAD First Mortgage 7s Dated May 1, 1871 Maturing May 1, 1921 Interest payable May 1 and November 1 at the Company's office, 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000. Authorized $2,000,000 Outstanding $2,000,000 Per mile . . 14,815 Security: These bonds are a direct obligation of the company. They are secured by a first mortgage on the company's line for a distance of 135.28 miles; also on buildings, equipment, etc. This issue is GUARANTEED as to INTEREST by the Delaware & Hudson Canal Company, by endorsement. The Rensselaer & Saratoga Railroad was chartered under the laws of the State of New York on April 14, 1832, and was commercially opened on March 19, 1836. The company, including leased and merged lines, was leased in perpetuity to the Delaware & Hudson Canal Company on May 1 , 1871, the latter company assuming all obligations and guaranteeing 8% on the capital stock. These bonds sold in 1902 on a 3.30 to 3.75 basis 1904 3.37 3.65 1905 3.50 1906 4.00 1908 4.10 4.15 1909 4.00 4.05 1910 3.65 4.30 1911 4.00 4.27 1912 4.12 These bonds are considered a legal investment for savings banks in Maine, Connecticut and Rhode Island. COOPERSTOWN & SUSQUEHANNA VALLEY RAILROAD First Mortgage 5s Dated May 1, 1888 Maturing May 1, 1918 Interest payable May 1 and November 1 at the Company's office, 32 Nassau Street, New York. Coupon bonds of $100, $200, $300 and $500. Authorized $200,000 Outstanding $200,000 Per mile . . 10,526 Security: These bonds are secured by a first mortgage on the company's fine from Cooperstown to Char- lottes Crossing, N. Y., 19.48 miles. They are also secured by a first mortgage on equipment and future acquisitions. [ 259 ] The bonds are GUARANTEED as to INTEREST by the Cooperstown & Charlotte Valley Railroad Company. The Cooperstown & Susquehanna Valley Railroad was chartered under the laws of the State of New York on February 25, 1865, and was opened for traffic July 14, 1869. On April 30, 1888, the road was leased for 99 years to the Cooperstown & Charlotte Valley Railroad, whose entire capital stock is owned by the Delaware & Hudson Company. These bonds are considered a legal investment for savings banks in Maine. GREENWICH & JOHNSONVILLE RAILWAY First Mortgage 4s Dated January 1, 1904 Maturing January 1, 1924 Interest payable January 1 and July 1 at Standard Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $500,000 Outstanding $400,000 Per mile . . 1,265 Provisions of Of the $500,000 authorized, $100,000 are reserved for improvements, betterments and equip- issue: ment, and $400,000 are outstanding as above. Security: These bonds are a direct obligation of the company. They are secured by a first mortgage on 31.62 miles of the company's line, and upon lands, buildings and future acquisitions. Trustee: Standard Trust Company, New York. The Greenwich & Johnsonville Railway was chartered under the laws of the State of New York, in 1866, as the Union Village & Johnsonville Railway Company. Its name was changed to that of the Greenwich & Johnsonville Railway in 1879. Control of the company was acquired by the Delaware & Hudson Company in 1906. The latter owns the entire $225,000 capital stock out- standing at the present time. These bonds are considered a legal investment for savings banks in Maine and New Hampshire. [ 260 ] DELAWARE, LACKAWANNA & WESTERN RAILROAD COMPANY DELAWARE, LACKAWANNA & WESTERN RAILROAD COMPANY HISTORY The Delaware, Lackawanna & Western Railroad Company was incorporated by special act of the Legislature of Pennsylvania, approved April 7, 1832, as the Ligetts Gap Railroad. The road was actually chartered March 18, 1849, and by special act the name was changed on April 14, 1851, to that of the Lackawanna & Western Railroad Company. April 30, 1853, the Lackawanna & Western was consolidated with the Delaware & Cobbs Gap Railroad (chartered December 4, 1850), and the consolidated roads took the name of the Delaware, Lackawanna & Western Railroad Company. The company's line from Scranton to Great Bend was opened for traffic October 20, 1851, and from Scranton to the Delaware River, May 27, 1856. Since that time the company has taken over many important subsidiaries by lease and through control of their capital stocks. In 1857 the Warren Railroad, whose line extended from the Delaware River to a junction with the Central Railroad of New Jersey, was leased, the latter line being used up to 1875 as an outlet to the Hudson River. In 1868 the Morris & Essex Railroad was leased, and the Oswego & Syracuse Railroad in the following year. Control was obtained also of the Syracuse, Binghamton & New York Railroad through the purchase of the major part of its stock. In 1871 an important extension was built, known as the Valley Railroad, to connect the Syracuse line at Binghamton with the main line at Great Bend, and in 1873 the property of the Lackawamia & Bloomsburg Railroad was taken over. In September, 1881, the company secured control of the Sussex Railroad of New Jersey through the purchase of a majority of its stock. The New York, Lackawanna & Western Railway was leased in October, 1882, and was the finishing linlv in the line to Buffalo. During that year, also, the Passaic & Delaware Railroad of New Jersey was absorbed. In 1889 two important operating contracts were entered into, one with the Morris & Essex Exten- sion Railroad, giving the Delaware, Lackawamia & Western an entrance into the city of Paterson, New Jersey, and the other with the Passaic & Delaware Extension Railroad, giving operating rights over a small but important line extending from Bernardsville to Gladstone, New Jersey. No further additions were made until 1903, when the company acquired the entire capital stock of the New York & Hoboken Ferry Company, operating ferries on the Hudson River between New York and Hoboken, New Jersey. In 1905 the Lackawanna purchased practically all the outstanding stock of the Harlem Transfer Company, securing thereby the control and use of valuable terminal properties on the Harlem River. In the following year the properties of the Brooklyn Warehouse & Dry Docks Company and the Brooklyn Dock & Terminal Company, which owned two dry docks, four slips, float bridges, warehouses, two miles of railroad track, etc., were secured. Early in 1908 a company known as the Lackawanna Railroad Company of New Jersey was organized under the laws of that state for the purpose of building a cut-off line between Slateford, Pennsylvania, and Port Morris, New Jersey. The reason for this expensive piece of construction was to enable the railroad to haul a large proportion of its traffic over a low-grade short cut at an actual saving of eleven miles. The line was completed and put into service on December 24, 1911, and has been in continuous use since that time. The Lackawanna Railroad has been leased in perpetuity to the Delaware, Lackawanna & Western Railroad Company at an annual rental equal to 4% on the capital stock outstanding. The capital stock of the company, which the latter held in its treasury in return for moneys advanced to pay for its construction, was distributed pro rata among the stock- [ 263 ] holders of the Delaware, Lackawanna & Western as a dividend of 35% on their holdings. The total cost of this line, to December 31, 1911, was $11,065,511. On July 1, 1909, the Bangor & Portland Railway and the Hanover & Newport Railroad Com- panies were merged with the Delaware, Lackawanna & Western Railroad. The Bangor & Portland Railroad Company was the result of a consolidation, July 1, 1899, of a company of that name with the Nazareth & Lehigh Railway Company, and its capital stock had been controlled since then by the Lackawanna. The Hanover & Newport Railroad was chartered in 1894, and its road was com- pleted to two collieries belonging to the Lackawanna. Its only earnings were from rents for the use of its tracks by that company. COAL DEPARTMENT The Lackawanna is one of the largest owners of anthracite coal lands in America. It has been estimated that the total immined coal of this company approximates 400,000,000 tons. Based on the company's reports, the tonnage sales and profits of its coal department for the five years ending 1911, are given below: Year Tons sold Total sales Net profits of and earnings coal department 1907 10,384,191 $40,296,289 $4,224,921 1908 9,610,127 38,185,417 4,166,792 1909 10,565,906 35,535,813 4,628,771 1910 9,916,837 21,708,054 3,381,262 1911 9,891,111 22,506,214 3,490,085 The decrease in total sales and earnings in 1909 and 1910 was due to the fact that the railroad, on August 1, 1909, discontinued the sales of its coal department to conform with the decision rendered by the United States Supreme Court that railroad companies cannot lawfully transport in interstate commerce coal owned by themselves. A coal-selling company known as the Delaware, Lackawanna & Western Coal Company was organized. A contract was entered into with the new Coal Company, whereby the railroad agreed to sell its coal on loaded cars at the mines, at what is known as the 65% basis of tidewater prices. It also agreed to sell and turn over all stocks of coal along its lines and on western docks, and to lease its trestles to the Coal Company. During the months of April and May, 1912, coal-mining operations were entirely suspended pending rearrangement of the basis of wages for the miners, which had been fixed previously by the Anthracite Strike Commission of 1902. As a result of this suspension, the Lackawanna's operating income probably will show a loss for the fiscal year of 1912. Mining operations were begun again in June, but the concessions granted will undoubtedly increase the cost of production, which will probably mean a substantial increase in the price charged the consumer. PROPERTY The Lackawanna operated at the close of the fiscal year ending December 31, 1911, a total of 985.26 miles. Of this amount, 239.72 miles were owned in fee, 603.41 miles were those of leased lines, and 142.13 miles represented the mileage of controlled roads. The a^•erage miles operated by the company, used as a basis in this report, were 815.69. The entire mileage of the road lies in the States of Pennsylvania, New Jersey and New York, whose population in 1900 was 15,454,708 and in 1910 was 19,315,557. In Pennsylvania 246.1 miles were being operated, in New Jersey 202.97 miles and in New Y'ork 394.06 miles. The main line extends westerly from New York, through the anthracite coal belt to Buffalo, [ 264 ] with three important branches: two from Bingham ton to Oswego, on Lake Erie, and Utica; the other from Scranton, into the coal fields of Pennsylvania, to Northumberland. CAPITALIZATION The capitalization of the Delaware, Lackawanna & Western Railroad on December 31, 1911, was approximately as follows: Capital stock (excluding premiums) $30,277,000 Funded debt 320,000 Nominal capital $30,597,000 Rentals capitalized @ 5% 104,097,780 Gross capitalization ■ ■ ■ $134,694,780 Securities owned 9,580,963 Net capitalization $125,113,817 Net capital per mile operated $153,512 Average miles operated 815.69 Net income to net capital 15.4% Fixed charges to net income 38.6% Margin of safety 61.4% As will be seen by the foregoing, the nominal capital of the Lackawanna is comparatively low. Especially noticeable is the fact that the company has no mortgage debt of its own, the $320,000 above representing the mortgage bonds outstanding of the Bangor & Portland Railway Company which were assumed by the Lackawanna at the time of the consolidation in 1909. Two-thirds of the mileage of the system is leased at certain fixed rentals. For the use of 603 miles the company paid rentals amounting to $5,204,889. This figure, capitalized at 5%, gives us an approximate capitalization of these leased lines of over $104,000,000, a figure equal to 77% of the total gross capitalization. Of the securities which the company holds in its treasury, $7,374,000 are stocks and bonds of leased roads from which the company derives an average income of 5.7%. The net capital of the Lackawanna per mile operated averaged $146,656 during the five years ending 1911, as compared with the Reading's average of $168,000 and that of the Lehigh Valley, $68,200. The total net income, in comparison with the net capitalization of the road, places the Lackawanna almost in a class by itself. Its net income for the five years was over 18% on the above net capital, while the Reading earned but 13.5% on a slightly higher capitalization. The Lehigh Valley's average net income to net capital for the period was but 15%. The most remarkable thing about these figures is the margin of safety for the interest on under- lying securities of the company which in 1911 was 61%; that is, the surplus available for dividends, after all fixed charges, was 61% of the total net income. Durmg the five years this figure averaged 66% for the Lackawanna. The Reading's average was 54%, while that of the Lehigh Valley was 52%. [ 265 ] CHARACTER OF TRAFFIC The Lackawanna is primarily a "coal road," as is attested by the fact that during 1911 nearly 75% of the company's business was freight, of which 60% was represented by coal and coal products. Based on earnings 39% of the total business of the company was embodied in this one traffic item. Following is a table showing the ratios of freight tonnage for the five years ending 1911: Products of 1911 1910 1909 1908 1907 Agriculture 8.76% 7.75% 7.43% 6.98% 8.54% Animals 1.68 1.50 1.61 2.01 2.23 IVIines 60.22 60.00 61.91 64.98 60.15 Forests 2.92 2.90 3.10 1.90 2.32 Manufactures 13.42 14.37 13.15 9.24 9.20 Miscellaneous 13.00 13.48 12.80 14.89 17.56 Of the total tonnage of the company during the period in question nearly half is represented by anthracite coal carried: 1911 1910 1909 1908 1907 Total tonnage . 21,732,254 21,750,510 20,391,134 18,199,155 21,082,119 Anthracite . 9,928,149 9,991,557 10,118,134 9,971,061 10,556,558 To show the operating efficiency of the Lackawanna, and the effect it has had upon the company' earnings, the following statistics are given for the five years ending December 31, 1911: Year Freight density Train load tons Earnings Coal . Merchandise Rate Coal Merchandis 1907 . 4,529,671 490 $14,361,416 $12,235,807 $.0085 $.0068 1908 . 4,001,377 484 14,558,702 9,850,008 .0086 .0071 1909 . 4,057,112 520 14,464,221 11,393,859 .0086 .0070 1910 . 4,256,591 567 14,067,777 12,443,473 .0084 .0069 1911 . 4,332,035 583 14,096,725 12,462,679 .0083 .0067 As will be seen by the foregoing, there is a general decline in every item except one. The number of tons carried one mile per mile of road (freight density), as compared with the 1907 figure, de- clined 4.6% in 1911, showing a comparatively steady tonnage figure. The number of revenue tons per freight train, however, increased markedly during the period in question, showing a gain of 19% in 1911 over the figure of 1907. Coal earnings were somewhat higher each year than earnings from the transportation of merchandise, due to a more profitable rate. Coal earnings show a net decline during the period of nearly 2%, and earnings from merchandise freight a gain of nearly 2%. There was in each case a steady decline in the rate per ton. The Lackawanna, while doing a heavy coal business, has also developed during the decade a good-sized miscellaneous business and a large passenger traffic. Following are some of the more salient passenger statistics of the Lackawanna for the years 1907 to 1911 inclusive: Year Passenger Passenger Rate per pas- density earnings senger per mile 1907 611,446 $6,757,596 $.0143 1908 609,386 6,449,032 .0137 1909 604,611 6,825,430 .0138 1910 615,436 7,290,943 .0145 1911 626,800 7,696,800 .0150 [ 266 J The number of passengers carried one mile per mile of road operated was 2.5% greater in 1911 than in 1907. Passenger earnings increased 19.3% in 1911 over the low figures of the period, and the passenger rate nearly 10%. The passenger business of the company represents about 20% of the total and is steadily growing in importance. EARNINGS Few roads in the country earn as much per mile as the Delaware, Lackawanna & Western. Following are the gross and net earnings also figured on a per mile basis for the years 1907 to 1911 inclusive : Year Average miles Gross Per mile Net Per mile operated earnings earnings 1907 770 $37,264,473 $48,395 $15,724,734 $20,421 1908 770 32,898,495 42,725 14,274,841 18,538 1909 815 34,815,011 42,718 16,069,501 19,718 1910 815 36,052,932 44,236 15,429,484 18,932 1911 815 36,586,563 44,890 14,267,911 17,506 The company's earnings in 1907 were the largest of any year in its history, before or since that time. In 1908, however, all sources of revenue except coal showed a marked decrease. A curtail- ment of expense took place amoimting to nearly $3,000,000, and the company's operating ratio fell from 57.8% to 56.6%. In 1909 came a revival of general business which was reflected in a 5.8% increase in gross earn- ings. Operating expenses were held to the level of the 1908 figures, bringing about a gain in net earnings of 12.5%. Still better earnings were shown during the fiscal year of 1910. The 3)4% gain in gross earnings was more than ofl^set by an increase in operating expense of 10%. The bulk of this increase was due to nearly $750,000 additional maintenance charges, and over $1,000,000 in transportation costs. The operating ratio increased from 53.8% in 1909 to 57.2% in 1910, and the ratio of transportation costs to gross earnings increased from 30.5% to 32.7%. In 1911 gross earnings were but slightly over $500,000 greater than those of 1910, whereas oper- ating expenses increased nearly $1,700,000, resultmg in a loss in net of 8%, and the operating ratio for the first time in years went above 60%. In fact, c6mparing the period as a whole, we find gross earnings in 1911 to be nearly 2% less than the high figures of 1907, and 1911 net earnings 10.2% less than those of 1907. The company's earnings, however, are extremely high, and, as will be seen by a glance at the figures above, are generally very stable. It is true, however, that the prosperity of the road depends very largely upon the ability of the management to maintain satisfactory relations with its operatives, both railroad and mining, and it is easy to see that any prolonged labor difficulty, such as the coal strike of 1902, would aflfect the company's earnings profoundly. MAINTENANCE In the case of the Lackawanna large earnings per mile have meant large maintenance charges per mile. Below are given the amounts spent for upkeep by the company during the past five years : Year Maintenance Total Per mile Way Equipment maintenance 1907 $4,974,887 $3,731,081 $8,705,968 $11,307 1908 3,343,396 4,747,700 8,091,096 10,508 1909 3,298,389 4,797,073 8,095,462 9,933 1910 3,804,932 5,034,605 8,839,536 10,846 1911 4,144,940 5,762,903 9,907,843 12,156 [ 267 ] The Lackawanna's average traffic density of over 4,800,000 is a very high figure and even sur- passes the Reading, whose average for the same period was 4,700,000. The Lackawanna spent an average of $10,950 per mile as against the Reading's average charge for upkeep of $11,540. The Lehigh Valley, with a traffic density of 3,440,000, spent an average of $6,527 for the period. ADDITIONS AND BETTERMENTS Since June 30, 1907, the company has paid out of income for "Renewals and Betterments to Property" a total amount of $12,477,520 as follows: Year Amount 1907 (6 months) $1,740,120 1908 2,781,603 1909 2,099,454 1910 2,542,117 1911 2,200,628 1,113,598* Total (4H years) $12,477,520 In addition it has a fund for the replacement of equipment which is reported since 1908 as follows: Year Receipts Expenses Balance 1908 (Jan. 1) $63 1908 $1,358,320 $1,266,549 91,771 1909 1,485,982 1,377,114 108,867 1910 1,560,963 2,051,983 491,020t 1911 1,532,275 2,444,945 912,670t DIVIDENDS The dividend record of the Lackawanna is one of the best in railroad history. From 1885 to 1904 the company paid 7%. In 1904, in addition to the 7% dividend, 10% extra was paid, and from 1905 up to the present time a regular dividend of 10% has always been paid, together with 10% extra every year. In addition to the above cash dividends, a special cash dividend of 50% was declared on July 20, 1909, one-half of which was applicable to subscription in stock of the Delaware, Lackawanna & Western Coal Company. On August 2, 1909, a stock dividend of 15% was paid, and on December 20, 1911, a dividend of 35% was paid in stock of the Lackawanna Railroad Company of New Jersey. Over and above these annual dividends of 20%, which have been paid since 1905, the following surplus has been earned: Year Surplus 1905 $2,698,429 1906 587,072 1907 4,849,328 1908 5,457,125 1909 10,147,609t 1910 4,693,184 1911 3,603,242 * This amount was charged out of income for improvements, prior to June 30, 1907, but was expended subsequent to that date, t Deficit. I This item includes profit from sale of 37,000 shares of Lehigh Valley stock, $2,022,740. [ 268 ] The total surplus for the seven years is $32,035,989, or an average of over $4,500,000. The company's Profit and Loss Account stood on its balance sheet of December 31, 1911, at $25,502,631, or 84% of its capital stock. STATISTICS Following are the capitalization, earnings and traffic statistics of the Delaware, Lackawanna & Western Railroad based on the average miles operated for the year 1900 and for the years 1905 to 1911 inclusive: [ 269 ] THE DELAWARE, LACKAWANNA & WESTERN RAILROAD Fiscal Capitiil Funded Rentals Gross Owned bj x\et Average Extra year stock debt @ 5% capital company capital miles operated tra^ck 1900 $33,982 $3,978 $ 133,601 $171,561 $7,836 $163,725 771 486 1905 34,026 3,983 133,213 171,222 20,491 150,731 770 480 1906 34,026 3,983 33,992 172,001 23,625 148,376 770 480 1907 34,026 19 34,238 168,283 23,713 144,570 770 480 1908 34.026 34,029 168,055 23,730 144,325 770 480 1909 37,149 393 26,629 164,171 16,281 147,890 815 480 1910 37,149 392 26,629 164,170 21,185 142,985 815 480 1911 37,149 392 27,727 165,268 11,756 153,512 815 481 Fiscal Gross Maintenance Transportatic n Net Other Total net Fixed Surplus year operating and genera operating income income charges available revenue Way Equipment $3,996 $3,601 expense $10,341 revenue $2,389 $8,101 r dividends 1900 $27,091 $9,153 $11,542 $3,441 1905 41,494 6,026 3,730 13,397 18,341 5,115 23,456 8,488 14,968 1906 42,809 6,413 3,778 14,354 18,264 5,843 24,107 9,330 14,777 1907 48,395 6,461 4,846 16,667 20,421 6,707 27,128 9,066 18,062 1908 42,725 4,342 6,166 13,679 18,538 7,579 26,117 8,613 17,504 1909 42,718 4,047 5,886 13,067 19,718 10,844* 30,562 8,378 22,184 1910 44,236 4,668 6,178 14,458 18,932 5,838 24,770 8,495 16.275 1911 44,890 5,085 7,071 15,228 17,506 6,140 23,646 9,128 14.518 Fiscal Dividends Other Surplus Operating Total Conducting Fixed Net Gross Per cent year charges to expenses maintenance transporta- charges incom e earnings earned income to gross to gross tion to gross to gross to net to gross on capital earnings earnings earnings earnings capita capital stock 1900 $2,379 $1,132 $70t 65.84% 27.7% 38.1% 29.0% 7.0% 15.8% 10.4% 1905 6,805 4,659 3,504 55.80 23.6 32.2 20.3 15.5 24.2 44.0 1906 6,805 7,209 763 56.12 25.0 31.1 21.8 16.3 24.9 43.4 1907 6,805 4,961 6,296 57.80 23.4 34.4 18.7 18.7 28.8 53.1 1908 6,805 3,613 7,086 56.61 24.6 32.0 20.1 18.1 25.4 51.4 1909 7,155 2,576 2,453 53.84 23.3 30.5 19.6 20.6 26.0 59.7 1910 7,397 3,119 5,759 57.20 24.5 32.7 19.2 17.3 27.0 43.8 1911 7,307 2.700 4,421 01.00 27.1 33.9 20.3 15.4 27.2 39.1 Fiscal Train mile Maintenance Conducting Train Rate per mile year earnings per revenue trans- transporta- mile (gross) portation mile tion per earnings Per Per ton revenue (net) passenger Way Equipment train mile Freight Train Freight Passenger density load to all freight revenue traflSc and tons company cars 1900 $1.81 $.266 $.240 $.683 $.62 $.0148 $.0081 2,445,032 307 73% 28,293 1905 2.60 .377 .233 .839 1.15 .0143 .0078 3,826,713 401 73 24,977 1906 2.66 .397 .234 .890 1.14 .0144 .0077 3,868,828 465 70 27,738 1907 2.82 .376 .282 .971 1.19 .0143 .0076 4,529,671 490 71 28,696 1908 2.64 .267 .379 .841 1.15 .0137 .0079 4,001,377 484 74 28,477 1909 2.78 .264 .384 .852 1.28 .0138 .0078 4,057,112 520 74 28,804 1910 2.92 .308 .408 .956 1.25 .0145 .0076 4,256,591 567 73 29,605 1911 2.96 .336 .467 1.007 1.15 .0150 .0075 4,332,035 583 73 30,075 The mileage directly owned is unmon * Includes profit of sale of Lehigh Valley stock. [ 270 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Delaware, Lacka- wanna & Western Railroad System, together with the bases upon which they have sold during the decade ending December 31, 1912: BANGOR & PORTLAND RAILWAY First, Second and Third Mortgage 6s Dated: First 6s, January 1, 1880 Maturing: First 6s, January 1, 1930 Second 6s, January 1, 1882 Second 6s, January 1, 1932 Third 6s, January 1, 1886 Third 6s, January 1, 1936 Interest jjayable January 1 and July 1 at 90 West Street, New York. Coupon bonds of $1,000. Authorized: First 6s, $150,000 Outstanding: First 6s, $150,000 Second 6s, 100,000 Second 6s, 100.000 Third 6s, 70,000 Third 6s, 70,000 Per mile 7,442 Security : These bonds are a direct obligation of the Delaware, Lackawanna & Western Railroad Company. They are secured by first, second and third mortgages on 42.97 miles of the company's line, from Portland to Nazareth, Pa., 38.37 miles, and from Nazareth Junction to Martin's Creek, Pa., 4.60 miles. The Bangor & Portland Railway was chartered March 4, 1879, and was opened for traffic December 28, 1885. On July 1, 1899, this company consolidated with the Nazareth & Lehigh Rail- way Company, under the name of the former. The entire capital stock of the new company was owned by the Delaware, Lackawanna & Western Railroad Company, and on July 1, 1909, the Bangor & Portland Railway Company was merged into the Delaware, Lackawanna & Western Railroad Company and is now operated as the Bangor & Portland Branch. The first mortgage bonds are considered a legal investment for savings banks in Maine and New Hamp- shire. The second and third mortgage bonds are considered legal in New Hampshire. MORRIS & ESSEX RAILROAD First Mortgage 7s Dated July 1, 1864 Maturing May 1, 1914 Interest payable May 1 and November 1 at 90 West Street, New York. Coupon bonds of $100, $500 and $1,000, registerable as to prmcipal or fully registerable. Authorized $5,000,000 Outstanding $5,000,000 Per mile . . 46,730 Security : These bonds are secured by a first mortgage on the company's line from Hoboken to Phillips- burg, N. J., 84.58 miles, and from Denville to Paterson, N. J., 22.43 miles, a total of 107.01 miles. The bonds are ASSUMED by the Delaware, Lackawanna & Western Railroad Company. Equity: This issue is prior in lien to the Morris & Essex Consolidated 7s of 1915; also, prior in lien to the Morris & Essex First Refunding Sj/^s of 2000, a sufficient number of which are reserved to retire the First Mortgage 7s of 1914. [ 272 ] The Morris & Essex Railroad Company was chartered under the laws of the State of New Jersey on January 29, 1835. On December 31, 1868, the road was leased in perpetuity to the Delaware, Lackawanna & Western Railroad, which assumed all the fixed obligations of the Morris & Essex Railroad Company and agreed to pay 7% yearly on the capital stock. These bonds sold in 1902 on a 3.15 to 3.65 basis 1903 3.24 3.75 1904 3.45 3.70 1905 3.20 3.90 1906 3.35 4.125 1907 4.00 5.40 1908 3.65 4.27 1909 3.75 4.375 1910 3.90 4.625 1911 3.90 4.55 1912 3.10 5.50 These bonds are considered a legal investment for savings banks in Maine, Connecticut and Rhode Island. MORRIS & ESSEX RAILROAD First Consolidated Mortgage 7s Dated January 15, 1875 Maturing June 1, 1915 Interest payable June 1 and December 1 at 90 West Street, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000. Authorized $25,000,000 Outstanding $11,677,000 Per mile . . 98,126 (Closed mortgage) Security: These bonds are secured by a first mortgage on the 12 miles of road from Paterson to West End Tunnel, N. J., and upon lands, buildings, equipment and future acquisitions. They are secured by a second mortgage on 107.01 miles of road covered by the Morris & Essex First 7s. They are also secured by a first mortgage on 100.97 miles of second track. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware, Lackawanna & Western Railroad Company by endorsement. Equity: This issue is prior in hen to the Morris & Essex First Refunding 3}^^ of 2000, a sufficient num- ber of which have been reserved to retire this issue. Trustee: Farmers' Loan & Trust Company, New York. For history of the Morris & Essex Railroad Company, see above. [ 273 ] These bonds sold in 1902 on a 3.125 to 3.45 basis 1903 3.45 3.85 1904 3.38 3.80 1905 3.25 3.80 1906 3.47 4.15 1907 3.88 3.88 1908 3.65 4.15 1909 3.70 4.35 1910 3.88 4.45 1911 3.80 4.38 1912 3.75 5.05 These bonds are considered a legal investment for savings banks in Connecticut, New Hampshire and Rhode Island. MORRIS & ESSEX RAILROAD First Refunding Mortgage 3j^s Dated December 1, 1900 Maturing December 1, 2000 Interest payable June 1 and December 1 at 90 West Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $35,000,000 Outstanding $16,800,000 Per mile . . 141,175 Provisions of Of the amount authorized, $18,200,000 are reserved for construction, equipment, etc., and for issue: the retirement of prior liens, and $16,800,000 are in the hands of the public as above. Security : These bonds are a direct obhgation of the company. They are secured by a second mortgage on the 12 miles from Paterson to West End Tunnel, N. J., covered by the Morris & Essex First Consolidated 7s of 1915; and by a third mortgage on the 107.01 miles covered by the Morris & Essex First 7s of 1914. They are also secured by mortgages on lands, terminals, buildings, docks, tunnels, etc., and on future acquisitions. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Dela- ware, Lackawanna & Western Railroad Company by endorsement. Trustee: Farmers' Loan & Trust Company, New York. For the history of the Morris & Essex Railroad Company, see page 273. These bonds sold in 1909 on a 3.65 to 3.75 basis 1910 3.85 (bid) 1911 3.85 1912 3.90 These bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. [ 274 NEW YORK, LACKAWANNA & WESTERN RAILWAY First Mortgage 6s Dated December 31, 1880 Maturing January 1, 1921 Interest payable January 1 and Jidy 1 at 90 West Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $12,000,000 Outstanding $12,000,000 Per mile . . 55,960 Security: These bonds are secured by a first mortgage on 214.44 miles of the company's line, including the 207.14 miles from Binghamton to International Bridge, New York, the Buffalo City Branch and the Cayuga Extension, and upon 213 miles of second track. They are also secured by mortgages on terminals at Buffalo and on buildings, equipment, etc., and on future acquisitions. These bonds are ASSUMED by the Delaware, Lackawanna & Western Railroad Company. Equity: This issue is prior in lien to the New York, Lackawanna & Western Construction 5s of 1923 and to the Terminal & Improvement 4s of 1923. Trustee: Farmers' Loan & Trust Company, New York. The New York, Lackawanna & Western Railway Company was chartered under the laws of the State of New York on August 26, 1880, and was open for traffic in September, 1882. On October 2, 1882, the road was leased in perpetuity to the Delaware, Lackawanna & Western, which assumed its fixed obligations and agreed to pay 5% per annum on the outstanding capital stock. These bonds sold in 1902 on a 3.35 to 3.625 basis 1903 3.60 3.90 1904 3.63 3.85 1905 3.50 3.70 1906 3.70 4.05 1907 3.90 4.55 1908 3.57 4.30 1909 3.80 4.10 1910 3.90 4.50 1911 4.00 4.30 1912 4.10 4.60 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Rhode Island and Connecticut. [ 275 ] NEW YORK, LACKAWANNA & WESTERN RAILWAY Construction Mortgage 5s Dated August 1, 1883 Interest payable February 1 and August 1 at ! Maturing August 1, 1923 West Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Security : Outstanding $5,000,000 Per mile . . 23,320 Equity : Trustee: These bonds are a direct obligation of the company. They are secured by a second mortgage on the 214.44i miles of road which are covered by the New York, Lackawanna & Western First Mortgage 6s of 1921. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware, Lackawanna & Western Railroad Company by endorsement. This issue is prior in lien to the New York, Lackawanna & Western Terminal & Improvement 4s of 1923. Farmers' Loan & Trust Company, New York. For the history of the New York, Lackawanna & Western Railway Company, see page 275. bonds sold in 1902 on a 3.75 to 3.95 basis 1903 3.90 4.35 1904 3.85 4.15 1905 3.85 4.05 1906 3.80 4.30 1907 4.00 4.85 1908 3.95 4.22 1909 3.80 4.10 1910 3.95 4.38 1911 4.20 4.30 1912 4.12 4.40 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 276 NEW YORK, LACKAWANNA & WESTERN RAILWAY Terminal & Improvement Mortgage 4s Dated May 1, 1890 Maturing May 1, 1923 Interest payable May 1 and November 1 at 90 West Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $5,000,000 Per mile . . 23,320 Security: This issue is a direct obhgation of the company. It is secured by a third mortgage on the 214.44 miles of the company's Une covered by the First Mortgage 6s of 1921 and by the second mortgage of the Construction 5s of 1923. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware, Lackawanna & Western Railroad Company by endorsement. Trustee : Farmers' Loan & Trust Company. For the history of the New York, Lackawanna & Western Railroad Company, see page 275. The above bonds sold in 1902 on a 3.62 to 3.85 basis 1903 3.80 4.00 1904 3.60 4.00 1905 3.63 3.75 1906 3.80 3.85 1907 4.25 5.30 1908 3.85 4.25 1909 3.95 4.05 1910 3.90 4.22 1911 4.05 4.25 1912 4.22 4.50 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. OSWEGO & SYRACUSE RAILROAD Construction Mortgage 5s Dated May 1, 1883 Maturing May 1, 1923 Interest payable May 1 and November 1 at 90 West Street, New York. Coupon bonds of $1,000. Authorized $1,000,000 Outstanding $668,000 Per mile . . 19,085 Security: The above bonds are a direct obligation of the company, and are secured by a second mortgage on 35 miles of the company's road from Oswego to Syracuse, N. Y., covered by the first mortgage of the Oswego & Syracuse Railroad First 7s of 1907, which were purchased by the Delaware, Lackawanna & Western Railroad Company and held as a treasury asset. [ 277 ] These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware. Lackawanna & Western Railroad Company by endorsement. Trustee: Farmers' Loan & Trust Company, New York. The Oswego & Syracuse Railroad was chartered under the laws of the State of New York in 1839, and its property was leased from 1869 to the extent of its charter, to the Delaware, Lackawanna & Western Railroad Company, which assumed all its funded obligations as of March 1, 1869, and guaranteed 9% on the outstanding capital stock. These bonds sold in 1906 on a 3.80 basis 1909 4.15 (bid) 1910 4.35 (bid) 1911 4.35 (bid) December, 1912 4.87 (bid) These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. WARREN RAILROAD First Refunding Mortgage sHs Dated July 17, 1900 Maturing August 1, 2000 Interest payable February 1 and August 1. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $2,000,000 Outstanding $1,394,000 Security: The above bonds are secured by a mortgage on the line of the Warren Railroad, extending from the centre of the bridge across the Delaware River at the point of connection with the Delaware, Lackawanna & Western Railroad, to its connection with the Central Railroad of New Jersey at a Junction in Hunterton County, 18.82 miles, together with lands, buildings and franchises now owned or hereafter acquired by the company. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Delaware, Lackawanna & Western Railroad Company by indorsement. Trustee: The Farmers' Loan & Trust Company, New York. The Warren Railroad was chartered February 12, 1851. The road was opened for traffic June, 1856. On October 1, 1857 the property of the Warren Railroad was leased in perpetuity to the Delaware, Lackawanna & W^estern Railroad, at an annual rental of 7% on its stock and interest on its bonds. These bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. [ 278 GREAT NORTHERN RAILWAY COMPANY GREAT NORTHERN RAILWAY COMPANY HISTORY The Great Northern Railway Company was chartered September 18, 1889, as the successor to the ^NlinneapoHs & St. Cloud Railway, which had been chartered by the Legislative Assembly of the Territory of INIinnesota on March 1, 1856. On February 1, 1890, the property of the St. Paul, Minneapolis & ^Manitoba Railway was form- ally leased to the Great Northern for 999 years, the lessor guaranteeing dividends at 6% per annum on the St. Paul stock, and payment of both principal and interest on its bonds. In October, 1898, and subsequently, the Great Northern acquired 98% of the capital stock of the St. Paul Company by issuing its own stock in exchange therefor at the rate of $125 for $100. The Great Northern Railway Company purchased the entire capital stock of the Seattle & Montana Railway Company in 1898 and began operating the road on August 1 of that year. The Park Rapids & Leech Lake Railway was leased May 1, 1899, the lease to run from year to year. All the stocks and securities of the company were acquired by the Great Northern. In 1902 the entire capital stock of the Eastern Railway of INIinnesota was purchased, and the road was leased for 99 years, from May 1, 1902, at a rental equivalent to the interest on its bonds and dividends of 6% per annum on its capital stock. The lines of the Duluth, Superior & Western Terminal Company were leased for 99 years, from May 1, 1903, at a rental of $20,000 a year, and at the same time an agreement was made with the Allouez Bay Dock Company, which operates the ore docks of the former, by which Great Northern ore trains were permitted to run to the docks. The Minnesota & Great Northern Railway was taken over by the Great Northern Railway in November, 1904, this agreement being terminable on three months' notice by either party. On December 11, 1906, the Great Northern Railway was authorized, subject to the approval of its stockholders, to increase its capital stock by issuing 600,000 shares of $100 par value for the fol- lowing purposes, — to provide additional terminals and other facilities for existing lines, and to acquire the stocks or bonds, or both, of the following companies : Dakota & Great Northern Railway Montana & Great Northern Railway Billings & Northern Railroad Washington & Great Northern Railway Portland & Seattle Railway Vancouver, Victoria & Eastern Railway & Navigation Company Brandon, Saskatchewan & Hudson's Bay Railway IVIidland Railway, Manitoba Under the authorization given at the annual stockholders' meeting held October 10, 1907, the Great Northern purchased, and now holds title to, the following lines of railway, together with their equipment, securities and all other property and assets : St. Paul, Minneapolis & Manitoba Railway Eastern Railway of Minnesota WUlmar & Sioux Falls Railway [ 281 ] Park Rapids & Leech Lake Railway Duluth, Watertown & Pacific Railway Montana Central Railway Minnesota & Great Northern Railway Minneapolis Union Railway Spokane Falls & Northern Railway Columbia & Red Mountain Railway Washington & Great Northern Railway Seattle & Montana Railroad Dakota & Great Northern Railway Montana & Great Northern Railway Billings & Northern Railroad Payment was made by assuming the bonds of the above companies, writing ofif the amounts advanced for construction purposes, discharging the current liabilities, and upon payment of other considerations. These properties were carried on the books of the selling companies at nearly $250,000,000. Li 1901 control of the Chicago, Burlington & Quincy Railroad was purchased jointly with the Northern Pacific Railway. It was at that time that an attempt was made to merge all three through the formation of the Northern Securities Company as a holding organization. This holding company, it will be remembered, was declared illegal, and dissolved. At the present time the Great Northern owns, jointly with the Northern Pacific, practically the entire capital stock of the Burhngton. Its half consists of 1,076,135 shares, having a book value of $109,114,809. This stock, together with a like amount held by the Northern Pacific Railway Company, has been pledged under the Northern Pacific-Great Northern-Chicago, Burlington & Quincy 4% Collateral Joint Bonds, amounting to $215,227,000, and is guaranteed as to principal and interest by both. The following companies are owned by the Great Northern Railway Company: Brandon, Saskatchewan & Hudson's Bay Railway Manitoba & Great Northern Railway Crow's Nest Southern Railway Nelson & Fort Vancouver Railway Victoria & Eastern Railway & Navigation Company Nelson & Fort Shepard Railway New Westminster Southern Railway Red Mountain Railway (The above are located in the Dominion of Canada) Duluth Terminal Railway Minneapolis Western Railway These roads have no bonds outstanding, and their operations are reported in the earnings of the parent company. One important piece of construction, in which the Great Northern is interested jointly with the Northern Pacific Railway, is the building of the Spokane, Portland & Seattle Railway, for which both have made large advances in recent years. In settlement for these advances, the Spokane, Portland & Seattle Railway Company has delivered to, and in the names of both, jointly, but for equal division between them, a certificate calling for $40,000,000 of its capital stock, also $61,000,000 of its First Mortgage 4% Fifty-Year Gold Bonds dated March 1, 1911, the payment of which, both principal and interest, has been guaranteed by the two companies. $30,500,000 of these bonds are now in the treasury of the Great Northern Company. [ 282 ] ORE PROPERTIES Among the most important assets of the Great Northern at one time were its holdings of large supphes of ore in northeastern Minnesota, comprising over 65,000 acres of land. These had been turned over to the Lake Superior Company, Ltd., a corporation closely affiliated with the Great Northern Railway. Li December, 1906, the Lake Superior Company, Ltd. transferred all its prop- erty to Louis W. Hill, James N. Hill, Walter J. Hill, and E. T. Nichols, as the Trustees of the Great Northern Iron Ore Properties. Two months previous to this date it was announced that the owners of the $150,000,000 share capital of the Great Northern Railway Company, on record December 6, 1906, would receive "certificates of beneficial interest in the ore properties" share for share. On the following day (December 7) the transfer of the above-mentioned properties was made, and in January, 1907, the trustees leased a portion of the lands, comprising some 40,000 acres, to the Great Western Mining Company, a subsidiary of the United States Steel Company. This lease was to run indefinitely unless terminated at the option of the Steel Corporation, January 1, 1915, on two years' notice. During the year 1912 the Steel Corporation notified the trustees that it desired to terminate the lease in 1915. It has been stated that the trustees will enter the market as independent pro- ducers, and will grant no more leases to other interests. LAND DEPARTMENT Like most Western railroads built in the development period of the West, the Great Northern was assisted by extensive land grants from the government. In the company's report for the fiscal year ending June 30, 1912, the amount of land which remained unsold in the St. Paul, Minneapolis & Manitoba laud grant was 797,011 acres. The original grant to the railroad was 3,848,000 acres. There were also 18,009 acres of land still remaining in the MinneapoUs & St. Cloud land grant, which was originally over 425,000 acres. PROPERTY The statement of the Great Northern Railway and proprietary companies for the fiscal year ending June 30, 1912, showed a total of 7,482.36 miles of main track in the system. Of this amount, 6,553.38 miles were owned in fee (17.66 miles of which have been leased to other companies), 622.50 miles were owned by controlled companies, and 324.14 miles were being operated under contracts and trackage rights. The average miles under operation by the system were 7,369. The lines of the Great Northern connect Sioux City and ISIinneapolis, the terminals of the Chi- cago, Burlington & Quincy, and Duluth, the great port of Lake Superior, on the east, with the Pacific ports, Vancouver, Seattle, Tacoma and Portland, on the west. Its branches form a network of roads in Minnesota and North Dakota, and extend up into Canada, tapping the territories of Mani- toba, Alberta and British Columbia. Its mileage traverses the States of Minnesota, North Dakota, Montana, Idaho and Washington. The population of these States in 1890 was 2,050,300; in 1900, 2,993,780, and in 1910, 4,496,400. CAPITALIZATION The capital account of the Great Northern Railway Company and the independently operated lines of the MinneapoUs Western Railway and the Duluth Terminal Railway, all of which comprise the Great Northern Railway System, stood as follows on the condensed balance sheet for the fiscal year ending Jime 30, 1911: [ 283 ] Capital stock $209,990,750 Funded debt 143,757,909 Nominal capital $353,784,659 Rentals capitalized @ 5% 15,089,000 Gross capitalization $368,837,659 Securities owned 60,264,516 Net capitalization $308,573,143 Net capital per mile operated $41,874 Average miles operated 7,369 Net income to net capital 10.5% Fixed charges to net income 33.0% Margin of safety 67.0% The total stocks and bonds of the Great Northern, as shown above, amounted to over $353,000,000. On the basis of 7,177.57 miles actually owned by the Great Northern Railway and con- trolled companies, this gives a capitalization per mile of road of $49,285. The Northern Pacific, with 6,297 miles owned in fee, has a nominal capitalization of $69,773 per mile, while the Chicago, Burlington & Quincy shows $36,400 per mile for the 8,808 miles directly owned. There have been no increases in the capital stock of the company since May 1, 1908, when 600,000 shares were issued under the resolution adopted by the board of directors December 11, 1906. As of May 1, 1911, the company executed and delivered to the Bankers Trust Company as Trustee, its mortgage to secure an issue of not to exceed $600,000,000 First & Refunding Mortgage Gold Bonds maturing July 1, 1961. Under the terms of this mortgage all prior mortgages become closed and no additional bonds may be issued thereunder. Of the $600,000,000 face value of First & Refunding Mortgage Bonds provided for, $332,162,000 have been reserved to refund the prior mortgage bonds of the company and the Northern Pacific-Great Northern-Chicago, Burlington & Quincy Collateral 4% Joint Bonds, $100,000,000 are reserved to be issued at the rate of not exceed- ing $3,000,000 per annum for the construction or acquisition of additional railways and equipment; $92,838,000 are reserved to cover the cost of acquisition, after January 1, 1912, of the bonds and stocks of other companies; $30,000,000 are reserved to cover the cost of property acquired after May 1, 1911, and $45,000,000 were issued as 4J4% bonds upon the execution and delivery of the mortgage. $35,000,000 of these were sold at that time. It is interesting to compare the increase in capital with the increase in earnings since 1900. It will be seen by the following table that while the capitalization of the system increased 81%, its gross earnings increased over 113%: Total capital Gross earnings $195,636,397 $28,910,789 353,748,659 66,197,819 1900 . 1911 . Capital stock $98,882,700 209,990,750 Funded debt $96,753,697 143,757,909 Per cent increase . . . . $158,112,262 $37,287,030 81% 129% It will be noted that the net capitalization of the Great Northern System in 1912 was $41,874 per mile of road operated. On this net capital the system earned 10.5%. This compares with 8.7% earned in 1911, the lowest figure reported in ten years, with the single exception of 1908, when the company reported a net income to net capital of 8.2%. The Northern Pacific, with a net capital per mile of $66,933, earned a net income equivalent to 7.6% on that amount, while the Chicago, Burling- ton & Quincy reported net earnings of 9.7% on $32,136 net capital per mile. [284] Train Freight Average rate earnmgs per ton tons per mile 548 $41,270,191 $.0077 509 40,311,420 .0078 502 39,464,810 .0081 518 46,675,733 .0082 524 43,379,174 .0081 601 47,877,369 .0077 During the five years ending 1912 the average net income to net capital of the Great Northern was 9.2% as compared with 9.0% for the Chicago, Burlington & Quincy and 7.9% for the Northern Pacific. CHARACTER OF TRAFFIC The Great Northern gives no report of the character of its tonnage. It is a well-known fact, however, that the Pacific Extension developed a big lumber traffic eastbound, while westbound tonnage has been stimulated by Asiatic trade through the purchase of a steamship line to the Orient. The road also reaches the heart of the grain belt of the Northwest. Another important item of traffic is derived from the iron ore properties of the Lake Superior region. This always proves a mainstay when other companies are suffering from crop shortages. Following are some of the more important traffic statistics of the Great Northern for the years 1907 to 1912 inclusive: Year Freight density 1907 897,719 1908 783,127 1909 711,222 1910 808,957 1911 739,576 1912 845,123 It will be seen that the freight density — • the number of tons carried one mile per mile of road operated — has never approached the high figures of 1907, although the generally higher rates which have prevailed since 1909 have kept freight earnings higher than at that time. The opera tmg efficiency of the Great Northern has been steadily improving since 1908, as is evidenced by the average number of revenue tons per train per mile. Ten years ago the Great Northern reported an average train load of 447 tons. In 1912 this figure had increased nearly 35% to 601 tons, and has fairly outstripped the Northern Pacific and the Chicago, Burlington & Quincy, which reported 511 and 438 tons respectively for the fiscal year ending 1912. The development of passenger traffic has been more than satisfactory. Measured by gross earn- ings this business represented in 1912 over 20% of the entire traffic. Since 1902 the passenger density — the number of passengers carried one mile per mile of road operated — has increased 36%, while earnings from this source have increased over 104%, as will be seen by the following table: Year Passenger Passenger Average rate density earnings per passenger per mile 1902 54,547 $6,662,173 $.0233 1907 74,655 11,048,927 .0237 1908 74,765 11,189,533 .0227 1909 72,032 10,977,948 .0224 1910 92,497* 14,311,800 .0220 1911 81,521 13,422,057 .0227 1912 74,344 13,623,009 .0248 * Due to heavy traffic, caused by the Alaska- Yukon Pacific Exposition at Seattle. [ 285 ] EARNINGS The gross and net earnings of the Great Northern System, both actual and per mile, are given below for the six years ending 1912. In 1907 gross earnings, as well as net earnings, were the largest the company had ever reported. Year Average Gross Per mile Net Per mile miles earnings earnings operated 1907 5,982 $55,144,402 $9,218 $22,581,626 $3,775 1908 6,594 54,429,632 8,254 18,271,577 2,771 1909 6,808 53,687,444 7,886 21,133,957 3,104 1910 7,020 64,465,369 9,183 25,187,274 3,587 1911 7,244 61,257,632 8,455 23,657,241 3,265 1912 7,369 66,197,819 8,983 28,535,273 3,872 Per cent increase in gross for period 20.0% Per cent increase in net for period 26.4% In 1908 gross earnings fell 3% and net earnings 24%. The cost of conducting transportation was curtailed to parallel the decline in gross earnings, but maintenance charges increased over $4,300,000. This caused an increase in total operating expenses of $3,600,000, and the operating ratio rose from 59.05% in 1907 to 66.43% in 1908. A still further reduction in gross earnings in 1909 was more than offset by a reduction of nearly 10%, in operating expenses, resulting in a substantial gain in net earniags. Improved business conditions, which were reflected in the company's earnings in February, 1909, continued through the entire year, bringing about in 1910 the largest gross and net earnings for one year ever reported by the company up to that time. Both increased nearly 20%. The earn- ings for 1911 were affected by the light grain crops in the fall of 1910. The nominal set back of that year was more than offset by a gain in gross in the fiscal year of 1912, of nearly $5,000,000 due to the large increase of product of agriculture and mines carried. As a result, a new high record for gross earnings was made in 1912. Almost all this gain in gross was saved for net earnings, the company's operating ratio falling from 61.38% in 1911 to 56.89% in 1912. MAINTENANCE From 1900 to 1906 the Great Northern showed an operating ratio of about 50%, an exception- ally low figure in comparison with other roads of its class. This was evidently due to the fact that maintenance charges were being kept down. In 1907 and 1908 this policy underwent a radical change, and whereas in 1905 oiJy $973 per mile was spent for maintenance of way, in 1910 $1,077 was thus expended and $1,251 in 1912. Charges for equipment rose from $655 per mile in 1905, to $1,071 in 1910 and $1,065 in 1912, and it is significant that the average operating ratio since 1907 has been in the neighborhood of 61%, a more normal figure. Following are the amounts which the Great Northern has spent for maintenance, also figured on a per mile basis, for the years 1906 to 1912 inclusive: Year Maintenance of Total Per Per cent to Way Equipment maintenance mile gross earnings 1906 $6,453,240 $4,820,649 $11,273,889 $1,908 22.0% 1907 8,024,889 5,622,513 13,647,402 2,280 24.8 1908 10,030,877 7,917,388 17,948,265 2,722 33.0 1909 9,797,370 6,173,846 15,971,216 2,345 29.7 1910 11,773,314 7,520,634 19,293,948 2,748 29.9 1911 9,654,776 7,681,270 17,336,046 2,393 28.3 1912 9,220,286 7,854,687 17,074,973 2,316 25.8 [ 286 ] ADDITIONS AND BETTERMENTS Considerable sums have been expended in recent years for additions and betterments. On its balance sheet of June 30, 1912, we find the cost of additions and improvements made to the property of the Great Northern Railway Company and paid for from the "Fimd for Permanent Improvements and Betterments" was $27,510,280. The annual reports of the company since 1908 show the amounts thus expended : Year Additions Betterments Total 1908 $2,265,354 $2,174,586 $4,439,940 1909 1,744,046 2,251,893 3,995,939 1910 2,350,499 2,523,985 4,874,484 1911 2,239,780 4,164,257 6,404,037 1912 1,300,262 1,209,464 2,509,726 $9,899,941 $12,324,185 $22,224,126 The foregoing shows over $22,000,000 spent for additions and betterments during the five years, or an average of nearly $4,500,000 annually. Of the above, $860,023 was expended upon controlled roads in the Dominion of Canada. Of late years it has been the custom of the road to charge its entire surplus after dividends, to betterments. The amounts which have been set aside from income since 1907 are as follows: Year Amount 1908 $2,468,832 1909 2,789,960 1910 2,319,158 1911 2,818,337 1912 4,252,000 Total for five years $14,648,287 Average per year 2,929,657 DIVIDENDS Since the Great Northern Railway was chartered in 1889, the following dividends have been earned and paid: Year Rate Year Bate 1890 1% 1897 53^% 1891 43^ 1898 6H 1892-6 5 1899-1912 7 It will be noted that the dividend rate was never reduced, once it was established. It is quite remarkable, too, that the company was able to pay 5% dividends through the panic years of 1893 and following. The Profit and Loss Account of the Great Northern System stood on its condensed balance sheet of June 30, 1912, at $40,953,272. This amount, together with $29,450,322 representing "unexpended balances," makes a total of $70,403,594, which is equivalent to 33% of the outstanding capital stock. [ 287 ] STATISTICS Following are the capitalization, earnings and traffic statistics of the Great Northern Railway, based on the average niiles operated, for the year 1900 and the years 1905 to 1912 inclusive. The fig- ures used in 1900, and 1905 to 1907 inclusive, are those of the Great Northern Railway, the Mon- tana Central Railway, the Willmar & Sioux Falls Railway, and the Duluth, Watertown & Pacific Railway. From 1908 the figures used are those of the Great Northern Railway and the lines inde- pendently operated; namely, the Minneapolis Western Railway and the Duluth Terminal Railway. In the following tables "Funded debt" includes bonds assumed by the Great Northern Rail- way and the obligations of the Minneapolis Western Railway. The Great Northern-Northern Pacific-Chicago, Burlington & Quuicy Collateral Trust Joint 4s are not included in the "Funded debt," hence the Chicago, BurUngton & Quincy stock, as collateral, is not included among the securities shown in the column "Owned by company." [ 288 THE GREAT NORTHERN RAILWAY Fiscal Capita Funded Rente! Gross Owned by Net Averaije Extra year stock debt at 5% capital company miles main operated 5,075 track 1900 $19,484 $19,064 $773 $39,321 $5,727 $33,594 74 1905 21,793 18.884 348 41,025 9,900 31,065 5,723 107 1906 25,380 10,971 351 42,702 11,964 30,738 5,906 110 1907 30,847 16,701 344 47,892 15,752 32,140 5,982 114 1908 31,841 14.855 534 47,230 5,834 41,396 6,594 149 1909 30,841 14,691 678 46,210 6,202 40,008 6,808 163 1910 29,910 15,581 727 46,224 6,816 39,408 7,020 165 1911 28,987 19,924 1,828 50,739 8,754 41,985 7,244 201 1912 28,496 19,508 2,048 50,052 8,178 41.874 7,369 201 Fiscal Gross Maintenance Transportation Net Other Totel net FLxed Surplus year operating and general operating income income charges avaUable $5,696 Way $853 Equipment $410 expense revenue for dividends 1900 $1,668 $2,765 $988 $3,753 SI, 171 $2,582 1905 7,605 973 655 2,118 3,859 272 4,131 1,190 2,932 190G 8,681 1,092 816 2,469 4,304 234 4,538 1.178 3,352 1907 9,218 1,341 939 3,163 3,775 438 4,213 1,180 3,042 1908 8,254 1,522 1.200 2,761 2,771 634 3,405 1,131 2,274 1909 7,886 1,439 906 2,437 3,104 587 3,691 1,123 2,568 1910 9,183 1,677 1,071 2,848 3,587 213 3,800 1,267 2.533 1911 8,455 1,333 1,060 2,797 3,265 411 3,676 1,259 2.417 1912 8,983 1,251 1,065 2,793 3,872 518 4,390 1,452 2.938 Fiscal Dividends Dther .Surplus Operating Totel Conduc ling Fis ed Gross Net Per cent year charges expenses maintenance transporta- charges earnings income earned on to to gross to gross tion to ?ross to g ross to gross to net capitel i- $354 $966 earnings earnings earnings earnings capital capitel 11.2% stock 1900 $1,262 51.46% 22.2% 29.3% 20.6% 14.5% 13.2% 1905 1,519 524 889 49.26 21.5 27.8 15 6 18.5 1S.3 13.4 1906 1,549 857 946 50.42 22.0 28.4 13 5 20.3 14.8 13.3 1907 1,806 825 411 59.05 24.8 34.3 12.8 19.2 13.2 9.9 1908 1,898 376 66.43 33.0 33.4 13.7 17.5 8.2 7.1 1909 2,159 409 60.64 29.7 30.9 14.2 17.1 9.2 8.3 1910 2,094 330 109 60.93 29.9 31.0 13.8 19.9 9.6 8.4 1911 2,029 388 61.38 28.3 33.1 14.9 16.6 8.7 8.3 1912 1,995 577 366 56.89 25.8 31.1 16.2 17.9 10.5 10.3 Fiscal Train Maintenance Conduct- Train Rate per mile Freight Trair 1 Freight Passenger, year mile per revenue ing trans- mile density load to all freight earnings (gross) train mile portetion eariungs Per Per revenue traffic and per revenue (net) passenger ton tons company Way Equipment train mile cars 1900 $2.62 $ 392 $.191 $.764 $1.27 $.0238 $.0090 493,555 357 78% 23.351 1905 2.98 381 .256 .833 1.51 .0238 .00792 728,666 522 76 33,429 1906 3.08 388 .289 .873 1.53 .0235 .00791 835,342 529 76 35,554 1907 3.09 449 .315 1.066 1.26 .0237 .00769 897,719 548 75 40,711 1908 2.97 .546 .431 .995 .996 .0227 .00781 783,127 509 74 44,692 1909 2.99 546 .344 .926 1.18 .0224 .00815 711,222 502 73 44,784 1910 2.96 543 .347 .924 1.16 .0220 .00821 808.957 518 72 46,809 1911 2.80 442 .352 .931 1.09 .0227 .00809 739,576 524 71 48,804 1912 3.00 419 .357 .944 1.30 .0248 .00768 845,123 601 72 50,450 [ 289 BOND DESCRIPTIONS Following are descriptions of the bond issues of the Great Northern Railway System, together with the bases upon which they have sold during the decade, ending December 31, 1912: ST. PAUL, MINNEAPOLIS & MANITOBA RAILWAY Consolidated Mortgage Sinking Fund 6s, 4^25 and 4s Dated May 1, 1883 Maturing July 1, 1933 Interest payable January 1 and July 1 at 32 Nassau Street, New York City. Coupon bonds of $1,000, registerable as to principal only, or fully registerable. Registered bonds of $1,000. Authorized $50,000,000 Outstanding 6s $13,344,000 4Hs 21,220,000 4s 8,569,000 Per mile .... 16,900 Provisions of These bonds have been limited by the terms of the Great Northern Railway First & Refunding issue: Mortgage 4I4S of 1961 to an issue of $43,223,000, of which $43,114,000 are outstanding as above. Under the terms of the 43^s of 1961, a sufficient number of the same have been re- served to provide for the retirement of this issue. Security: The above bonds are secured by a direct mortgage on 2,551.67 miles of road, covering over two-thirds of the company's entire mileage; also on securities, lands, buildings and equipment of the company and future acquisitions. They are secured by a first mortgage on the company's terminals at St. Paul and ]Minneapohs; on the land grants of the company, and on 2,549.04 miles of road. They are further secured by a second mortgage on 2.63 miles of road of the Minneapolis Union Railway, covered by the first lien of the Minneapolis Union Railway First 5s and 6s of 1922. These bonds are ASSUMED by the Great Northern Railway Company. Sinking fund: The proceeds of the company's land sales are pledged for the payment of interest, and re- demption of the principal of these bonds semi-annually upon two weeks' notice. The trustee shall purchase the bonds at the lowest price or in the open market if so obtainable at a lower rate than any proposal, and bonds so purchased shall be cancelled. Trustee : Central Trust Company, New York. The St. Paul, IMinneapolis & Manitoba Railway was organized under tlie laws of Minnesota, May 23, 1879, as the result of a foreclosure sale of the St. Paul & Pacific Railroad. The property of the company was leased to the Great Nortliern Railway Company for 999 years from February 1, 1890, at an annual rental equivalent to interest on the funded debt and dividends of 6% on the outstanding capital stock. The St. Paul, Minneapolis & Manitoba Railway's property was conveyed to the Great Northern Railway in 1907 and operated as an integral part of its system. The 6% bonds sold in 1902 on a 3.75 to 4.05 basis 1903 3.95 4.37 1904 4.00 4.20 1905 3.70 3.88 1906 3.75 4.00 1907 4.05 4.70 1908 4.00 4.25 1909 3.90 4.15 1910 4.05 4.25 1911 4.10 4.25 1912 4.15 4.40 [292] The 41^% bonds sold in 1902 on a 1902 on a 3.65 to 3.85 1903 3.87 4.15 1904 3.77 4.05 1905 3.63 3.85 1906 3.75 4.05 1907 4.00 4.37 1908 3.77 4.37 1909 3.80 4.10 1910 4.00 4.25 1911 4.05 4.15 1912 4.10 4.25 The 4% bonds sold in 1909 on a 4.15 basis (bid) 1910 4.00 4.15 1911 4.05 4.10 1912 4.00 4.20 The above bonds are considered a legal investment for savings banks in New England. ST. PAUL, MINNEAPOLIS & MANITOBA RAILWAY Montana Extension First Mortgage Gold 4s Dated June 1, 1887 Maturing June 1, 1937 Interest payable June 1 and December 1 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal only, or fully registerable. Registered bonds of $1,000 and $5,000. Authorized $25,000,000 Outstanding $10,185,000 Per mile . . 9,370 Provisions of In addition to the $10,185,000 in the hands of the public, $11,502,000 are deposited with the issue: trustee of the Pacific Extension First 4s of 1940. No more of these bonds may be issued under the terras of the mortgage of the Great Northern First & Refunding 43<4S of 1961, a sufficient number of which have been reserved to retire the outstanding bonds. Security: The above bonds are secured by a direct mortgage on 1,087.36 miles of the company's road extending from the Montana-North Dakota State Line to Great Falls, and on all roads and branches now owned or hereafter acquired in Montana, and equipment. They are secured by a first mortgage on 837.18 miles, including the 411.59 miles from the North Dakota-Montana State Lme to Great Falls, Mont., and the 401.48 miles from the Idaho State Line to Pacific Junction, Mont. They are secured by a second mortgage on the 249.18 miles covered by the Montana Central First Mortgage 5s and 6s of 1937. These bonds are ASSUMED by the Great Northern Railway. Central Trust Company of New York. Trustee: For the history of the St. Paul, Minneapolis & Manitoba Railway Company, see page 292. [ 293 ] These bonds sold in 1902 on a 3.55 to 3.87 basis 1903 3.80 4.00 1904 3.75 4.00 1905 3.70 3.85 1906 3.75 4.00 1907 3.98 4.40 1908 4.00 4.35 1909 3.95 4.15 1910 4.00 4.15 1911 4.10 4.30 1912 4.10 4.30 These bonds are considered a legal investment for savings banks in New England. ST. PAUL, MINNEAPOLIS & MANITOBA RAILWAY Pacific Extension First Mortgage Gold 4s Dated July 1, 1890 Maturing July 1, 1940 Interest payable January 1 and July 1 at 32 Nassau Street, New York, and at Baring Brothers, London. Principal and interest payable in sterling at the rate of 4s I3^d to the dollar. Coupon bonds of £100, £500 and £1,000, registerable as to principal only, or fully registerable. Registered bonds of £1,000. Authorized £6,000,000 Outstanding £6,000,000 Per mile . . £7,060 Security: The above bonds are secured by a mortgage on 850.29 miles of the company's road, and on lands, buildings, rolling stock and franchises now owned or hereafter acquired for use on or in connection with this line. They are secured by a first mortgage on the company's line from Everett, Wash., to the Idaho-Montana State Line, 433.11 miles, and by a second mortgage on 417.18 miles, including the line from the Idaho-Montana State Line to Pacific Junction, Mont., 401.48 miles, which is covered by a part of the first mortgage of the Montana Ex- tension 4s of 1937. They are also secured by deposit with the trustee of $11,502,000 Montana Extension 4s of 1937, which cover as a first lien the above mileage in Montana. Equity: These bonds are prior in hen to the Great Northern Fu-st & Refunding 4i<^s of 1961, which provide for the retirement of this issue at maturity. These bonds have been ASSUMED by the Great Northern Railway Company. Trustee : Central Trust Company, New York. For the history of the St. Paul, Minneapolis & Manitoba Railway Company, see page 292. These bonds sold in 1909 on a 4.30 basis (bid) 1910 4.45 (bid) 1911 4.45 December, 1912 4.45 (bid) These bonds are considered a legal investment for savings banks in New England. r 294 1 EASTERN RAILWAY OF MINNESOTA Northern Division First Mortgage 4s Dated April 1, 1898 Maturing April 1. 1948 Interest payable April 1 and October 1 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to prmcipal or fully registerable. Registered bonds of $5,000. Authorized $15,000,000 Outstanding $9,695,000 Per mile . . 34,100 Provisions of By the terms of the mortgage of the Great Northern First & Refunding 4Ms of 1961, the au- issue: thorized amount of this issue has been limited to those bonds at present outstanding. Security: The above bonds are secured by a first mortgage on 284.36 miles of the company's line includ- ing the line from Boylston, Wis., to Fosston, Minn., and branches. They are further secured by a first mortgage on the company's terminals and wharves in Duluth and West Superior, also upon the equipment of the lines and future acquisitions. These bonds have been ASSUMED by the Great Northern Railway Company. Equity: These bonds are prior in lien to the Great Northern First and Refunding 43':i's of 1961, a suffi- cient number of which have been reserved to retire this issue at maturity. Redemption: The above bonds are redeemable at 105 and interest on any date after April 1, 1928, upon three months' notice. Trustee: Bankers' Trust Company, New York. The Eastern Railway Company of INIinnesota was organized August 13, 1887, by special per- mission of the Territory of Minnesota, under the charter of tlie Minneapolis & St. Cloud Railroad Company. The company's road from Hinckley to West Superior was opened for traffic September 23, 1888. On May 1, 1902, the properties of this company were leased for 99 years to the Great Northern Railway Company at an annual rental equivalent to the interest on the company's bonded debt and dividends at the rate of 6% per annum on the capital stock, all of which was owned by the lessee. Together with other proprietary companies, the Eastern Railway Company of Minnesota was consolidated into the system of the Great Northern Railway in 1907. These bonds sold in 1909 on a 3.92 to 4.10 basis 1910 4.02 1911 4.20 1912 4.10 to 4.20 These bonds are considered a legal investment for savings banks in New England. 295 THE MONTANA CENTRAL RAILWAY First Mortgage 5s and 6s Dated July 1, 1887 Maturing July 1, 1937 Interest payable January 1 and July 1 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and $5,000. Authorized $10,000,000 Outstanding (5s) $4,000,000 (6s) 6,000,000 Per mile .... 40,100 Security: The above bonds are secured by a first mortgage on 249.18 miles of the company's road, in- cluding the line from Great Falls to Butte, Mont., 169.27 miles, and branches. They are fur- ther secured by a first mortgage on the company's equipment, lands and all future acquisitions. These bonds have been ASSUMED by the Great Northern Railway Company. Equity: These bonds are prior in lien to the St. Paul, Minneapolis & Manitoba Montana Extension 4s of 1937, and the Great Northern First & Refunding 4j^s of 1961, a sufficient number of which have been reserved to retire this issue at maturity. Trustee: Central Trust Company, New York. The Montana Central Railway Company of Minnesota was organized January 25, 1886. The com- pany's main line and branches were opened as constructed at various times, between 1887 and 1893. The company was controlled by the Great Northern Railway Company through ownership by the latter of its entire capital stock, and its operations were included in the statement of the Great Northern. Together with other proprietary companies, the Montana Central Railway Company was con- solidated into the Great Northern Railway Company in 1907. The First 5s of 1937 sold in 1902 on a 3.70 to 3.75 1903 4.10 4.40 1004 4.10 4.20 1905 3.90 4.00 1906 3.90 4.10 1907 4.10 4.70 1908 4.15 4.30 1909 4.00 4.20 1910 4.15 4.37 1911 4.20 1912 4.25 4.40 The First 6s of 1937 sold in 1902 on a 3.85 to 4.15 1903 4.12 4.15 1904 4.05 4.15 1905 3.95 4.05 1906 3.95 4.10 1907 4.15 4.50 1908 4.20 4.30 1909 4.05 4.15 1910 4.20 4.40 1911 4.15 4.25 1912 4.20 4.37 These bonds are considered a legal investment for savings banks in New England except in Maine. [296 ] WILLMAR & SIOUX FALLS RAILWAY First Mortgage 5s Dated June 1, 1888 Maturing June 1, 1938 Interest payable June 1 and December 1 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $2,625,000 Outstanding $3,625,000 Per mile . . 11,900 Provisions of Besides the amount authorized as above, there have been additional bonds authorized for issue: construction and purchase of branches at a rate not to exceed $17,500 per mile. To date $3,646,000 of these bonds have been issued, and under the terms of the Great Northern First & Refunding 4}is of 1961 this mortgage is closed. Beside the amount outstanding, as above, $21,000 of these bonds are held by the trustee of the First & Refunding 41^48 of 1961, a sufficient number of which have been reserved to acquire all those at present outstanding. Security: The above bonds are secured by a first mortgage on the company's road from Willmar, Minn., to Sioux City, la., 223.15 miles, and also the line from Garretson to Yankton, S. D., 80.94 miles. All the equipment and future acquisitions of these lines are included under the mortgage. These bonds have been ASSUMED by the Great Northern Railway Company. Trustee : Central Trust Company, New York. The Willmar &: Sioux Falls Railway Company was chartered under the laws of the State of Minnesota INIarch 3, 1886, and its road was opened for traffic from Willmar to Yankton, South Da- kota, 205 miles, on November 1, 1893. In 1900 the company acquired the Sioux City & Northern Railroad, the Sioux City & Western Railway, and the property of the Sioux Falls Terminal Railroad. This company, up to 1907, was controlled by the Great Northern Railway Company through ownership of its entire capital stock, and its operations were included in those of the latter. The property of the Willmar & Sioux Falls Railroad Company was formally consolidated into that of the Great Northern Railway Company in 1907. These bonds sold in 1902 on a 3.70 to 3.75 basis 1903 4.20 1904 4.05 1905 3.85 1906 4.12 1909 4.02 to 4.08 1910 4.25 (bid) 1911 4.20 to 4.23 December, 1912 4.45 (bid) These bonds are considered a legal investment for savings banks in New England. 297 ] MINNEAPOLIS UNION RAILWAY First Mortgage 5s and 6s Dated March 1, 1882 Maturing July 1, 1922 Interest payable January 1 and July 1 at 32 Nassau Street, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $3,000,000 Outstanding (5s) $650,000 (6s) 2,150,000 Provisions of Under the indenture of the Great Northern First & Refunding 4j^s of 1961, this mortgage issue: is closed. Security: The above bonds are secured by a first mortgage on 2.6 miles of double track and 4.75 miles of sidings extending from the Union Stock Yards to the Union Depot in Minneapolis, includ- ing the bridge across the Mississippi River and the Union Depot of Minneapolis. These bonds are ASSUMED by the Great Northern Railway Company. Equity : The above bonds are prior in lien to the St. Paul, Minneapolis & Manitoba Consolidated bonds of 1933 and also prior to the Great Northern First & Refunding i}4s of 1961, a sufficient num- ber of which have been reserved to retire this issue at maturity. Trustee : Central Trust Company, New York. The Minneapolis Union Railway Company was organized under the laws of the State of Minne- sota, November 28, 1881. It opened the bridge over the Mississippi River, September 1, 1884. The business of the company was to supply terminal facilities to other companies. The propertj% which was consolidated into the Great Northern System in 1907, is now used by the Great Northern Rail- way, the Northern Pacific Railway Company, the Chicago, St. Paul, Minneapolis & Omaha Railway, the Chicago, Burlington & Quincy Railway and the Wisconsin Central Lines. The First 6s of 1922 were so Id in 1905 ' on a 4.05 to 4.10 1909 4.27 1910 4.40 4.60 1911 4.10 4.35 1912 4.05 4.25 These bonds are considered a legal investment for savings banks in New England except Connecticut. [ 298 ] SPOKANE FALLS & NORTHERN RAILWAY First Mortgage 6s Dated July 1, 1889 Maturing July 1, 1939 Interest payable January 1 and July 1 at 32 Nassau Street, New York City, Coupon bonds of $1,000, registerable as to principal. Authorized $20,000 per mile Outstanding $229,000 Per mile . . 21,400 Provisions of The total amount of these bonds issued was $2,812,000, of which $2,583,000 are held by the issue: trustees of the Great Northern First & Refunding 43^s of 1961, under the terms of whose mort- gage no more of these bonds may be issued. Security: The above bonds are secured by a first mortgage on 130.14 miles of the company's road in- cluding the line from Dean, Wash., to the International Boundary Line, 125.8 miles. These bonds have been ASSUMED by the Great Northern Railway Company. Equity: The above bonds are prior in lien to the Great Northern First & Refunding 4}<4S of 1961, a sufficient number of which have been reserved to retire this issue at maturity. Trustee: Manhattan Trust Company, New York. The Spokane Falls & Northern Railway Company was chartered April 14, 1888, and its road was opened throughout on June 26, 1893. Up to the time that it was formally merged into the Great Northern Railway System in 1907, the latter controlled the Spokane Falls & Northern Railway Com- pany through ownership of its entire capital stock and the total issue of bonds. These bonds quoted in 1905 on a 4.25 basis 1909 4.95 1910 5.15 1911 5.30 December, 1912 5.40 These bonds are considered a legal investment for savings banks in New England. [ 299 ] THE GREAT NORTHERN RAILWAY First & Refunding Mortgage Gold 4ViS Dated May 1, 1911 Interest payable January 1 and July 1 at 32 Nassau Street, N( Maturing July 1, 11)01 York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and multiples. Coupon and registered bonds interchangeable. Authorized $600,000,000 Outstanding $35,000,000 Provisions of To date but $45,000,000 of these bonds have been issued, $10,000,000 being in the treasury of issue: the company, and the balance outstanding as above. Those unissued have been reserved as follows : $332,162,000 to refund prior mortgage bonds and the Northern Pacific-Great Northern C. B. & Q. 4% Collateral Joint bonds. 100,000,000 to cover cost of construction and acquiring additional railways and equipment, and for additions and betterments at not exceeding $3,000,000 per annum. 92,838,000 to cover cost of acquisition after January 1, 1912, of the bonds and stock of other companies. 30,000,000 to cover the cost of property acquired after May 1, 1911, for the acquisition of which bonds are not otherwise authorized in this mortgage. Security : The above bonds are secured by a first lien on the equipment owned by the company, costing $46,200,068; on 2,070.46 miles of main and branch line railway within the United States be- longing to the company; and through deposit with the trustee, of the entire share capital (except directors' shares) of proprietary companies, on 13.05 miles of additional railway in the United States and on 553.74 miles of railway in Canada with its equipment. Subject to the lien of underlying mortgages at an average rate of $22,822 per mile, these bonds are also a lien on 4,791.42 miles of railway with its equipment. Redemption: The above bonds are redeemable at 105 and interest after January 1, 1941, upon 90 days' notice. Trustee: Bankers' Trust Company, New York. These bonds sold in 1911 on a 4.20 to 4.25 basis 1912 4.15 4.25 These bonds are considered a legal investment for savings banks in Maine, Vermont, Massachusetts and Rhode Island. [ 300 ] ILLINOIS CENTRAL RAILROAD COMPANY ILLINOIS CENTRAL RAILROAD COMPANY HISTORY In January, 1850, a bill was introduced in Congress providing for a grant to the State of Illinois of public land to the extent of 3,840 acres per mile to aid in the construction of a railroad north and south from Cairo to Chicago. Shortly after this bill was approved, the Illinois Central Railroad Company was organized and petitioned the Legislature of Illinois for authority to build the road. Its charter was granted February 10, 1851, and the company at once set vigorously to work to carry out its undertaking. The first engineering partly was organized in the following May, and by the end of the year the entire line had been surveyed. The first contract was let March 15, 1852, and the first portion of the main line was opened for traffic May 24, 1852. The entire road, then 705.05 miles, was completed and put into operation September 27, 1856. The act of mcorporation of the Illinois Central Railroad Company surrendered to the latter all the property acquired by the state to construct a railroad, including the United States Government lands. The latter consisted of 2,595,000 acres situated along the line of the road. The charter ex- empts the company's property from taxation in the state, but in lieu thereof requires the payment to the latter of 7% of the gross receipts of the original railroad. The amount paid the State of Illinois under this provision, from the opening of the road in 1855 to the present time, is over $30,000,000. The Illinois Central Railroad owns practically the entire system which it operates. Only in the Dubuque & Sioux City Railroad Company may there be said to be minority interests not controlled by the former. The first addition made to the system was through the lease of this same Dubuque & Sioux City Railroad on September 13, 1867. The Dubuque & Sioux City was a reorganization in 1860 of the Dubuque & Pacific Railroad Company which had been chartered in 1856 to construct a rail- road from Dubuque to Sioux City, la. The Illinois Central lease was assumed for 20 years and a force was put to work to complete this road as originally planned. The line was opened for traffic on October 10, 1870, so that by the close of that year the Illinois Central owned and operated a con- tinuous system of railroads extending from Chicago to Cairo and from Centralia to the Mississippi River at Dubuque and Sioux City on the Missouri River, a total of 1,112 mUes. In 1870 an organization known as the Southern Railroad Association was formed and ac- quired control of the numerous railroads in Louisiana and Mississippi. In the following year the Illinois Central managers conceived the idea of extending their system into the South, and realizing the value of the roads acquired by this association, entered into a traffic agreement with it. The connection between the Illinois Central and the Southern Lines was supplied by transfer steamers until 1887, when the Chicago, St. Louis & New Orleans Railroad, the company resulting from the amalgamation of these Southern Lines, built a bridge across the Ohio River. This bridge was opened for traffic October 29, 1889, and the river transfer was discontinued. July 1, 1882, the Illinois Central took a four-hundred-year lease of the Chicago, St. Louis & New Orleans Railroad, assuming all the bonded and other obligations of that road and guaranteeing 4% per annum on its capital stock. In that same year construction was begun on the Yazoo & Missis- sippi River Valley Railroad, which in 1892 was consolidated with the Louisville, New Orleans & Texas Railroad, extending from Memphis, Tennessee, to New Orleans, and the two together were purchased by the Illinois Central Railroad Company. [ 303 ] To obtain an outlet to the north for business brought into Memphis over the lines of the Illi- nois Central and the Yazoo & Mississippi Valley Railroads, advantage was taken of the low prices prevailing after the panic of 1893 to purchase a controlling interest in the Chesapeake, Ohio & South- western Railroad Company. Later this interest was turned over to the Chicago, St. Louis & New Orleans Railroad and operated as one of its divisions. For the purpose of gaining an independent entrance into St. Louis, the Illinois Central, in 1896, took a lease for 99 years of the railroads operated by the St. Louis, Alton & Terre Haute Company, known as the "Cairo Short Line," agreeing to assume all liabilities and guaranteeing dividends of 234% annually on its stock and 4.8% annually on the preferred stock of its subsidiary, the Belleville & Southern Illinois Railroad. The properties thus acquired now form the St. Louis division of the Illinois Central. The line from Springfield to East St. Louis, Illinois, formerly a part of the St. Louis, Peoria & Northern Railway, was purchased October 1, 1900. During the next three or four years many small roads were purchased and absorbed. The Memphis & State Line Railroad was purchased June 30, 1908, and in November of that same year the stocks and bonds of the Kentucky Valley Railroad were taken over. By far the most important acquisition made by the Illinois Central in the decade ending 1911, was the purchase of the capital stock of the Central of Georgia Railroad Company, in 1909. In June, 1907, this stock, which had been held by the Richmond Terminal Reorganization Committee since 1896, was sold to certain railroad financiers who turned it over to Mr. Harriman of the Union Pacific Railroad Company. This stock was later acquired by the Illinois Central Railroad and for- mally transferred to that company in 1909, at a cost of $3,474,279. Beginning July 1, 1911, the property of the Indianapolis Southern Railroad Company was operated as a part of the Indiana Division of the Illinois Central. The former had been chartered in September, 1899, under the laws of Indiana, to construct a road from Indianapolis to Sullivan, Indiana, 100 niiles. Through various acquisitions the company's mUeage had grown to nearly 200 miles by 1911. In May of that year the property was sold under foreclosure and purchased by the Illinois Central Railroad Company. The Illinois Central, from its organization, had enjoyed an exceptional degree of independence until the formation of the Railroad Securities Company in 1900. This company was created origi- nally in the interests of the Illinois Central, and owned among its assets $8,000,000 of the Illinois Central stock. Later the Railroad Securities Company came under the control of the Union Pacific Railroad Company, and the two by 1906 had practically gained control of the Illinois Central. On June 30, 1911, the Railroad Securities Company owned $9,200,000 of the Ilhnois Central stock, and the Union Pacific owned $22,500,000. PROPERTY On June 30, 1912, the Illinois Central Railroad Company reported the following miles of main track in operation: Charter lines owned 705.50 miles Purchased lines owned 1,561.42 Proprietary lines (stock controlled by I. C.) 2,279.16 Operated by joint agreement, leases, trackage rights, etc. . . . 223.33 Total miles of main track 4,769.41 An average of 4,762.70 miles was under operation during the fiscal year 1912. The Illinois Central is the great north and south line of the Mississippi Valley. Its main lines [ 304 ] connect Chicago and New Orleans at practically water level, entering the latter over the tracks of the Illinois Central and the Yazoo & Mississippi Valley Railroad. Several important branches are included in the system, one from Chicago westerly to Omaha and Sioux Falls, another from Springfield easterly to Indianapolis over the Indianapolis Southern Railroad, and still another easterly from Cairo, Kentucky, to Louisville. Trackage rights from Jackson, Tennessee, open up Birmingham, Alabama, to the Illinois System, and it is at that point that the latter connects with the Central of Georgia Railway, whose system covers the Central South, with lines from Chattanooga via ^Macon to Savannah on the coast, and branches to Mont- gomery, Alabama, \-ia Columbus, also northerly from Macon to Atlanta, Athens, and Augusta, covering the cotton belt and reaching into the coal regions of Alabama and Georgia. The Illinois Central Railroad System serves the States of Illinois, Iowa, Indiana, Tennessee and Mississippi. The combined population of these States, in 1890, was 10,987,000, in 1900, 13,132,000, and in 1910, 14,546,000. CAPITALIZATION The capitalization of the Illinois Central for the fiscal year ending June 30, 1912, was as follows: Capital stock $109,296,000 Leased line stock 9,989,700 $119,285,700 Funded debt 185,736,000 Nominal capital $305,021,700 Rentals capitalized @ 5% 30,734,000 Gross capitalization $335,755,700 Securities owned 83,205,491 Net capitalization $252,550,209 Net capitalization per mile operated $53,024 Average miles operated 4,762.70 Net income to net capital 6.3% Fixed charges to net income 78.3% Margin of safety 21.7% In the above table the leased line stock represents the outstanding stock issued in exchange for an equal amount of Chicago, St. Louis & New Orleans stock, and secured by the deposit in trust of the latter. Its dividends of 4% are guaranteed and in case of default for 60 days, the owners of the leased line stock would be entitled to the return of the Chicago, St. Louis & New Orleans stock thus pledged. The rentals, which have been capitalized at 5%, include the interest on the bonds of the Chicago, St. Louis & New Orleans Railroad Company, and the net interest paid as rental on the Dubuque & Sioux City Railroad. In 1912 these items amounted to $1,536,708. During the fiscal year 1912 there were no changes in the capital stock of the company. There was one minor issue of bonds durmg the year, $1,800,000, being the balance of the company's $10,000,000 authorized Refunding Mortgage Bonds. There were, however, $2,000,000 of the First Lien Equipment 4s of 1923 and $1,515,000 additional bonds delivered to the trustee and cancelled, leaving a net decrease in the company's funded debt of $1,715,000. The company's net capitalization per mile in 1912 was $53,024 as compared with $56,795 in 1911. [ 305 ] The decrease in this figure is, in part, accounted for by the fact that 200 additional miles were oper- ated during the year. The Illinois Central earned a net income of 6.3% on its net capitalization in 1912 as compared with 9.2% in 1911. The average net capitalization per mile of road operated, figured from the company's annual reports for ten years ending June .10, 1912, was $49,035, upon which an average net income of 8.9% was earned. Comparing this record with that of the Louisville & Nashville, a road operating under similar conditions, we find a capitalization figure for the same period of $39,658. Upon this aver- age capitalization, however, the Louisville & Nashville was able to earn but 9.1%. Since 1900 there have been various increases in the capital stock and funded debt of the company. That these increases were justified by the earning capacity of the road can best be shown by the following table: Year Capital stock Funded debt Total Gross earnings 1900 $60,000,000 $120,873,925 $180,873,925 $32,611,967 1912 109,296,000 185,736,000 295,032,000 58,727,272 Increase $114,158,075 $26,115,305 Percent 63% 80% While the nominal capital of the Illinois Central increased 63%, gross earnings increased over $26,000,000, or 80%. The most important increases in capital stock came in the year 1901-1902, when it was nearly doubled, and in 1908, when 285,120 shares of new stock were authorized, the increase being for the purpose of paying for, constructing and improving the lines of the company. In 1904 and 1909 came the larger part of the increase in funded debt, due to the issue of Purchase Line Bonds [distributed over about 750 miles of added track] and Refunding Mortgage 4s (which see). The capital stock outstanding amounts to considerably less than half the estimated net capital- ization, but the credit of the Illinois Central is high. Even after large maintenance charges, fixed charges consumed 78% of the company's total net income, leaving a margin of safety for the interest on its underlying securities of nearly 22%. CHARACTER OF TRAFFIC Measured by the volume of earnings, the Illinois Central's freight business amounts to about two-thirds of the total. No indication as to the character of its traffic was given by the company until 1911, when its report showed the following classification of freight: Products of 1912 1911 1910 Agriculture 18.9% 18.1% 17.8% Animals 2.9 2.8 2.5 Mines 38.1 35.1 36.7 Forests 15.9 16.9 18.0 Manufactures 8.2 8.3 9.8 Miscellaneous 16.0 18.8 15.2 100.0% 100.0% 100.0% It will be noted that 75% of the company's freight traflBc is made up of low grade commodities, such as grain, coal and lumber. This fact has affected the average rate per ton per mile, keeping it down to $.0059 for the decade ending 1912. Following are some of the more important freight statistics of the Illinois Central for the six years ending 1912: [ 306 ] Train Freight Average rate load tons earnings per ton per mile 363 $38,033,270 $.0058 351 35,357,811 .0058 355 36,003,897 .0059 364 38,777,758 .0059 361 40,682,197 .0061 356 37,881,766 .0061 Year Freight density 1907 1,508,206 1908 1,366,186 1909 1,328,963 1910 1,445,998 1911 1,464,482 1912 1,303,979 The average number of tons of revenue freight carried per train in 1902 was but 280. In 1907 the average had climbed to 363. With the exception of a nominal setback in 1908 and 1909, this figure has been maintained up to the present time, showing the generally high standard of operating efficiency during the period. Freight earnings in 1911 were the highest ever reported. They increased nearly 15% from the low figure of the period, while the average rate per ton increased 5% during the same time. Freight earnings declined $2,800,000 during 1912 owing to a severe winter and the floods in the spring on the southern lines, which seriously interrupted traffic. Comparing the average freight density and the average train load tons of the Illinois Central for the decade ending 1912, with those of the Louisville & Nashville Railroad and the Rock Island Lines, we find the Illinois Central excelling both of its freight competitors in these respects : For ten years Average Average ending 1912 freight density train load tons Illinois Central 1,350,600 340 Louisville & Nashville 1,006,030 249 Rock Island Lines 513,365 248 Nearly 20% of the company's business is represented by its passenger traffic. Tabulated below are the passenger densities, earnings and passenger rates per mile of the Illinois Central since 1906: Year Passenger Passenger Average rate density earnings per passenger per mile 1907 130,396 $11,187,533 $.0196 1908 133,891 10,991,798 .0185 1909 130,125 10,865,359 .0183 1910 142,916 11,881,013 .0182 1911 153,294 12,925,004 .0184 1912 148,990 13,337,562 .0188 The number of passengers carried one mile per mile of road operated was but 93,851 in 1902, as compared with 153,294 in 1911, a gain for the decade of 63%. In 1910 the passenger density in- creased 9.8% over the figures reported in 1909, while the gain in revenue from that source amounted to 9.3%, The sharp decline in 1908 in the rate per passenger per mile was due to the reduction of fares from three to two cents, forced upon railroads operating in Illinois and Iowa. A fractional gain in this rate in 1911, together with a substantial increase in the number of passengers carried one mile per mile of road, resulted in the largest gross passenger earnings ever reported. In spite of the decline in passenger density this figure was bettered in 1912 as the result of a substantially higher average rate. [ 307 ] EARNINGS During the six years ending 1912, the IlHnois Central has reported gross and net earnings as follows : Year Average Gross Per mile Net Per mile Operating miles earnings earnings ratio operated 1907 . . 4,370 $56,610,633 $12,954 $18,762,926 $4,296 66.9 1908 . . 4,420 52,830,426 11,951 14,936,948 3,379 71.7 1909 . . 4,547 53,672,336 11,804 15,256,697 3,355 71.5 1910 . . 4,550 57,884,721 12,720 14,563,990 3,200 74.8 1911 . . 4,563 60,977,031 13,362 17,120,803 3,751 71.9 1912 . . 4,763 58,727,272 12,329 10,605,805 2,227 81.9 The general business depression of 1907 and 1908 was reflected in the gross earnings of the Illi- nois Central. For the fiscal year of 1908, gross earnings declined 6.7%, and in spite of transportation economies and every effort to curtail expense, operating costs, as a whole, increased 2%, bringing about a decline in net earnings of over $3,800,000. The company's operating ratio — the ratio of expenses to earnings — increased from 66.9% to 71.7%. This ratio has never been under 71% since that time. In fact, in 1910 it was up to 74.8%, declining in 1911 to 71.9%. This generally higher ratio of expenses to earnings can be traced to increased cost of transportation beginning in 1908, when for every hundred dollars in revenue it cost $41.30 for transportation alone. In 1910, while gross earnings increased $4,200,000, operating expenses were increased $5,000,000, due to a large increase in maintenance costs, bringing about a decline in net earnmgs of nearly 5%. During the fiscal year 1911 the total revenue from operation was the highest in the history of the company, being over $3,000,000 better than the gross revenues reported in 1910. Most of this was saved for net, but even the 1911 net earnings were nearly 9% lower than those of 1907, which is still a high-water mark in that item. During the fiscal year 1912 the Illinois Central suffered about equally from decreased gross earnings and higher operating costs, producing an operating ratio for the year of 81.9%, an ex- tremely high figure. The ratio of conducting transportation to gross earnings increased from 39.4% in 1911 to 45.3% in 1912. Abnormal expenses were encountered, bringing the operating ratio in some months as high as 85%, the principal reason being the strike of the shopmen. This strike began on September 30, 1911, and for several months caused great inconvenience to the company and its patrons. This, together with floods in the spring on the Southern lines, measurably in- creased the expense of maintaining and operating the railroad. As a result of this decline in gross and net earnings, the company was able to show but 3.1% earned on its capital stock, after the payment of fixed charges. This compares with 10.3% earned in 1911. MAINTENANCE The Illinois Central has spent the following amounts for maintenance since 1906: Year Maintenance Total Per mile Way Equipment maintenance 1907 $6,851,450 $9,596,007 $16,447,457 $3,762 1908 6,758,173 9,310,136 16,068,309 3,635 1909 6,196,287 11,265,627 17,461,914 3,841 1910 7,607,891 13,502,250 21,110,141 4,639 1911 7,523,295 12,317,364 19,840,659 4,348 1912 . 7,691,214 13,857,549 21,548,763 4,523 [ 308 ] The large amounts spent for maintenance of equipment in 1910, together with the tendency of the same to increase since 1907, were brought under investigation, which led to the discovery that the company was being defrauded of large sums for work done in repairing locomotives and cars in outside shops. It was found, too, that part of the 1909 repair expenses was unpaid, being included in the 1910 figures. This leak was immediately stopped, as was shown by the reduction in that item in 1911. The increase during the fiscal year 1912 was due to extraordinary expenses incurred during the strike of the shopmen in the fall of 1911. The Illinois Central's per mile figures compare favorably with those of the Louisville & Nash- ville and Rock Island Lines. During the ten years ending 1912 the three roads have averaged an expenditure per mile for maintenance of the following amounts : Illinois Central $3,705 Louisville & Nashville 3,500 Rock Island System 1,973 Each reported an average traffic density for the period of 1,481,240, 1,104,750, and 613,602 respectively. ADDITIONS AND BETTERMENTS In the five years ending June 30, 1912, the Illinois Central charged to capital over $20,000,000 for additions and betterments to road and equipment as follows: Year Road Equipment Total 1908 $1,542,858 $5,796,837 $7,339,695 1909 1,435,276 .... 1,435,276 1910 1,229,252 327,381 1,556,633 1911 2,101,140 1,315,681 3,416,821* 1912 5,006,541 1,771,993 6,778,534* Total for five years $20,526,959 Average for one year 4,105,390 Beside this the following amounts have been appropriated from the earnings of the Illinois Cen- tral Railroad Company for additions and betterments for the decade ending 1912: Year .\mount Year Amount 1902 $4,340,172 1908 $1,046,963 1903 4,881,253 1909 232,267 1904 2,579,329 1910 1905 1,683,886 1911 164,847 1906 4,164,739 1912 61,481 1907 3,987,934 DIVIDENDS Since 1863 the Illinois Central has paid dividends continuously. It paid 8% through the de- pression of the early '70s, and 5% every year in the decade beginning 1890. In 1905 it began to pay 7% on its outstanding stock and has continued this rate up to the present time. Dividends in 1912 were paid from Profit and Loss. Dividend requirements were $7,650,720, * Including betterments to subsidiary lines. [ 309 ] while the company's income sheet showed a surplus available for the same of but $3,466,448. The company felt entirely justified in maintaining the 7% dividend rate in spite of this unsatisfaclorj' showing, because it was felt that the earning difficulties through which it had passed were but tem- porary, and that the fiscal year of 1913 would find the company earning its normal amount. The company reported on June 30, 1912, a Profit and Loss of $2,768,366, which, together with an appropriated surplus of $2,312,588, was equivalent to 4.7% on its outstanding capital stock. STATISTICS Following are the capitalization, earnings and traffic statistics of the Illinois Central Railroad, based on the average miles operated for the year 1900 and for the years 1905 to 1912 inclusive. In the following tables, in "Funded debt," are included the bonds of the Illinois Central, the Chicago, St. Louis & New Orleans Railroad to 1911. In 1911 and 1912 the bonds of the Illinois Cen- tral are used alone. "Rentals" include the net rentals of the Dubuque & Sioux City Railroad up to 1911. In 1911 and 1912 rentals include both net rentals of Dubuque & Sioux City Railroad, and those paid on the Chicago, St. Louis & New Orleans Railroad obligations. [ 310 ] ILLINOIS CENTRAL RAILROAD Fiscal Capital Leased Funded Rentals Gross Owned by Net Average Extra year stock lines stock $2,000 debt ©5% $3,842 capital company capital miles operated 3,845 main track 1900 $15,604 $31,437 $53,483 $11,007 $42,476 248 1905 21,728 2,286 32,892 3,357 60,263 12,531 47,732 4,374 740 1906 21,460 2,260 32,752 5,658 62,130 13,633 48,497 4.424 750 1907 21,748 2,288 33,421 5,962 63,420 15,013 48,406 4,370 751 1908 21,502 2,262 39,831 3,313 66,908 21,119 45,789 4,420 785 1909 24,036 2,199 43,117 4,523 73,875 21,101 52,776 4,547 783 1910 24,021 2,197 43,088 1,985 71,292 21,148 50,144 4,550 790 1911 23,952 2,189 41,080 9,402 76,623 19,828 56,795 4,563 792 1912 22,946 2,097 38,996 6.453 70,492 17,469 53,024 4,763 932 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus year operating and general operating available revenue Way Equipment expense revenue income for $1,448 dividends 1900 $8,481 $955 $3,156 $2,921 $635 $3,556 $2,059 $1,497 1905 11,319 1,394 1,784 4,386 3,755 031 4,386 2,069 2,317 1906 11,672 1,549 1,741 4,462 3,920 736 4,656 2,199 2,457 1907 12,954 1,567 2,195 4,896 4,296 645 4,941 2,264 2,677 1908 11,951 1,529 2,10C 4,937 3,379 685 4,064 2,255 1,809 1909 11,804 1,363 2,478 4,608 3,355 958 4,313 2,514 1,799 1910 12,720 1,672 2,967 4,881 3,200 1,161 4,361 2,641 1,720 1911 13,362 1,649 2,699 5,263 3,751 1,477 5,228 2,749 2,479 1912 12,329 1,614 2,909 5,579 2,227 1,134 3,361 2,633 728 Fiscal Dividends Other Surpl us Operatii g Tota Cond ucting Fixed Gross Net Per cent year charges to expenses maintenance transporta- charges earnings income earned on income to gross to gross tion to gross to gross to gross to net capital earnings earnings earnings earnings capital capital 8.4% stock 1900 $858 $628 $11 65.5% 28.3% 37 2% 24.2% 15.8% 9.6% 1905 1,520 786 11 66.8 28.1 38.7 18.2 19.2 9.2 10.7 1906 1,503 941 13 66.4 28.2 38.2 18.8 18.7 9.6 11.4 1907 1,522 912 243 66.9 29.1 37.8 17.4 20.5 10.2 12.3 1908 1,504 236 69 71.7 30.4 41.3 18.8 17.8 8.9 8.3 1909 1,682 51 66 71.5 32.5 39 21.3 15.9 8.2 7.5 1910 1,681 39 74.8 36.4 38.4 20.7 17.8 8.7 7.1 1911 1,676 36 767 71.9 32.5 39 4 20.5 17.4 9.2 10.3 1912 1,606 13 891 81.9 36.6 45.3 21.3 17.4 6.3 3.1 Fiscal Train Mamtenance Conducting Train Rate per mile Freight Train Freight Passenger, year mile per revenue ransportation mile density load to all freight earnings train mile per revenue earnings Per Per revenue traffic and (gross) train mile (net) passenger ton tons company Way Equipment cars 1900 $1.29 $ 221 $.146 $.482 $.44 $.0202 B.0065 890,974 208 68% 34,106 1905 1.73 213 .279 .670 .57 .0184 .0059 1,270,977 319 66 57,331 1906 1.78 236 .265 .679 .60 .0195 .0055 1,408,403 353 67 59,066 1907 1.87 226 .317 .708 .62 .0196 .0058 1,508,206 363 67 60,836 1908 1.83 233 .322 .756 .52 .0185 .0058 1,366,186 351 67 64,850 1909 1.85 214 .389 .723 .52 .0183 .0059 1,328,963 355 67 63,912 1910 1.88 247 .439 .722 .47 .0182 .0059 1,445,998 364 67 63,150 1911 1.94 239 .392 .765 .54 .0184 .0061 1,464,482 361 67 61,353 1912 1.89 245 .445 .854 .35 .0188 .0061 1,303,979 356 65 58.806 * Deficit. [311] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Illinois Cen- tral Railroad System, together with the bases on which they have sold during the decade ending December 31, 1912: ILLINOIS CENTRAL RAILROAD First Mortgage Gold 4s* Dated April 1, 1875 Maturing April 1. 1951 Interest payable April 1 and October 1 at London, England. Coupon bonds of £200. Authorized $2,500,000 Outstanding $2,500,000 First Mortgage Gold Sj^sf Dated February 16, 1876 Maturing December 1, 1950 Interest payable June 1 and December 1 at London, England. Coupon bonds of £200. Authorized $1,000,000 Outstanding $1,000,000 First Mortgage Gold 4s Dated January 1, 1886 Maturing January 1, 1951 Interest payable January 1 and July 1 at 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $1,500,000 Outstanding $1,500,000 These bonds sold in 1902 on a 3.32 to 3.43 basis 1903 3.40 3.48 1904 3.35 3 45 1905 3.50 3.57 1906 3.57 1907 3.85 4.15 1908 3.85 3.95 1909 3.70 3.90 1910 3.72 3.80 1911 3.85 4.00 1912 3.80 4.00 First Mortgage Gold Sj^s Dated January 1, 1886 Maturing January 1, 1951 Interest payable January 1 and July 1 at 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $2,500,000 Outstanding $2,499,000 These bonds sold in 1902 on a 3.27 to 3.32 basis 1903 3.40 3.52 1905 3.37 3.40 1906 3.52 3.70 1907 3.47 4.05 1908 3.77 3.90 1909 3.75 3.95 1910 3.88 4.02 1911 3.95 4.05 December, 1912 4.10 * These bonds were originally issued as 6s to mature in 1895, but were extended to 1951, and reduced from 6s to 4s. t These bonds were originally issued as 5s to mature in 1905, but were extended to 1950, and reduced from Ss to 3}^3. [ 314 ] First Mortgage Sterling 3s Dated August 31, 1895 Maturing March 1, 1951 Interest payable March 1 and September 1 at London, England. Coupon bonds of £200, registerable as to principal or fully registerable. Authorized $2,500,000 Outstanding $2,500,000 These bonds sold in 1909 on a 3.70 basis (bid) 1910 3.61 1911 3.88 (bid) December, 1912 4.00 (bid) First Mortgage Gold S^s* Dated March 30, 1903 Maturing April 1. 1951 Interest payable April 1 and October 1 at New York and London. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $3,000,000 Outstanding $3,000,000 Provisions of The company agrees that the above bonds shall neither be extended nor renewed. No further issue: bonds may be issued, under the terms of the Refunding Mortgage 4s of 1955, a sufficient num- ber of which have been reserved to retire the above issues. Security: The above issues, to the amount of $15,000,000, are secured by a mortgage dated August 10, 1874. This mortgage was confirmed to the amount of $13,442,000 by an instrument of "Fur- ther Assurance," dated January 16, 1896. They are secured bj' a direct first mortgage on 705.50 miles of the company's main line, extending from Chicago to Cairo, 111., a distance of 364.73 miles, and from Centralia Junction to East Dubuque, 111., a distance of 340.77 miles. They are also secured by a first mortgage on land, buildings, equipment, etc. Equity: These issues are prior in lien to the Illinois Central Collateral Trust 33/^s of 1950; also to the Refunding Mortgage 4s of 1955, as mentioned above. Trustee: United States Trust Company, New York. These issues are considered legal investments for savings banks in New England. * These bonds were originally issued as Sterling 5s, but were changed to Gold Sj^s. [315] ILLINOIS CENTRAL RAILROAD Refunding Mortgage 4s Dated November 1, 1908 Maturing November 1, 1955 Interest payable May 1 and November 1, at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and multiples. Coupon and registered bonds interchangeable. Authorized $120,000,000 Outstanding $32,740,000 Per mile . . 14,940 Provisions of Of the amount authorized, $32,740,000 are in the hands of the public as above, $59,026,000 are issue: reserved to retire prior liens, and $28,234,000 are reserved, under restrictions, for construction, improvements and maintenance, and for funding purposes. Security: The above bonds are secured by a direct mortgage on 2,191.49 miles of the company's road, and on buildings, lands and yards, terminals in Chicago, equipment, and future acquisitions. They are secured by a, first mortgage on 179.53 miles, including the 176.93 miles from India- napolis, Ind., to Effingham, 111., and the Bloomington Branch. They are secured by a second mortgage on 879.36 miles which are covered by the following first mortgages: Springfield Division 31^2? of 1951; St. Louis Division & Terminal 31 ^s of 1951; Purchase Lines 3}^s of 1952; Cairo Bridge 4s of 1950; and the Chicago, Havana & Western 5s of 1952 and Rantoul 5s of 1952, both of which are deposited under the Illinois Central Collateral Trust 4s of 1952. They are secured by a tJiird mortgage on 1,101.61 miles which are covered by the following first mortgages: Illinois Central 3s, 33^s and 4s of 1950 and 1951; Belleville & Carondelet 6s of 1923; Carbondale & Shawneetown 4s of 1932; Kankakee & Southwestern 5s of 1921; and the Chicago, Madison & Northern 5s of 1935 which are deposited under the Collateral Trust 4s of 1952. They are secured by a fourth mortgage on 30.99 miles covered by the first mortgage of the St. Louis Southern 4s of 1931. The company covenants in this indenture that it will not extend or renew any of the above prior liens with the exception of the Chicago, Madison & Northern 5s of 1935, the Chicago, Havana & Western 5s of 1952 and the Rantoul 5s of 1952, which may be extended or renewed so as to mature not later than April 2, 1952; and also agrees not to issue or reissue any bonds of the above prior liens, except the Purchase Lines First Sj^s of 1952, and the St. Louis Division & Terminal First 3s and SJ/^s of 1951, which may be issued for the purposes for which they are reserved. Redemption: These bonds are redeemable as a whole, but not in part, at lOTj/^ and interest, on November 1, 1918, or any interest day thereafter, upon thirteen weeks' notice. Trustee: Guaranty Trust Company, New York. These bonds sold in 1908 on a 3.97 to 4.02 basis 1909 3.95 4.05 1910 4.02 4.20 1911 4.10 4.20 1912 4.15 4.35 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. [316] ILLINOIS CENTRAL RAILROAD Louisville, New Orleans & Texas Railway CoUateral Trust 4s Dated September 1, 1892 Maturing November 1, 1953 Interest payable May 1 and November 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000 and $500, registerable as to principal or fully registerable. Kegistered bonds of $1,000 and $500. Authorized $25,000,000 Outstanding $25,000,000 Per mile . . 31,330 Security: These bonds are secured by deposit with the trustee of (1) $16,832,000 (the entire issue out- standing) Louisville, New Orleans & Texas Railway 4s of 1934, which are secured by a first mortgage on 798 miles of road; (2) $9,104,000 (the entire issue outstanding) Louisville, New Orleans & Texas Railway 5s of 1934, which are secured by a second mortgage on the same mileage; (3) $6,553,277 Louisville, New Orleans & Texas Land Grant 6s of 1934, which are secured by a first mortgage on lands in Mississippi not required in the operation of the road. In its indenture the Illinois Central Railroad Company agrees to deposit with the trustee of this issue any additional bonds of the Louisville, New Orleans & Texas Railway which shall be acquired. It further agrees that if the land, which secures the Land Grant Bonds deposited as collateral under this issue, is sold, the latter may be redeemed and cancelled by the pro- ceeds of such sales, and the proceeds may be employed by the Illinois Central Railroad Company for additions and betterments to raUroad property mortgaged to secure the above Collateral Trust 4s. Trustee: United States Trust Company, New York. The Louisville, New Orleans & Texas Railway was chartered under the laws of the State of Illinois August 12, 1884, as the result of a consolidation of the following companies, — the New Orleans & Mississippi Valley Railroad, the New Orleans, Baton Rouge, Vicksburgh & Memphis Railroad, the Memphis & Vicksburgh Railroad, and the Tennessee Southern Railroad. In November, 1884, the main line of the road was opened for traffic. In 1892 the Illinois Central Railroad Com- pany purchased control of the company for $5,000,000 cash and $20,000,000 4% bonds secured by pledge of the purchased securities. That same year the road was merged into the Yazoo & Missis- sippi Valley Railroad under the name of the latter. These bonds sold in 1902 on a 3.65 to 3.88 basis 1903 3.70 3.95 1904 3.74 3.90 1905 3.70 3.85 1906 3.70 3.95 1907 3.85 4.20 1908 3.90 4.05 1909 3.90 4.05 1910 3.95 4.15 1911 4.05 4.25 1912 4.00 4.25 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [317] ILLINOIS CENTRAL RAILROAD Louisville Division and Terminal First Mortgage 3>2S Dated September 15, 1897 Maturing July 1, 1953. Interest payable January 1 and July 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $500 and $1,000, registerable as to principal only, or fully registerable. Authorized $25,000,000 Outstanding $23,888,000 Per mile . . 39,950 Provisions of Of the amount authorized, $23,888,000 are outstanding as above, and the balance, $1,112,000, issue: have been reserved to acquire the Cecilia Branch, free from encumbrances. Security : These bonds are secured by a joint indenture and purchase money mortgage executed by the Chicago, St. Louis & New Orleans Railroad and the Illinois Central Railroad, and also by a mortgage dated June 28, 1898. They are secured by a first mortgage on 598.05 miles of road, including the line from Memphis, Tenn., to Hodgenville, Ky., 364 miles. They are further secured by a first mortgage on the elevated railroad in Louisville, Ky., and the terminal prop- erties in Louisville, Owensboro, Paducah, Evansville, Ind., and Memphis. Included in the mortgage are the equipment of the road in question, and future acquisitions. Trustee: United States Trust Company, New York. The above mileage covered by the first mortgage of this issue is that of the Chicago, St. Louis & New Orleans Railroad, which is operated by the Illinois Central Railroad Company under a four- hundred-year lease at a rental equal to the interest on the former's bonds, taxes, and a 4% guarantee on its capital stock. The bonds sold in 1902 on a 3.45 to 3.55 basis 1903 3.55 3.88 1904 3.63 3.80 1905 3.67 3.75 1906 3.75 3.89 1907 4.00 4.05 1908 3.95 4.25 1909 3.88 4.10 1910 4.05 4.15 1911 4.15 4.27 1912 4.15 4.30 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachusetts, Connecticut and Rhode Island. [318] ILLINOIS CENTRAL RAILROAD Collateral Trust 4s Dated March 31, 1888 Maturing April 1, 1952 Interest payable April 1 and October 1 at the Company's oflBce, 115 Broadway, New York. Coupon bonds of $500 and $1,000 or their equivalent in pounds sterling. Registerable as to principal or fully registerable. Registered bonds of $1,000 or equivalent in pounds sterling. Authorized $15,000,000 Outstanding $15,000,000 Per mile . . 17,380 Security: The above bonds are secured by a first collateral lien on seven issues of first mortgage bonds, aggregating $16,350,000, and are in effect a first mortgage thereby on 863.03 miles of road. The collateral behind this issue is as follows : $1,750,000 Canton, Aberdeen & Nashville First 5s. 2,800,000 Yazoo & ^Mississippi Valley First 5s 2,500,000 Chicago, Havana & Western Fu-st 5s. 1,000,000 Rantoul Railroad First 5s. 830,000 Cedar Rapids & Chicago First 5s. 3,100,000 Cherokee & Dakota First 5s. 4,370,000 Chicago, Madison & Northern First 5s. All the above bonds thus deposited with the trustee are prior in hen to the Illinois Central Refunding 4s of 1955, a sufficient number of which have been reserved to retire these at maturity. They are closed mortgages. Trustee: United States Trust Company, New York. These bonds sold in 1902 on a 3.70 to 3.80 basis 1903 3.80 4.00 1904 3.73 3.88 1905 3.63 3.77 1906 3.65 3.95 1907 3.88 4.15 1908 3.90 4.15 1909 3.88 4.05 1910 3.96 4.12 1911 4.05 4.10 1912 4.00 4.12 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 319 ILLINOIS CENTRAL RAILROAD Purchase Lines First Mortgage 33^s Dated June 30, 1904 Maturing July 1, 1952 Interest payable January 1 and July 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and multiples. Authorized $20,000,000 Outstanding $12,000,000 Per mile . . 16,040 Provisions of Of the amount authorized, $12,000,000 are in the hands of the public and $2,662,000 have issue: been exchanged for Illinois Central 4s of 1955 and cancelled. The balance, $5,388,000, has been reserved to retire underlying liens. Security: The above bonds are secured by a direct mortgage on 748.36 miles of road, including its equip- ment, and all future acquisitions. They are secured by a first mortgage on 385.8 miles of road, including the line from Pekin to Evansville, 111., and branches. They are secured by a second mortgage on 362.56 miles, co\ered by the first mortgages of the Kankakee and Southwestern First 5s of 1921 and the Chicago, Madison & Northern First 5s of 1935, the latter being all deposited under the Illinois Central Collateral Trust 4s of 1952. Equity: These bonds are prior in lien to the Illinois Central Refunding 4s of 1955, a sufficient number of which have been reserved to retire these bonds. Trustee: United States Trust Company, New York, and J. E. Williamson, Esq. These bonds were sold in 1909 on a 4.10 basis 1910 4.15 to 4.25 1911 4.10 4 20 1912 4.20 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. ILLINOIS CENTRAL RAILROAD Springfield Division First Mortgage 33^s Dated January 1, 1898 Maturing January 1, 1951 Interest payable January 1 and July 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $2,000,000 Outstanding $2,000,000 Per mile . . 17,940 Security: The above bonds are secured by a first mortgage on all the property and franchises of the Chicago & Springfield Railroad, including the road from Oilman, 111., to Springfield, 111.47 miles, and all branches, lands, buildings, equipment and income. [ 320 ] These bonds are secured by a joint indenture by the Illinois Central Railroad and the Chicago & Springfield Railroad Companies. Equity: The above bonds are prior in lien to the Illinois Central Refunding 4s of 1955, a sufficient num- ber of which have been reserved to provide for the retirement of these bonds. Trustee: United States Trust Company, New York. The Chicago & Springfield Railroad Company conveyed its property by deed dated October 15, 1902, to the Illinois Central Railroad Company. These bonds sold in 1909 on a 4.15 basis (bid) 1910 4.87 1911 4.35 (bid) 1912 4.40 These bonds are considered a legal investment for savings banks in New England. ILLINOIS CENTRAL RAILROAD St. Louis Division & Terminal First Mortgage 3s and 3>2S Dated July 1, 1897 Maturing July 1, 1951 Interest payable January 1 and July 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Authorized (3s) $5,000,000 Outstanding (3s) $4,998,000 (3i^s) 10,000,000 (3Ks) 8,377,000 Per mile .... 56,000 Provisions of Of the amount authorized, $13,375,000 are outstanding as above, $1,547,000 have been re- issue: served to retire prior liens, and the balance, $78,000, has been exchanged for Illinois Central Refunding 4s of 1955, and cancelled. Security: The above bonds are secured by a direct mortgage on the 239.04 miles of road, the property of the St. Louis, Alton & Terre Haute Raih-oad, together with all its branches, lands, buildings, equipment, and franchises now owTied or hereafter acquired. They are secured by a first mort- gage on 175 miles, including the line from East St. Louis to Eldorado, 111., 121 miles. They are further secured by a second mortgage on 33.55 miles of road covered by the first liens of the Belleville & Carondelet First 6s of 1923, and the Carbondale & Shawneetown First 4s of 1932, and a third mortgage on 30.99 miles covered by St. Louis Southern First 4s of 1931 and Second Income 5s of 1931. Equity : These bonds are prior in lien to the Illinois Central Refunding 4s, a sufficient number of which have been reserved to provide for the retirement of this issue. Trustee: United States Trust Company, New York. The St. Louis, Alton & Terre Haute Railroad Company was chartered as the Terre Haute & Alton Railroad Company in Illinois in January, 1851, to build a railroad from Terre Haute to [321 ] Alton, m. Work was begun in 1852 and completed March 1, 1856. In 1860 the company became financially embarrassed and was sold under foreclosure to a new company formed under an act of the Illinois Legislature in February, 1861. The new company took charge in June, 1862. On June 1, 1867, the company's lines were leased for 999 years to the Indianapolis & St. Louis Railroad which became insolvent in 1878, and a new lease was granted to the reorganized company, known as the Indianapolis & St. Louis Hallway Company. By a deed dated February 14, 1904, the St. Louis, Alton & Terre Haute Railroad Company conveyed its property to the Illiuois Central RaUroad Company. The 3s of 1951 sold m 1902 on a 3.55 basis 1903 3.63 to 3.80 1904 3.63 3.97 1905 3.60 3.73 1906 3.80 3.95 1907 4.05 1908 4.02 4.20 1909 4.10 (bid) 1910 4.27 1911 4.27 1912 4.30 he 3Hs of 1951 .sold in 1902 on a 3.45 to 3.55 1903 3.05 3.88 1904 3.72 3.82 1905 3.67 3.85 1906 3.80 1907 3.95 4.40 1908 3.95 4.60 1909 3.95 4.08 1910 4.05 1911 4.15 4.22 1912 4.15 4.35 These bonds are considered a legal investment for savings banks in Maine, Massachusetts, New Hamp- shire, Vermont and Rhode Island. KANKAKEE & SOUTHWESTERN RAILROAD First Mortgage Currency 5s Dated August 1, 1881 Maturing August 1, 1921 Interest payable February 1 and August 1 at the Company's office, 115 Broadway, New York. Registered bonds of $1,000. Authorized $1,000,000 Outstanding $968,000 Per mile . . 7,390 Provisions of Under the terms of the mortgage of the Illinois Central Refunding 4s of 1955 no more of these issue: bonds may be issued. A sufficient number of these Refunding 4s have been reserved to provide lor the retirement of this issue. [ 322 ] Security: These bonds are secured by a first mortgage on the road of the Kankakee & Southwestern Raiboad Company, 131.26 miles, together witli all branches and extensions hereafter con- structed, also lands, buildings, equipment now owned or hereafter acquired, and franchises and incomes. Equity: These bonds are prior in lien to the Purchase Lines 3^^s of 1952, as well as the Refunding 4s of 1955 mentioned above. Trustees: The trustees of this issue at present named are L. V. F. Randolph, Esq., and Stuyvesant Fish, Esq. The Kankakee & Southwestern Railroad Company conveyed its property to the Illinois Central Railroad Company by a deed dated October 15, 1902. These bonds were quoted in 1909 on a 4.10 basis (bid) 1910 4.22 1911 4.37 December, 1912 4.70 These bonds are considered a legal investment for savings banks in New England. ILLINOIS CENTRAL RAILROAD Cairo Bridge Mortgage 4s Dated June 1, 1892 Maturing December 1, 1950 Interest payable June 1 and December 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $3,000,000 Outstanding $3,000 000 Security: These bonds are secured by a first mortgage on $3 000,000 Chicago, St. Louis & New Orleans- Cairo Bridge First 5s (the entire issue), which makes them, in effect, a first mortgage on the bridge and its leases and approaches. The bridge is leased until July 1, 2282, at an annual rental of $180 000 and taxes. Equity: The above bonds are prior in lien to the Illinois Central Refunding 4s of 1955, a sufficient num- ber of which have been reserved to provide for the retirement of this issue, and the company agrees that it will not suffer the same to be extended or renewed. Trustee: United States Trust Company, New York. These bonds sold in 1903 on a 3.70 basis 1906 3.77 1907 3.87 1909 4.00 1910 4.25 (bid) 1911 4.12 to 4.20 1912 4 27 These bonds are considered a legal investment for savings banks in New Hampshire, Vermont, Massachu- setts and Rhode Island. [ 323 ] ILLINOIS CENTRAL RAILROAD Sterling Trust Mortgage 3)28 Dated July 1, 1886 Maturing July 1, 1950 Interest payable January 1 and July 1 at the Company's office, 115 Broadway, New York, and Baring Brothers, London. Coupon bonds of $1,000 and £200. Registered bonds of $1,000 and £200. Authorized $9,000,000 Outstanding $5,266,000 Provisions of Under the terms of the mortgage of the IlUnois Central Refunding 4s of 1955, no further bonds issue : may be issued, and a sufficient number of the same have been reserved to retire those already issued at maturity. Security : These bonds are secured by a first collateral lien by deposit with the trustee of an equal amount ($5,266,000) of Chicago, St. Louis & New Orleans Consolidated 5s of 1951. They are further secured by a direct second mortgage on 705.5 miles of road, covered by the first lien of the com- pany's first mortgage, dated August 10, 1874. The company covenants "that no mortgage shall hereafter be made upon the Illinois Central Railroad and the Chicago, St. Louis & New Orleans Railroad, to secure the payment of any other indebtedness, imtil the bonds of this series shall be secured by a first mortgage lien upon each, to be duly authorized by the holders of a majority of the capital stock of the companies having priority to any other mortgage that may hereafter be executed." Equity: These bonds are prior in lien to the Illinois Central Refunding 4s of 1955, a sufficient number of which have been reserved to provide for the retirement of this issue, and the company agrees that it will not suffer any of the said bonds to be extended or renewed. Trustee: United States Trust Company, New York. These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. ILLINOIS CENTRAL RAILROAD Western Line First Mortgage 4s Dated February 1, 1895 Maturing August 1, 1951 Interest payable February 1 and August 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $10,000,000 Outstanding $5,425,000 Per mile . . 24,880 Provisions of Of the amount authorized, $5,425,000 are outstanding, as above, and the balance, $4,575,000, issue: has been reserved to acquire, free from incumbrances, the 184.26 miles of road covered by $2,000,000 Iowa Falls & Sioux City First 7s of 1917. [ 324 ] Security: The above bonds are secured by a first mortgage on the company's road extending from Du- buque to Iowa Falls, la., 142 miles, and from Cedar Falls, la., to the Minnesota State Line, 76 miles, together with the roadbed, depots, and other buildings now owned or hereafter acquired or provided for the use of the railroad. Trustee: United States Trust Company, New York. These bonds sold in 1902 on a 3.37 to 3.56 basis 1903 3.52 3.85 1904 3.67 3.75 1905 3.60 1906 3.65 3.90 1907 3.90 4.10 1908 3.95 1909 3.95 4.20 1910 4.10 4.25 1911 4.17 4.23 1912 4.20 4.40 These bonds are considered a legal investment for savangs banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. ILLINOIS CENTRAL RAILROAD Omaha Division First Mortgage 3s Dated July 20, 1900 Maturing August 1, 1951 Interest payable February 1 and August 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $5,000,000 Outstanding $5,000,000 Per mile . . 37,570 Security: These bonds were issued by the Illinois Central Railroad Company, and are secured by a first mortgage executed by the Dubuque & Sioux City Railroad Company on its line extending from Tara to Council Bluflfs, 133.38 miles, including all the depots, and other buildings and structures and improvements purchased or provided for, or which may be hereafter purchased or provided between these points, also all franchises. Trustee : United States Trust Company, New York. The Dubuque & Sioux City Raihoad Company was chartered November 24, 1856, as the Du- buque & Pacific Raihoad Company. Its road, 80 miles completed, was sold under foreclosure August 21, 1860, and the present company was organized at that time. It was opened to its present terminus in 1866. A controlling interest in this road was acquired by the Illinois Central Railroad Company in October, 1888, and it was subsequently consolidated with the Cedar Rapids & Chicago Railroad, the Iowa Falls & Sioux City Railroad, and the Cherokee & Dakota Railroad Companies, and the capital stock increased to $8,000,000. The Illinois Central Railroad Company owns all but $33,300 of its capital stock outstanding. [325 ] These bonds sold in 1904 on a 3.60 to 3.70 basis 1905 3.63 1906 4.05 1909 4.05 1910 4.13 1911 4.25 1912 4.30 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. ILLINOIS CENTRAL RAILROAD Litchfield Division First Mortgage 3s Dated October 1, 1900 Maturing January 1, 1951 Interest payable January 1 and July 1 at the Company's office, 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and multiples. Authorized $4,000,000 Outstanding $3,235,000 Per mile . . 33,000 Security : Equity: Trustee: These bonds are secured by a first mortgage on the railway formerly belonging to the St. Louis, Peoria & Northern Railway Company, extending from East St. Louis to Springfield, 111., and all lands, buildings, properties acquired, provided or constructed, or hereafter acquired, to- gether with trackage rights and the benefits from contracts which the railway had with other corporations, and equipment now owned or hereafter acquired. The above bonds are prior in lien to the Illinois Central First Lien Equipment 4s of 1923. Farmers' Loan & Trust Company. These bonds sold in 1909 on a 4.10 basis (bid) 1910 4.37 (bid) 1911 4.30 1912 4.30 to 4.45 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. [ 326 ] BELLEVILLE & CARONDELET RAILROAD First Mortgage Currency 6s Dated June 1, 1883 Maturing June 1, 1923 Interest payable June 1 and December 1 at 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $500,000 Outstanding $470,000 ^er mile . . 27,170 Security: The above bonds are secured by a first mortgage on the company's road, extending from Belleville to Carondelet, 111., 17.3 miles, including all lands, buildings, equipment, franchises, etc. now owned or hereafter acquired. These bonds were ASSUMED by the St. Louis, Alton & Terre Haute Railroad Company, which conveyed its property to the Illinois Central Railroad Company in 1904. Equity: These bonds are prior in lien to $13,375,000 IlUnois Central, St. Louis Division & Terminal 3s and 3j^s of 1951, and to the Illinois Central Refunding 4s of 1955, provision being made under both to provide for the retirement of this issue. Under the terms of the mortgage of the Illinois Central Refunding 4s of 1955, no further bonds may be issued than are outstanding as above. The Belleville & Carondelet Railroad was consolidated into the St. Louis, Alton & Terre Haute Railroad Company in 1897, and the latter conveyed its property to the Illinois Central Railroad Company in 1904. These bonds sold in 1904 on a 4.13 basis 1905 4.25 1909 4.00 1910 4.25 1911 4.27 (bid) December, 1912 5.00 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. CARBONDALE & SHAWNEETOWN RAILROAD First Mortgage 4s Dated March 1, 1887 Maturmg March 1, 1932 Interest payable March 1 and September 1 at 1 15 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $250,000 Outstanding $241,000 Per mile . . 14,830 Provisions of Under the terms of the mortgage of the Illinois Central Refunding 4s of 1955 no further bonds issue: than those at present outstanding may be issued. [ 327 ] Security: The above bonds are secured by a first mortgage on the company's road from Carbondale to Marion, 111., 16.25 miles, together with the equipment of the line and future acquisitions. These bonds were ASSUMED by the St. Louis, Alton & Terre Haute Railroad Company, which conveyed its property to the Illinois Central in 1904. Equity: These bonds are prior in hen to $13,375,000 Illinois Central, St. Louis Division & Terminal 3s and 33^s of 1951, and also the Ilhnois Central Refunding 4s of 1955, provision being made under both to provide for the retirement of this issue. Trustee: Mercantile Trust Company, New York. These bonds sold in 1907 on a 4.20 basis 1908 4.00 to 4.20 basis 1909 4.13 4.25 1910 4.05 4.35 1911 4.37 (bid) 1912 4.45 4.62 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. ST. LOUIS SOUTHERN RAILROAD First Mortgage 4s Dated September 1, 1886 Maturing September 1, 1931 Interest payable March 1 and September 1 at 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $550,000 Outstanding $538,000 Per mile . . 17,350 Provisions of Under the terms of the mortgage of the Illinois Central Refunding 4s of 1955, no further bonds issue: than those at present outstanding may be issued. Security : Equity: Trustee: The above bonds are secured by a first mortgage on the company's road from Pinkneyville to Murphysboro, 111., 30.99 miles, together with equipment and all future acquisitions. These bonds were ASSUMED by the St. Louis, Alton & Terre Haute Railroad Company, which conveyed its property to the Illinois Central in 1904. These bonds are prior in lieu to $13,375,000 Illinois Central St. Louis Division & Terminal 3s and 33-28 of 1951, and also the Ilhnois Central Refunding 4s of 1955, provision being made under both to provide for the retirement of this issue. Mercantile Trust Company, New York. The St. Louis Southern Railroad Company was consolidated into the St. Louis, Alton & Terre Haute Railroad Company in 1897, and the latter conveyed its property to the Illinois Central Rail- road Company in 1904. [ 328 1 These bonds sold in 1902 on a 3.75 to 3.95 basis 1904 3.82 3.8 1907 4.20 1908 4.15 1909 4.20 (bid) 1910 4.35 (bid) 1911 4.70 (bid) December, 1912 4.35 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. IOWA FALLS & SIOUX CITY RAILROAD First Mortgage Currency 7s Dated May 1, 1869 Maturing October 1, 1917 Interest payable April 1 and October 1 at 115 Broadway, New York. Coupon bonds of $500 and $1,000. Authorized $3,000,000 Outstanding $2,800,000 Per mile . . 15,200 Security: The above bonds are secured by a first mortgage on the company's road from Iowa Falls to Sioux City, la., 184.26 miles, together with lands and equipment, etc. These bonds have been ASSUMED by the Dubuque & Sioux City Railroad Company. The Iowa Falls & Sioux City Railroad Company was organized October 1, 1867, and the road was completed in 1870, being thereafter operated bj' the Illinois Central Railroad Company under a lease which expired October 1, 1887. The company was consolidated in 1889 mto the Dubuque & Sioux City Railroad Company, all the capital stock of which with the exception of $33,300 is owned by the Illinois Central Railroad Company. These bonds were quoted in 1909 on a 4.70 basis (bid) 1910 4.63 1911 4.63 December, 1912 5.37 These bonds are considered a legal investment for savings banks in Maine. [ 329 ] CHICAGO, ST. LOUIS & NEW ORLEANS RAILROAD Consolidated Mortgage 33^^s and 5s Dated March 15, 1881 Interest payable June 15 and December 15 Maturing June 15, 1951 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $18,000,000 Outstanding (5s) $16,635,000 (3l^s) 1,359,000 Per mile .... 31,790 Provisions of Of the amount outstanding, $5,266,000 5s have been pledged to secure the Illinois Central issue: Sterling 3}^^s of 1950. In addition, $6,000 have been reserved for overdue bonds. Security: These bonds are secured by a first mortgage on the company's road, on 566.08 miles, includ- ing the line from East Cairo, Ky., to New Orleans, La., together with the equipment of the line and all future acquisitions. The Consolidated 5s are GUARANTEED as to principal only, and the S^s are guaranteed as to both principal and interest by endorsement. The Consolidated 3Hs of 1951 sold in 1902 on a 3.30 basis 1904 3.58 to 4.12 basis 1907 4.05 1909 3.98 1910 4.00 1911 4.30 (bid) December, 1912 4.60 (bid) The Consolidated 5s of 1951 sold in 1902 on a 3.63 to 3.78 basis 1903 3.85 4.15 1905 3.85 3.95 1906 3.88 4.02 1907 4.10 4.65 1908 4.15 4.35 1909 4.00 4.13 1910 4.05 4.25 1911 4.13 4.30 1912 4.15 4.30 The Consolidated 5s are considered a legal investment for savings banks in Connecticut and Rhode Island. The Consolidated 33^s are considered a legal investment for savings banks in New Hampshire, Connec- ticut and Rhode Island. 330 CHICAGO, ST. LOUIS & NEW ORLEANS RAILROAD Memphis Division First Mortgage 4s Dated April 3, 1889 Maturing December 1, 1951 Interest payable June 1 and December 1 at 115 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $3,500,000 Security : Trustee: Outstanding $3,500,000 Per mile . . 35,000 The above bonds are secured by a first mortgage on the company's road from Memphis, Tenn., to Granada, Miss., 100 miles, together with equipment and future acquisitions. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Illinois Central Railroad Company by endorsement. United States Trust Company, New York. These bonds sold in 1902 on a 3.70 to 3.75 basis 1903 3.72 3.90 1904 3.60 3.82 1905 3.53 1906 3.95 1907 3.97 4.05 1908 4.00 1909 4.15 (bid) 1910 4.13 1911 4.25 (bid) 1912 4.40 These bonds are considered a legal investment for savings banks in New Hampshire. CHICAGO, MEMPHIS & GULF RAILROAD First Mortgage Gold 5 s Dated January 1, 1910 Maturing January 1, 1940 Interest payable January 1 and July 1 at Bankers' Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000 and multiples. Coupon and registered bonds are interchangeable. Authorized $10,000,000 Outstanding $735,000 Provisions of Of the total amount authorized $735,000 were outstanding as above, $1,750,000 have been issue: reserved for terminals, and $7,515,000 have been reserved for extensions, etc. at 85% of the cost, but not to exceed $20,000 per mile. [331 ] Security: The above bonds are a direct obligation of the Chicago, Mempliis & Gulf Railroad Com- pany, and are secured by a first mortgage upon its entire property, which includes a line from Dyersburg, Tenn., to Hickman, Ky., 52 miles. These bonds have been ASSUMED by the Illinois Central Railroad Company. Redemption: The above bonds are redeemable as a whole at 105 and interest on any interest date, upon three months' notice. Trustee: Bankers' Trust Company, New York. The Chicago, Memphis & Gulf Railroad was chartered in December, 1904, as the Dyersburg Northern Railroad Company. Its name was changed to the above in November, 1909, and in 1913 its pro])erty was purchased by the Illinois Central Railroad Company, the latter assuming its funded obligations. These bonds are considered a legal investment for savings banks in Maine. ILLINOIS CENTRAL RAILROAD Secured Gold 4)^% Notes Dated July 1, 1912 Maturing July 1, 1914 Interest payable January 1 and July 1 at 115 Broadway, New York. Coupon notes of $1,000, $5,000 and $10,000. Authorized $15,000,000 Outstanding $15,000,000 The proceeds of this issue were used to acquire a like amount of Central of Georgia Railway First, Second, and Third Preference Income 5s of 1945. Security: These notes are a direct obUgation of the company and are secured by approximately $14,000,000 of the above-mentioned bonds purchased, together with about $5,000,000, par value, of Central of Georgia Railway capital stock. Redemption: The above notes are pedeemable, as a whole, on July 1, 1913, or January 1, 1914, upon three months' notice at lOOj^ and interest. Trustee: Farmers' Loan and Trust Company, New York. 332 ] ILLINOIS CENTRAL RAILROAD Equipment Trust 43/2% Certificates Dated February 1, 1913 Maturing $400,000 each February 1 and August 1 to February 1, 1923, inclusive. Interest payable February 1 and August 1 at New York. Notes of $1,000, registerable as to principal. Authorized $8,000,000 Outstanding $8,000,000 Security: The above certificates are a direct obligation of the Illinois Central Railroad Company and were issued under the terms of a trust agreement covering equipment costing about 15% in excess of the authorized amount of this issue. The title of this equipment will remain in the name of the trustee until all these obligations have been paid. Trustee: The Commercial Trust Co., Philadelphia, Pa. [ 333 ] LAKE SHORE & MICHIGAN SOUTHERN RAILWAY COMPANY LAKE SHORE & MICHIGAN SOUTHERN RAILWAY COMPANY HISTORY The Lake Shore & Michigan Southern Railway Company was formed by a consolidation, in 1869, of the ^Michigan Southern & Northern Indiana Railway, operating a line from Chicago to Toledo with branches: the Cleveland & Toledo Railroad, chartered September 1, 1853, and operating a line from Toledo to Cleveland; the Cleveland, Painesville & Ashtabula Railroad, chartered in 1854, and operating a line from Cleveland to Erie, Pennsylvania, and the Buffalo & Erie Railroad Companies. The last named was chartered May 15, 1867, its lines running from Erie to Buffalo, New York. The length of the several lines acquired by the consolidation of 1869, including the Detroit, Monroe & Toledo Railroad, 62.36 miles, was 927.23 miles. The share capital of the consolidated com- pany was $34,938,000, and its funded debt $22,283,000. As a result of further consolidations and extensions, the Lake Shore & Michigan Southern Railway Company has developed into a system of 1,775 miles, with a share capital of $50,000,000, and a funded debt of nearly $170,000,000. Not only is it the most important subsidiary road of the New York Central System, but it is, likewise, the principal holding company of the New York Cen- tral System in other lines. Among the more valuable ecjuities which the Lake Shore & Michigan Southern Railway owns in the stocks of other companies, are the entire capital stocks of the Lake Erie, Alliance & Wheeling Railroad Company, purchased in January, 1903, together with the entire stock of the Lake Erie, Alliance & Wheeling Coal Company, and 51% of the Jefferson Coal Company; the Toledo & Ohio Central Railway Companj-, and the Cleveland Short Line Railway Company. The company also owns a controlling interest in the New York, Chicago & St. Louis Railroad, holding at present $2,503,000 first preferred, $6,275,000 second preferred and $6,240,000 common shares of the above company. In 1903, 1909, 1910 and 1911 the Lake Shore subscribed to stock of the Pittsburgh & Lake Erie Railroad Company, and on December 31, 1911, it o^\^^ed $12,600,200 of the outstanding $25,200,000 of that company's capital stock. Control ha^ been gained of a majority of the stocks of the Lake Erie & Western Railroad Company ($5,930,000 of preferred, $5,940,000 of the common stock being held), the Chicago, Indiana & Southern Railroad Company, and the Cleveland, Cincin- nati, Chicago & St. Louis Railway Comj^any, control in the last named having been purchased in 1905 and 1906. The Lake Shore owns one half of the capital stock of the Detroit, Toledo & IVIilwaukee Railroad Company. Jointly with the Chesapeake & Ohio Railway, it controls the stock of the Kanawha & Michigan Railway Company, holding $4,027,100 of its common stock; and owns $12,600,200 of the $25,200,000 outstanding stock of the Pittsburgh & Lake Erie Railroad Company. On December 31, 1911, the company also owned $6,065,000 first preferred, $14,265,000 second preferred, and $10,002,500 common stock of the Reading Company. These equities are of considerable value, in many cases the Lake Shore's holdings being consider- ably in excess of the amount at which they are carried on the books of the company. This is espe- cially true of the stocks of the Pittsburgh & Lake Erie Railroad and the Reading Company. The Lake Shore & Michigan Southern Railway leases 425 miles of road from the following com- panies: Detroit, Hillsdale & Southwestern Railroad, Fort Wayne & Jackson Railroad, Kalamazoo, Allegan & Grand Rapids Railroad, Jamestown, Fraidvlin & Clearfield Railroad, Cleveland Short [ 337 ] Line Railway, and Mahoning Coal Railroad, and operates 289 miles of proprietary railroads con- trolled through stock ownership. In 1898 the New York Central & Hudson River Railroad Company gained control of the Lake Shore & INIichigan Southern Railway Company by exchanging the larger part of the latter's stock for New York Central Collateral Trust ^14,% Gold Bonds at the rate of $200 per share for the capital stock. On December 31, 1911, the New York Central owned $45,289,200 of the $50,000,000 capital stock of the Lake Shore. The latter's road is really a part of the New York Central System, but is operated as an independent organization. Paying, as it does, 18% annually on its common stock, the New York Central's equity has proved very valuable. The New York Central Lines, including the Lake Shore & Michigan Southern Railway, the New York Central & Hudson River Railroad, the Michigan Central Raiboad, the Cleveland, Cin- cinnati, Cliicago & St. Louis Railway, and the Chicago, Indiana & Southern Railroad, have joiatly and severally guaranteed the principal and interest on three issues of 5% Equipment Trust Certifi- cates dated in 1907, in 1910, in 1912, and in 1913. The Equipment Trust Certificates of 1907 amounted to $30,000,000. The Lake Shore's share of equipment leased under the terms of the 1907 agreement cost approximately $7,500,000. The cer- tificates issued by the Guaranty Trust Company, representing 90% of the face value of this equip- ment, amounted to $6,708,392, of which $1,788,904 had been paid out of income and appUed for the redemption of these certificates up to December 31, 1911, leaving a balance of $4,919,488 outstand- ing for which this company is liable. The Equipment Trust Certificates of 1910 amounted to $30,000,000. The Lake Shore's share of equipment leased under the terms of the 1910 agreement was $15,301,184, and its pro rata liability for certificates, representing 90% of the cost, was $13,771,065. Of this amount $918,071 had been paid for redemption up to December 31, 1911, leaving a balance of $12,852,994 outstanding. The Equipment Trust Certificates of 1912 amounted to $15,000,000, issued at 43/^%. The equip- ment purchased by the proceeds and assigned to the Lake Shore was approximately $3,305,000, and the pro rata amount of certificates for which the Company is responsible is approximately $2,975,000. PROPERTY The mileage of the Lake Shore & Michigan Southern Railway Company, on December 31, 1911, was as follows: Miles owned in fee 871.00 Miles of proprietary lines 289.32 Miles operated under lease 424.67 Miles operated under trackage arrangements 190.44 Total miles operated 1,775.43 There was an increase in mileage operated of 112.55 miles during the fiscal year of 1911, due to the acquisition of trackage rights over the Lake Erie & Pittsburgh Railway, the Pennsylvania, and the Baltimore & Ohio Railway Companies' tracks, and by the use of the Cleveland Short Line Railway. The Lake Shore System connects Buffalo, Cleveland, Toledo and Chicago. Its main line follows the south shore of Lake Erie to Toledo, and cuts directly across northern Ohio and Indiana into Chicago. The company operates important branches into Michigan, connecting the main line with Detroit, Lansing, Grand Rapids and Kalamazoo. It also controls mileage, through trackage rights, in central Ohio and Pennsylvania, including an important line, directly owned, into the Sharon ore districts. The company's mileage is chiefly in the States of Ohio and Indiana. Their population in 1890 was 5,865,000 and in 1910, 7,468,000. [ 338 ] CAPITALIZATION On December 31, 1911, the capitalization of the Lake Shore & Michigan Southern Railway Company was approximately as follows: Capital stock Common $49,466,500 Guaranteed 533,500 Total capital stock $50,000,000 Funded debt (including Equipment Obligations) 168,172,482 Nominal capital $218,172,482 Rentals capitalized @ 5% 50,620,000 Gross capitalization $268,792,482 Securities owned 12,751,221 Net capitalization $256,041,261 Net capital per mile operated $144,249 Average miles operated 1,775.43 Net income to net capital 10.7% Fixed charges to net income 43.5% Margin of safety 56.5% In the above estimate, the $533,500 guaranteed stock refers to the preferred stock of the former Michigan Southern & Northern Indiana Railway Company, whose dividends are guaranteed up to at least 10% and are to share equally in dividends paid on the Lake Shore & IVIichigan Southern stock above that amount. The amount paid for rentals in 1911 was $2,531,081, being the organization expenses, dividends and interest on the outstanding bonds of the leased companies. The par value of the stocks and bonds of other companies owned by the Lake Shore was $166,239,661, of which $155,771,661 represented the holdings of stock of other companies and $10,462,000 the funded indebtedness of the same. These were carried on the books of the company at $120,444,953. Of this amount but $12,751,221 are carried as Capital Investments. The latter include unpledged securities of proprietary companies and have been deducted as above. The capital stock of the Lake Shore outstanding per mile of road owned in fee was $57,405 in 1911, as compared with the Michigan Central's figure of $69,382 and that of the New York, Chicago & St. Louis Railroad of $60,640. The funded debt of the three companies per mile of road owned was as follows: Lake Shore $192,620 Michigan Central 110,511 N. Y., C. & St. L 57,420 The net capitalization of these three " Central" properties per mile of road operated on December 31, 1911, together with the ratio of total net income to net capitalization, was approximately as follows : Net Net income capitalization to net capital Lake Shore $144,249 10.7% Michigan Central 57,866 10.1 N. Y., C. & St. L 109,900 5.8 [ 339 ] 1911 1910 1909 1908 1907 9.68% 8.77% 9.52% 12.40% 10.24% 3.62 3.09 4.09 5.05 3.13 56.48 59.64 58.12 53.76 54.98 2.92 2.77 2.83 3.23 3.02 26.13 24.65 24.02 24.08 26.78 1.17 1.08 1.42 1.48 1.85 It will be noted that fixed charges, which include taxes, rentals and interest on the company's funded debt, consumed but 43.5% of its total net income, leaving a margin of safety for these charges of 56.5%. A margin of safety of 25% was reported for the Michigan Central and 47% for the New York, Chicago & St. Louis. CHARACTER OF TRAFFIC The company's freight traflBc represents two-thirds of its entire business. Following is a classi- fication of its commodity tonnage for the years 1907 to 1911 inclusive: Products of Agriculture . Animals . . . Mines . . . Forests . . . Manufactures Miscellaneous 100.00%, 100.00% 100.00% 100.00% 100.00% The company's total tonnage in 1900 was 19,848,475, while in 1911 this figure had increased to 34,887,697, a gain of 76% for the period. The generally heavy volume of freight business has been well maintained during the five years ending 1911. The freight density, revenue tons per train, and freight earnings of the Lake Shore for the years 1907 to 1911 inclusive, were as follows: Year Freight Train Freight Average rate density load earnings per ton tons per mile 1907 3,777,147 618 $31,111,482 $.0053 1908 3,211,690 586 25,935,473 .0052 1909 3,715,969 624 29,735,277 .0052 1910 3,803,178 593 32,646,536 .0052 1911 3,508,010 634 31,101,335 .0053 Passenger traffic contributes nearly 25% of the gross earnings of the road. In 1907 the Lake Shore reported the largest passenger earnings in its history. With the exception of 1908, every year since 1907 has shown an increase, and in every year the company's passenger density — the number of passengers carried one mile per mile of road — has shown consistent gains. Year Passenger Number of Passenger Avenige rate density passengers earnings per passenger per train per mile 1907 317,504 65 $9,769,873 $.0197 1908 321,296 66 9,583,227 .0191 1909 368,450 65 10,154,220 .0182 1910 404,351 60 11,130,125 .0187 1911 407,881 63 11,350,096 .0189 [ 340 EARNINGS The Lake Shore's gross and net earnmgs for the years 1907 to 1911 inchisive were as follows: Year Average Gross Per Net Per Operating miles earnings mile earnings mile ratio operated 1907 . . . 1520 $44,953,475 $29,574 $15,409,128 $10,138 65.72% 1908 . . . 1511 39,964,858 26,449 13,252,847 8,772 66.84 1909 . . . 1663 45,110,997 27,126 17,087,336 10,276 62.12 1910 . . . 1663 49,420,210 29,717 14,499,278 8,720 70.66 1911 . , . 1775 48,360,997 27,245 17,282,419 9,738 64.26 The gross revenues of 1907 were by far the largest the company had ever reported. In 1908, as a result of the general business depression, a $5,000,000 decline in gross earnings was shown. In 1909, however, gross earnings had more than recovered from the low figures of the previous year. Operating expenses increased $2,800,000, of which $2,000,000 was due to increases of maintenance, especially equipment charges, owing to the large amount of equipment used to handle additional traffic. As a result, the company's operating ratio decreased from 66.84% in 1908 to 62.12% in 1909, the lowest it has reached in the last decade. The fiscal year of 1910 showed an increase of $4,500,000 in gross earnings over the previous high record of 1907. Operating expenses, however, increased $6,900,000. bringing the operating ratio up to over 70%, or 8.5% more than in 1909. The ratio of maintenance to gross earnings took care of 4.0% of this difference, increasing from 27.2% in 1909 to 31.2% in 1910. The ratio of conducting transportation to gross earnings increased from 34.9% in 1909 to 39.4% in 1910, or 4.5%. Although the gross earnings of 1911 were not equal to those of 1910, they appear to have been satisfactory in volume, considering the generally unsettled business conditions. Retrenchments in maintenance of way of 18%, in equipment charges of 15%, and a normal decline in transportation costs, reduced the operating ratio of the Lake Shore from 70.66% in 1910 to 64.26% in 1911, and enabled it to report the largest net earnings on record. MAINTENANCE The Lake Shore & ^Michigan Southern Railway Company has spent the following amounts for maintenance of way and equipment since 1907: Year Maintenance Total Per Way Equipment maintenance mile 1907 $6,328,637 $6,044,154 $12,372,791 $8,139 1908 4,909,069 5,422,114 10,331,183 6,836 1909 5,468,363 6,811,551 12,279,914 7,383 1910 7,549,661 7,873,217 15,422,878 9,273 1911 6,178,623 6,704,096 12,882,719 7,256 During the five years the company spent nearly $64,000,000 out of income for maintenance of way and equipment. This is an average of over $12,800,000 per year, or $7,778 per mile of road operated. The following table gives the average yearly traffic density, and the average amount spent annually for maintenance by the Lake Shore, Michigan Central, and the New York, Chicago & St. Louis for the decade ending 1911: [341 ] Ten-year average Traffic Maintenance density per mile Lake Shore 3,736,996 $8,245 Michigan Central 1,730,894 4,270 N. Y., C. & St. L 3,127,933 4,246 ADDITIONS AND BETTERMENTS Besides ample maintenance charges, the company has charged large amounts of income to improvements of both road and equipment. During the decade the following amounts have been spent: Year Improvements On equipment For construction, etc. 1902 $1,423,673 $2,768,788 1903 1,788,140 4,527,136 1904 2,776,034 2,781,202 1905 3,360,773 3,743,020 1900 1,201,847 4,221,846 1907 911,126 4,082,988 1908 1,292,276 1909 1,263,186 In 1910, $1,365,297 was charged to income as 1910 instalments on the 1907 and 1910 trust equipment certificates, and $1,481,957 was credited to appropriated surplus as the initial payment of 10% on the equipment trust certificates of 1910. In 1911, $1,365,297 was charged to income as 1911 instalments on the 1907 and 1910 trust equipment certificates. From 1902 to 1904 inclusive the above amounts were included in operating expenses, but in later years were shown separately on the income sheet. In the maintenance table above, as well as in the table of statistics given below, these amounts have not been included in operating expenses, but ap- pear as "Other charges to income" and are deducted from surplus. In addition, the following amounts have been spent on improvements to property and charged to Capital, in accordance with the ruling of the Interstate Commerce Commission : Year Improvements 1909 $3,564,414 1910 6,371,015 1911 2,722,976 (net) $12,658,405 DIVIDENDS The company began paying dividends in 1869, when 4% was paid, and except for the two years, 1874 and 1886, the Lake Shore has paid dividends continuously. Following is the company's record since 1886: Year Rate Year Rate 1887-8 4% 1903 7}4% 1889-90 5 1904-G 8 1891-2 6H 1907 12 1893-7 6 1908 14 1898 63^ 1909 12 1899-1902 7 1910-12 18 [ 342 ] The balance sheet of the Lake Shore & Michigan Southern Railway Company of December 31, 1911, showed a Profit and Loss balance of $36,154,623, and, together with the amount of appro- priated surplus for additions to property through income since June 30, 1907, of $8,845,323, this balance is equivalent to 90% of the company's outstanding capital. STATISTICS Following are the capitalization, earnings and traffic statistics of the Lake Shore & Michigan Southern Railway, based on the average miles operated, for the year 1900 and for the years 1905 to 1911 inclusive: [ 343 ] LAKE SHORE & MICHIGAN SOUTHERN RAILWAY FUcal CapiUil Funded Rentals Gross Owned by Net Average Extra year stock debt @ 5% capital company capital mUes operated t^ack 1900 $35,435 $35,949 ^13,086 $84,470 $19,049 $65,421 1,411 522 1905 32,895 66,659 17,178 116,732 51,245 65,487 1,520 747 1906 32,895 89,081 19,080 141,056 61,018 80,038 1,520 841 1907 32,895 98,947 18,686 150,528 67,139 83,389 1,520 845 1908 33,090 99,536 14,564 147,190 59,377 87,813 1,511 846 1909 30,066 90,438 22,353 142,857 4,195 138,662 1,663 918 1910 30,066 98,507 27,282 155,855 4,195 151,660 1,663 1,152 1911 28,169 94,745 28,519 151,433 7,184 144,249 1,775 1,194 Fiscal Gross Maintenance Transportat on Net Other Total Fixed Surplus year operating and general operating incom net charges available revenue Way Equipment expense revenue income for dividends 1900 $18,757 $2,189 $2,874 $6,699 $6,995 $531 $7,526 $2,805 $4,721 1905 25,395 5,337 5,464 9,811 4,783 2,314 7,097 4,157 2,940 1906 27,989 3,501 3,844 10,582 10,062 2,734 12,794 4,957 7,837 1907 29,574 4,163 3,976 11,297 10,138 3,760 13,898 5,753 8,145 1908 26,449 3,248 3,588 10,841 8,772 3,105 11,877 5,941 5,936 1909 27,126 3,288 4,095 9.467 10,276 3,900 14,176 6,408 7,768 1910 29,717 4.539 4,734 11,724 8,720 6,285 15,005 6,713 8,292 1911 27,245 3,480 3,776 10,251 9,738 5,760 15,498 6,742 8,756 Fiscal Dividends Other Surplus Operating Total Conducting Fixed Gross Net Per cent year charges to expenses maintenance transporta- charges earnings income earned on mcome to gross to gross tion to gross to gross to gross to net capital earnings earnings eammgs earnings capita capital stock 1900 $2,454 $2,267 62.72% 26.9% 35.8% 15.0% 22.2% 11.5% 13.3% 1905 2,603 337 81.17 42.6 38.6 16.3 21.7 10.8 8.9 1906 3,254 $3,567 1 016 64.06 26.3 37.8 17.7 19.8 16.0 23.8 1907 4.556 3,285 304 65.72 27.6 38.1 19.4 19.5 16.6 24.7 1908 3,928 855 1,153 66.84 25.8 41.0 22.5 18.0 13.5 17.9 1909 3,569 759 3,440 62.12 27.2 34.9 23.7 18.9 10.2 25.8 1910 5,354 820 2 118 70.66 31.3 39.4 22.6 19.0 9.9 27.5 1911 5.016 3 740 64.26 26.7 37^6 24.8 18.0 10.7 31.0 Fiscal Train Maintenance Conduct- Train Rate pe r mile Freight Train Freight 'assenger. year mile per revenue ing trans- mile density load to all freight earnings train mile portation earnings Per Per revenue traffic and (gross) per revenue (net) passenger ton tons company Way Equipme nt train mile 1900 $2.03 $ 237 $.312 $.727 $.71 $.0203 $.0050 2,566,144 352 69% 21,058 1905 2.51 527 539 .969 .47 .0203 .0052 3,355,210 619 69 29,769 1906 2.51 315 345 .952 .90 .0202 .0052 3,698,357 624 70 37,668 1907 2.55 358 342 .973 .87 .0196 .0053 3,777,147 618 69 37,913 1908 2.45 301 333 1.005 .81 .0191 .0052 3.211,690 586 65 37,078 1909 2.54 307 382 .884 .96 .0181 .0052 3,715,969 624 65 36,877 1910 2.42 370 386 .957 .71 .0186 .0052 3,803.178 593 66 35,740 1911 2.57 328 356 .966 .92 .0188 .0053 3,508,010 634 64 35,675 In the capitalization figures above, it will be noted that, in 1909, there was a radical decline in the column " Owned by company " and a corresponding increase in " Net capital." This is due to the fact that prior to that time the company reported its securi- ties in bulk as a capital asset, but, following the Interstate Commerce Commission ruling, in 1909 it divided its securities into two groups, one showing those of proprietary and controlled roads held as capital investments, and the other showing its investment in outside properties. After and including 1909, only securities held as capital assets have been included in the column " Owned by company " above. It is interesting to note, however, that in 1911 the Lake Shore reported a total security investment of $120,445,000, or upwards of .$68,000 for every mile operated, of which $12,751,000 represented securities of proprietary and controlled companies, and .$107,089,000 represented its holdings in outside properties but included among working assets as Marketable Securities. [344 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Lake Shore & Michi- gan Southern Railway Sj'stem, together with the bases on which they have sold during the decade ending December 31, 1912: LAKE SHORE & MICHIGAN SOUTHERN RAILWAY First Mortgage 3^s Dated June 1, 1897 Maturing June 1, 1997 Interest payable June 1 and December 1 at Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Authorized $50,000,000 ' Outstanding $50,000,000 Per mile . . 60,530 Security: The above bonds are secured by a first mortgage on 825.79 miles of the company's line, in- cluding the 293.71 miles from Buffalo, N. Y., to Toledo, O.; Palmyra, Mich., to Chicago, 111., 215.90 miles; Air Line Junction to Elkhart, Ind., 131.10 miles; also on buildings, bridges, rolling stock, incomes, future acquisitions, etc. Trustees: United States Trust Company, New York, and John T. Dye, Esq. These bonds sold in 1902 on a 3.20 to 3.35 basis 1903 3.30 3.55 1904 3.40 3.55 1905 3.40 3.55 1906 3.45 3.75 1907 3.70 4.25 1908 3.65 3.95 1909 3.65 3.875 1910 3.80 3.90 1911 3.90 4.05 1912 3.95 4.05 The above bonds are considered a legal investment for savings banks in New England. LAKE SHORE & MICHIGAN SOUTHERN RAILWAY 25-year Debenture 4s Dated November 18, 1903 Maturing September 1, 1928 Interest payable March 1 and September 1 at the Grand Central Station, New York. Coupon bonds of $1,000 and $5,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000, $20,000, $50,000, $100,000 or multiples of $5,000. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $50,000,000 Security: Although not secured by a mortgage, the above bonds are a direct obligation of the company, which has agreed that " so long as any of said bonds are outstanding and unpaid, the Railway Company wiO not make any new mortgage upon its railroad, without also thereby including therein every bond issued under this indenture equally and ratably with every bond issued [ 346 ] Trustee : under and secured by any such mortgage; but this covenant shall not prevent the renewal extension of any existing mortgage." Guaranty Trust Company, New York. These bonds sold in 1904 on a 3.87 to 4.10 basis 1905 3.80 4.00 1906 3.87 4.25 1907 4.05 4.55 1908 4.20 4.87 1909 4.25 4.45 1910 4.35 4.65 1911 4.40 4.65 1912 4.50 4.75 The above bonds are considered a legal investment for savings banks in New Hampshire. LAKE SHORE & MICHIGAN SOUTHERN RAILWAY 25-year Debenture 4s Dated May 1, 1906 Maturing May 1, 1931 Interest payable May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $1,000 and $5,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000, $20,000, $50,000, $100,000 or multiples of $5,000. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $50,000,000 Security : Although not secured by a mortgage, the above bonds are a direct obligation of the company, which has agreed that " so long as any of said bonds are outstanding and unpaid, the Railway Company will not make any new mortgage upon its railroad, without also thereby including therein every bond issued under this indenture equally and ratably with every bond issued under and secured by any such mortgage; but this covenant shall not prevent the renewal or extension of any existing mortgage." Trustee: Guaranty Trust Company, New York. These bonds sold in 1907 on a 4.62 to 5.20 basis 1908 4.25 4.80 1909 4.25 4.50 1910 4.30 4.60 1911 4.40 4.60 1912 4.50 4.70 The above bonds are considered a legal investment for savings banks in New Hampshire. [ 347 JAMESTOWN, FRANKLIN & CLEARFIELD RAILROAD First Mortgage 4s Dated June 1, 1909 Maturing June 1, 1959 Interest payable June 1 and December 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Coupon and registered bonds interchangeable. Authorized $"25,000,000 Outstanding $11,000,000 Per mile . . 89,435 Provisions of $14,000,000 of the above issue are reserved for extensions, additions, improvements, etc. issue : Security: The above bonds are secured by a first mortgage on 123.39 miles of road, including the line from the Ohio-Pennsylvania State line to a junction with the Allegheny Valley Railway at Brookville, Pa., 103.70 miles; also on branches, franchises, incomes, future acquisitions, etc. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company by endorsement. Trustee : Guaranty Trust Company, New York. The Jamestown, Franklin & Clearfield Railroad Company was chartered under the laws of Pennsylvania on March 8, 1909, as a consolidation of the Jamestown & Franklin Railroad, the Frank- lin & Clearfield Railroad, the Central Trunk Railway and the Jackson Coal Railroad Companies. The road is leased, at an annual rental equal to the interest on its funded and other indebtedness, taxes, and 5% per annum on the capital stock, to the Lake Shore & Michigan Southern Railway Company, which owns practically all its entire capital stock. These bonds sold in 1909 on a 4.35 basis (bid) 1910 4.25 to 4.30 basis 1911 4.20 4.30 1912 4.27 4.30 The above bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 348 ] KALAMAZOO, ALLEGAN & GRAND RAPIDS RAILROAD First Mortgage Currency 5s Dated July 2, 1888 Maturing July 1, 1938 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Authorized $840,000 Outstanding $840,000 Per mile . . 14,500 Security: These bonds are secured by a first mortgage on 58.45 miles of road, extending from Kalamazoo to Grand Rapids, Mich., and on franchises, incomes, etc. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company. Trustee: Union Trust Company, New York. The Kalamazoo, Allegan & Grand Rapids Railroad Company was chartered June 3, 1868, under the laws of the State of Michigan. On September 21, 1869, the road was leased to the Lake Shore & Michigan Southern Railway Company for 999 years at an annual rental of $78,600, equal to 6% on the capital stock and 5% on the bonds. The above bonds were quoted in 1909 on a 4.25 basis (bid) 1910 4.35 1911 4.50 December, 1912 4.65 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. KALAMAZOO & WHITE PIGEON RAILROAD First Mortgage Currency 5s Dated January 1, 1890 Maturing January 1, 1940 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Registered bonds of $1,000 and $5,000. Authorized $400,000 Outstanding $400,000 Per mile . . 10,800 Security: The above bonds are secured by a first mortgage on 30.54 miles of railroad, extending from White Pigeon to Kalamazoo, IMich., also on franchises, incomes, future acquisitions, etc. [ 349 ] The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company by endorsement. Trustee : Union Trust Company, New York. The Kalamazoo & White Pigeon Railroad was incorporated under the laws of the State of Michigan in 1869 as a consolidation of the Schoolcraft & Three Rivers Railroad and the Kalamazoo & Schoolcraft Railroad Companies. The entire capital stock is owned by the Lake Shore & Michigan Southern Railway Company, which leases the road at an annual rental equal to the interest on $400,000 bonds, taxes, etc. These bonds sold in 1902 on a 3.60 basis In 1909 they were quoted on a 4.25 basis (bid) 1910 4.45 1911 4.50 December, 1912 4.20 (bid) The above bonds are considered a legal investment for savings banks in Maine, New Hampshire, Con- necticut and Rhode Island. MAHONING COAL RAILROAD First Mortgage Currency 5s Dated July 1, 1884 Maturing July 1, 1934 Interest payable January 1 and July 1 at the Union Trust Company, New York. Coupon bonds of $1,000. Authorized $1,500,000 Outstanding $1,500,000 Per mile . . 22,060 Security : The above bonds are secured by a first mortgage on 68.41 miles of road, including the line from Andover to Youngstown, O., 38.18 miles; Mann to Brookfield, Pa., 24.49 miles, and the Sharon Branch, 5.74 miles; also on branches hereafter built, on all property now owned or hereafter acquired, and all franchises and incomes. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company by endorsement. Trustee: Union Trust Company, New York. The Mahoning Coal Railroad Company was chartered under the laws of Pennsylvania and Ohio, February 18, 1871, and the road was opened for traffic in 1873. In 1884 the property was leased in perpetuity to the Lake Shore & Michigan Southern Railway Company at an annual rental of 40% of the gross earnings. In case 40% is not sufficient to pay interest on bonds and 5% on the preferred stock, the Lake Shore & Michigan Southern Railway Company agrees to advance the sum needed, this amount to be a charge on future earnings. On December 31, 1911, the Lake Shore & Michigan Southern Railway Company owned $399,500 preferred and $865,900 common stock of the Mahoning Coal Railroad Company. [ 350 ] The above bonds sold in 1902 on a 3.55 1903 3.70 to 3.85 1905 3.65 3.67 1906 3.55 3.70 1907 4.45 1909 4.20 (bid) 1910 4.35 (bid) 1911 4.20 4.25 December, 1912 4.30 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. STURGIS, GOSHEN & ST. LOUIS RAILWAY First Mortgage 3 s Dated December 1, 1889 Maturing December 1, 1989 Interest payable June 1 and December 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Authorized $2,500,000 Outstanding $322,000 Per mile . . 11,100 Provisions of This issue was authorized to the amount of $322,000 and $15,000 per mile of additional road issue: to the aggregate of $2,500,000. Security : The above bonds are secured by a first mortgage on 28.92 miles of road extending from Goshen, Ind., to Sturgis, Mich., and on all property now owned or hereafter acquired, and all incomes and franchises. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company by endorsement. Trustee: Metropolitan Trust Company, New York. The Sturgis, Goshen & St. Louis Railway was taken over from the receivers, December 1, 1889, by the Lake Shore & Michigan Southern Railway Company, which acquired the entire capital stock and assumed the bonded indebtedness. The above bonds are considered a legal investment for savings bank in Maine, New Hampshire and Rhode Island. [ 351 ] CHICAGO, INDIANA & SOUTHERN RAILROAD 50-year Mortgage 4s Dated June 27, 1906 Maturing January 1, 1956 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000 and multiples of $10,000. Coupon and registered bonds interchangeable. Authorized $20,000,000 Outstanding $15,150,000 Per mile . . 44,950 $4,850,000 bonds of this issue are reserved to retire Indiana, Illinois & Iowa First 4s of 1950. Security: The above bonds are secured by direct mortgage on 336.60 miles of road. They are secured by a first mortgage on 130.98 miles, including the 109.09 miles of line from Indiana Harbor, Ind., to Danville, 111., and by a second mortgage on the 205.62 miles which are covered by the first lien of the Indiana, Illinois & Iowa 4s of 1950, for a description of which see below. The bonds are also secured by mortgage on leaseholds, franchises, incomes, etc. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company. Trustees: Guaranty Trust Company, New York, and William H. Wildhack, Esq. The Chicago, Indiana & Southern Railroad Company was incorporated under the laws of Indiana and Illinois on April 9, 190G, as a consolidation of the Indiana. Illinois & Iowa Railroad, the Indiana Harbor Railroad and the Danville & Indiana Harbor Railroad ("omijanies. The road is controlled by the Lake Shore & INlichigau Southern Railway Company through ownership of $12,000,000 of $15,000,000 common stock and the entire $5,000,000 preferred stock. These bonds sold in 1909 on a 4.20 to 4.30 basis 1910 4..30 4.40 1911 4.35 4.45 1912 4.45 4.50 The above bonds are considered a legal investment for savings banks in New Hampshire. [ 352 INDIANA, ILLINOIS & IOWA RAILROAD First Mortgage 4s Dated July 1, 1900 Maturing July 1, 1950 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $12,000,000 Outstanding $4,850,000 Per mile . . 23,540 Provisions of No more of the above bonds are to be issued, in accordance with the terms of the mortgage issue: of the Chicago, Indiana & Southern 4s of 1956, a sufficient number of which have been reserved to retire the above bonds. Security: These bonds are secured by a first mortgage on 205.62 miles of road, including the 192.08 miles from South Bend, Ind., to Seatonville Junction, 111., also on real estate, equipment, buildings, franchises, etc. The bonds are a direct obligation of the Chicago, Indiana & Southern Railroad Company. Trustees: Illinois Trust & Savings Bank, Chicago, and Joseph D. Oliver, Esq. The Indiana, Illinois & Iowa Railroad Company was formed September 15, 1898, as a consolida- tion of the Indiana, IIHnois & Iowa Railroad Company with the Indiana, Illinois & Iowa Railway Company. In 1906 the road was consolidated with the Indiana Harbor Railroad and the Danville & Indiana Harbor Railroad Companies, the new company being known as the Chicago, Indiana & Southern Railroad Company. These bonds sold in 1902 on a 3.875 to 4.00 basis 1903 3.90 4.15 1904 3.95 4.10 1905 3.98 4.02 1906 4.00 4.05 1907 4.00 4.35 1908 4.25 1909 4.10 4.20 1910 4.10 4.25 1911 4.20 4.30 1912 4.22 4.40 These bonds are considered a legal investment for savings banks in Maine. [ 353 ] LAKE ERIE & WESTERN RAILROAD First Mortgage Ss Dated February 21, 1887 Maturing January 1, 1937 Interest payable January 1 and July 1 at the Chase National Bank, New York. Coupon bonds of $1,000, fully registerable. Authorized $10,000 per mile Outstanding $7,250,000 Per mile . . 10,210 Security: The above bonds are secured by a first mortgage on 710.10 miles of road, including the 412.79 miles from Sandusky, O., to Peoria, 111.; 158.64 miles from Indianapolis to Michigan City; and the 104.59 miles from Fort Wayne to Connersville, Ind.; also on equipment and future acquisitions. Trustee: Central Trust Company, New York. The Lake Erie & Western Railway Company was formed January 1, 1880, as a consolidation of the Lafayette, Bloomington & Mississippi Railroad, the Lafayette, Muncie & Bloomington, the Indianapolis & Sandusky, and the Lake Erie & Louisville Railroad Companies. In 1886 the road was sold under foreclosure. In 1887 the Lake Erie & Western Railroad Company was formed to purchase the property of the old company. The road is operated by its own organization, but is controlled by the Lake Shore & Michigan Southern Railway Company through ownership of $5,940,000 of the $11,840,000 common stock and $5,930,000 of the $11,840,000 preferred stock. These bonds sold in 1902 on a 3.80 to 3.95 basis 1903 3.90 4.15 1904 3.90 4.15 1905 3.90 4.00 1906 3.95 4.20 1907 4.15 4.45 1908 4.15 4.60 1909 4.05 4.25 1910 4.20 4.45 1911 4.30 4.45 1912 4.35 4.55 The above bonds are considered a legal investment for savings banks in Mai: [ 354 ] LAKE ERIE & WESTERN RAILROAD Second Mortgage 5s Dated June 30, 1891 Maturing July 1, 1941 Interest payable January 1 and July 1 at the Chase National Bank, New York. Coupon bonds of $1,000. Authorized $3,625,000 Outstanding $3,625,000 Per mile . . 5,100 Security: The above bonds are secured by a second mortgage on the same property covered as a first mortgage by the Lake Erie & Western 5s of 1937 (see above). Trustee: Central Trust Company, New York. These bonds sold in 1902 on a 4.05 to 4.20 basis 1903 4.30 4.50 1904 4.20 4.45 1905 4.15 4.30 1906 4.25 4.40 1907 4.55 4.62 1908 4.65 5.00 1909 4.45 4.55 1910 4.55 4.60 1911 1912 4.75 4.75 NORTHERN OHIO RAILWAY First Mortgage 5s Dated October 1, 1895 Maturing October 1, 1945 Interest payable Ajjril 1 and October 1 at the Chase National Bank, New York. Coupon bonds of $1,000, registerable as to i)rincipal. x\uthorized $4,000,000 Outstanding $2,500,000 Per mile . . 15,430 Provisions of The above bonds were authorized to the amount of $4,000,000, of which $2,500,000 were issued issue: at once on the road completed at the date of the indenture. The residue, $1,500,000, are to be issued at the rate of $15,000 per mile of completed road either constructed or acquired. Security: The bonds are secured by a first mortgage on 161.75 miles of road extending from Akron to Delphos, O.; also on terminals, land, rolling stock, incomes, etc. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Lake Erie & Western Railroad Company. Trustee: Central Trust Company, New York. [ 355 ] The Northern Ohio Railway Company was formed in 1895 to take over the property of the Pitts- burgh, Akron & Western Railroad Company which had been sold under foreclosure. This latter road was the result of a consolidation in 1890 of the Pittsburgh, Akron & Western Railway and the Cleve- land & Western Railroad Companies. On October 1, 1895, the Northern Ohio Railway Company leased its property for 999 years to the Lake Erie & Western Railroad Company which guarantees the principal and interest on its $4,000,000 First Mortgage 5% bonds, mentioned above. The entire common stock of the road is owned by the Lake Erie & Western Railroad Company. These bonds sold in 1902 on a 4.20 to 4.35 basis 1903 4.25 4.50 1904 4.15 4.50 1905 4.00 4.125 1906 4.125 1907 4.35 4.45 1908 4.35 4.70 1909 4.22 4.30 1910 4.35 4.50 1911 4.40 4.55 1912 4.70 4.75 The above bonds are considered a legal investment for savings banks in Maine. NEW YORK, CHICAGO & ST. LOUIS RAILROAD First Mortgage Sinking Fund 4s Dated October 1, 1887 Maturing October 1, 1937 Interest payable April 1 and October 1 at tiie Union Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized .$20,000,000 Outstanding $18,979,000 Per mile . . 38,300 $1,021,000 bonds of the above issue have been retired by the sinking fund. Sinking fund: "Whenever the net earnings for the year ending September 30 shall equal or exceed $900,000 the company shall pay to the trustee $100,000 to be applied to the purchase of bonds at not exceeding 102 and accrued interest, the bonds to be obtained through advertisements. If in any year $900,000 be not earned over operating expenses, or if the trustee be unable to pur- chase any bonds at said price, the company shall not be required to make this payment." Security : The above bonds are secured by a first mortgage on 494.72 miles of road extending from Buffalo, N. Y., to the Indiana-Illinois State Line, and on trackage rights, lands, buildings, equipment and future acquisitions. Trustee: The (Central Trust Company, New York. The New York, ('hicago & St. Louis Railway Company was organized in 1881 l)y the consolida- tion of comj)anies that had been incorporated but not constructed. Construction was commenced [ 856 ] immediately after the organization and the road was opened in October, 1882. In 1885 interest was defaulted and a receiver appointed. In 1887 the Railway Company was sold under foreclosure and the new company consolidated with the Erie & State Line Railroad, the Cleveland & State Line Railroad and the Fort Wayne & Illinois Railroad Companies, forming the present company. The New York, Chicago & St. Louis Railroad Company, although operated as an independent organization, is controlled by the Lake Shore & Michigan Southern Railway Company through ownership of $2,503,000 of the $5,000,000 first preferred, $6,275,000 of the $11,000,000 second pre- ferred, and $6,240,000 of the $14,000,000 common stocks. These bonds sold in 1902 on a 3.60 to 3.80 basis 1903 3.75 4.08 1904 3.67 3.85 1905 3.67 3.77 1906 3.67 3.90 1907 3.80 4.40 1908 3.80 4.30 1909 3.87 4.02 1910 3.98 4.15 1911 3.98 4.10 1912 3.95 4.15 The above bonds are considered a legal investment for savings banks in Maine. NEW YORK, CHICAGO & ST. LOUIS RAILROAD 25-year Debenture Gold 4s Dated March 28, 1906 Maturing May 1, 1931 Interest payalile May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000, $10,000, $20,000, $50,000 and multiples of $5,000. Coupon and registered bonds interchangeable. .Authorized $10,000,000 Outstanding $10,000,000 Security: The abo\-e bonds, although not secured by a mortgage, are a direct obligation of the company, which covenants that "so long as any of said bonds are outstanding and unpaid, the Railroad Company will not make any new mortgage upon its railroad, without also thereby including therein every bond issued under this indenture equally and ratably with every bond issued under and secured by any such mortgage; but this covenant shall not prevent the renewal or extension of any existing mortgage." Trustee: Guaranty Trust Company, New York. For history of the New York, Chicago & St. Louis Railroad Company, see above. These bonds sold in 1908 on a 3.67 to 4.10 basis 1909 4.45 4.63 1910 4.60 4.75 1911 4.60 4.80 1912 4.70 5.00 [ 357 ] PITTSBURGH & LAKE ERIE RAILROAD First Mortgage 6s Dated January 1, 1878 Maturing January 1, 1928 Interest payable January 1 and July 1 at the Company's oflSce, Pittsburg. Coupon bonds of $1,000. Authorized $2,000,000 Outstanding $2,000,000 Per mile . . 28,000 Security: The above bonds are secured by a first mortgage on 71.25 miles of road, including the 64.73 miles from Pittsburg, Pa., to Hazelton, O.; also on all property, branches, lands, buildings, rolling stock, incomes and franchises. Trustee: Safe Deposit Company of Pittsburg. The Pittsburgh & Lake Erie Railroad Company was chartered under the laws of Pennsylvania on May 18, 1875. The line was opened for traffic in 1879. The road is operated independently, but is controlled by the Lake Shore & Michigan Southern Railway Company through ownership of $12,600,200 capital stock. These bonds were quoted in 1909 on a 4.10 basis (bid) 1910 4.30 1911 4.30 1912 4.55 The above bonds are considered a legal investment for savings banks in New Hampshire, Maine, Connecticut and Rhode Island. PITTSBURGH & LAKE ERIE RAILROAD Second Mortgage 5s Dated April 1, 1889 Maturing January 1, 1928 Interest payable Ajnil 1 and October 1 at the New York Trust Company, New York. Coupon bonds of $1,000. Authorized $2,000,000 Outstanding $2,000,000 Per mile . . 28,000 Security : The above bonds are secured by a second mortgage on the same ]}roperty covered by the first lien of the Pittsburgh & Lake Erie First 6s of 1928. Trustee: New York Trust Comi)any, New York. For history of the Pittsburgh & Lake Erie Railroad Com])any, see above. [ 358 ] These bonds sold in 1906 on a 4.45 basis 1908 5.00 1909 5.00 1910 5.00 (bid) 1911 4.70 (bid) 1912 4.55 The above bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. BEAVER & ELLWOOD RAILROAD First Mortgage 4s Dated July 1, 1899 Maturing June 1, 1919 Interest payable June 1 and December 1 at the Guaranty Trust Company, New York. Coupon bonds of $1,000. Authorized $150,000 Outstanding $150,000 Per mile . . 20,000 Security: The above bonds are secured by a first mortgage on 7.51 miles of road, branches and spurs, including the 2.93 miles from Ellvvood Junction to Ellwood City, Pa., also on buildings, ex- tensions, real estate, franchises, etc. Redemption : These bonds are redeemable at par and interest. Trustee: Guaranty Trust Company, New York. The Beaver & Ellwood Railroad Company was chartered under the law.s of Pennsylvania and constructed in 1890. The road was leased for "20 years from May 1, 1899, to the Pittsburgh & Lake Erie Railroad Company, which owns the entire capital stock. The above bonds are considered a legal investment for savings banks in Maine. The eMire issue was called for payment on December 1, 1912. [ 359 ] PITTSBURGH, McKEESPORT & YOUGHIOGHENY RAILROAD First Mortgage 6s Dated July 1, 1882 Maturing July 1, 1932 Interest payable January 1 and July 1 at the Union Trust Company, New York. Coupon bonds of $1,000. Authorized $2,250,000 Outstanding $2,250,000 Per mile . . 36,880 Security: The above bonds are secured by a first mortgage on 61.23 miles of road, including the 56.83 miles extending from Pittsburg to New Haven, Pa.; also on lands, buildings, rolling stock, franchises and incomes. The bonds are GUARANTEED jointly and severally as to PRINCIPAL and INTEREST by the Lake Shore & Michigan Southern Railway Company and the Pittsburgh & Lake Erie Railroad Company. The Pittsburgh, McKeesport & Youghiogheny Railroad Company was chartered under the laws of Pennsylvania, August 4, 1881. The road was opened for traffic in 1883. On January 1, 1884, the property was leased for 999 years from August 3, 1881, to the Pittsburgh & Lake Erie Railroad Company, at an annual rental equal to the interest on the first and second mortgage bonds and divi- dends at the rate of 6% on the stock. In addition, the principal and interest on the first and second mortgage bonds, and dividends on the stock are guaranteed by the Pittsburgh & Lake Erie and the Lake Shore & Michigan Southern Railway Companies, which agree to redeem the stock on July 1, 1934, at par. These bonds sold in 1903 on a 3.80 basis 1909 3.95 1910 4.40 (bid) 1911 4.47 (bid) December, 1912 4.70 (bid) The above bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massa- chusetts, Connecticut and Rhode Island. PITTSBURGH, McKEESPORT & YOUGHIOGHENY RAILROAD Second Mortgage 6s Dated July 15, 1884 Maturing July 1, 1934 Interest payable January 1 and July 1 at the Union Trust Company, New York. Coupon bonds of $1,000. Authorized $1,750,000 Outstanding $1,000,000 Per mile . . 16,400 Security : The above bonds are secured I>y a second mortgage on the property covered by the first mortgage of the Pittsburgh, McKeesport & Youghiogheny First 6s of 1932 (see above). [ 360 ] The bonds are GUARANTEED jointly and severally as to PRINCIPAL and INTEREST by the Pittsburgh & Lake Erie Railroad and the Lake Shore & Michigan Southern Railway Companies by endorsement. For history of the Pittsburgh, McKeesport & Youghiogheny Raih-oad Company, see page 360. These bonds were quoted in 1909 on a 4.40 basis (bid) 1910 4.60 1911 4.40 December, 1912 4.35 The above bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. McKEESPORT & BELLE VERNON RAILROAD First Mortgage 6s Dated July 2, 1888 Maturing July 1, 1918 Interest payable January 1 and July 1 at Fidelity Title & Trust Company, Pittsburg. Coupon bonds of .$1,000, registerable as to principal. Authorized .$600,000 Outstanding .$()00,000 Per mile . . 21,430 Security: The above bonds are secured by a first mortgage on 27.80 miles of road, extending from Rey- noldton to Belle Vernon, Pa.; also on lands, buildings, rolling stock, franchises, incomes, etc. The bonds have been ASSUMED by the Pittsburgh, McKeesport & Youghiogheny Railroad Company. Trustee: Fidelity Title & Trust Company, Pittsburg. The McKeesport & Belle Vernon Railroad Company was chartered in 1886, and the road was opened for traffic in 1890. In 1890 tlie company was consolidated with the Pittsburgh, McKeesport & Youghiogheny Railroad Company, which owned the entire capital stock. These bonds were quoted in 1909 on a 4.45 basis (bid) 1910 4.95 1911 4.65 1912 5.00 The above bonds are considered a legal investment for savings banks in Maine and Connecticut. BOND DESCRIPTIONS OF CONTROLLED ROADS Following is a descrii)tion of the bond issues of com])anies operated independently but con- trolled through stock ownership by the Lake Shore & Michigan Southern Railway Company: [ 361 ] INDIANA HARBOR BELT RAILROAD General Mortgage 4s and 2s Dated July 1, 1907 Maturing July 1, 1957 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and multiples of $5,000. Coupon and registered bonds interchangeable. Authorized $25,000,000 Outstanding (4s) $1,725,000 (2s) 2,500,000 Per mile . . . 98,250 Provisions of The $4,225,000 outstanding comprise two issues, $1,725,000 bearing 4% interest per annum, issue: and $2,500,000 bearing interest at the rate of 2% per annum the first five years, 3% per annum the second five years, and 4% per annum thereafter. In addition to the amount outstanding, $18,275,000 are reserved for improvements, additions, etc., and $2,500,000 are reserved to retire a like amount of Cincinnati, Hamilton & Western 6s of 1927. Security: These bonds are secured by a direct mortgage on 42.68 miles of road. They are secured by a first mortgage on 16.99 miles, and by a second mortgage on 25.69 miles, covered as a first lien by the Chicago, Hammond & Western First 6s of 1927 (see below). They are also secured by mortgage on lands, buildings, rolling stock and franchises in connection with said railroads, and all projierties hereafter acquired by the use of bonds issued hereunder, and all incomes thereof. The bonds are GUARANTEED as to PRINCIPAL and INTEREST jointly and severally by the Lake Shore & iNIichigan Southern Railway Company and the Michigan Central Rail- road Company. Trustee: Guaranty Trust Company, New York. The Indiana Harbor Belt Railroad was chartered under the laws of Indiana on May 16, 1896, as the East Chicago Belt Railroad Company. On June 29, 1907, the present title was adopted. The road connects the Atchison, Topeka & Santa Fe, the Baltimore & Ohio, the Chicago, Milwaukee & St. Paul, the Chicago & Northwestern, the Chicago, Burlington & Quincy, the Chicago, Rock Island & Pacific, the Cleveland, Cincinnati, Chicago & St. Louis, the Erie, the Illinois Central, the Lake Shore & Michigan Southern, and other roads entering Chicago. The road is operated independently. Of the capital stock, 60% is owned ecjually by the Lake Shore & Michigan Southern Railway and the Michigan Central Railroad Companies, and 40% is owned equally by the Chicago & Northwestern and the Chicago, Milwaukee & St. Paul Railway Companies. The above bonds are considered a legal investment for savings banks in New Hampshi ire. 362 ] CHICAGO, HAMMOND & WESTERN RAILWAY First Mortgage 6s Dated January 1, 1897 Maturing January 1, 1927 Interest payable January 1 and July 1 at the Central Trust Company, New York. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 96,150 Security: The above bonds are secured by a first mortgage on 25.69 miles of road, including 11.21 miles from Franklin Park to McCook, 111., and 14.48 miles from Blue Island, 111., to Whiting, Ind.; also on lands, buildings, franchises and incomes. The bonds have been ASSUMED by the Indiana Harbor Belt Railroad Company. Equity: This issue is prior in lien to the Indiana Harbor Belt Railroad General 4s and 2s of 1957, a sufficient number of which have been reserved to provide for the retirement of this issue. Trustee: E. Francis Hyde, Esq. The Chicago, Hammond & Western Railway Company was chartered under the laws of Illinois on April 21, 1896. In 1898 it was consolidated with the Chicago & Indiana State Line Railway under the name of the Chicago Jimction Railway. July 1, 1907, the Chicago Junction Railway Company sold the property that had been the Chicago, Hammond & Western, now^ known as the "Outer Line," to the Indiana Harbor Belt Railroad, which assumed the First Mortgage 6s of 1927 as above. These bonds were quoted in 1909 on a 4.65 basis (bid) 1910 4.70 1911 4.60 1912 4.50 The above bonds are considered a legal investment for savings banks in Maine. TOLEDO & OHIO CENTRAL RAILWAY First Mortgage 5s Dated July 1, 1885 Maturing July 1, 1935 Interest payable January 1 and July 1 at the Central Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $5,000,000 Outstanding $3,000,000 Per mile . . 15,230 In accordance with the terms of the Toledo & Ohio Central Western Division Mortgage and the General JSIortgage, no further bonds are to be issued. Security: The above bonds are secured by a first mortgage on 197.27 miles of road, including the 160.57 miles from Toledo to Bremen, O.; also on all extensions hereafter made or acquired to or [ 363 ] within Toledo and Columbus, and on terminal property hereafter acquired in Toledo, Columbus and Coming. They are also secured on lands, buildings, rolling stock, franchises, incomes, etc. Equity: These bonds are prior in lien to $2,500,000 Toledo & Ohio Central Western Division 5s of 1935 and $2,000,000 General 5s of 1935. Trustee: Central Trust Company, New York. The Toledo & Ohio Central Railway Company was incorporated under the laws of Ohio on June 30, 1885, as a reorganization of the Ohio Central Railroad Company. The road is controlled by the Lake Shore & Michigan Southern Railway Company through ownership of the entire out- standing capital stock. These bonds sold in 1902 on a 4.20 to 4.30 basis 1903 4.25 4.48 1904 4.125 4.27 1905 4.05 4.15 1906 4.05 4.30 1907 4.30 5.00 1908 4.40 4.875 1909 4.20 4.35 1910 4.20 4.60 1911 4.30 4.40 1912 4.35 4.62 The above bonds are considered a legal investment for savings banks in Maine. TOLEDO & OHIO CENTRAL RAILWAY Western Division First Mortgage 5s Dated October 1, 1892 Maturing October 1, 1935 Interest payable April 1 and October 1 at the Central Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 6,330 Security: The above bonds are secured by a direct mortgage on 394.91 miles of road. They are secured by a first mortgage on 137.74 miles from Whitmore to Truro Junction, O.; and by a second mortgage on the 197.27 miles covered as a first lien by the Toledo & Ohio Central First 5s of 1935; and by a third mortgage on 59.90 miles covered as a first lien by the St. Mary's Division First 4s of 1951. Equity: This issue is prior in lien to the Toledo & Ohio Central General 5s of 1935. Trustee: New York Trust Company, New York. For history of the Toledo & Ohio Central Railway Company, see above. [ 364 ] These bonds sold in 1902 on a 4.22 basis 1903 4.25 to 4.40 basis 1904 4.35 1905 4.05 4.15 1906 4.10 4.30 1907 4.30 5.35 1908 4.40 4.875 1909 4.25 1910 4.375 (bid) 1911 4.45 (bid) 1912 4.45 TOLEDO & OHIO CENTRAL RAILWAY General Mortgage 5s Dated June 1, 1894 Maturing June 1, 1935 Interest payable June 1 and December 1 at the Central Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Outstanding $2,000,000 Per mile . . . 5,065 Security: These bonds are secured by direct mortgage on 394.91 miles of road. They are secured by a second mortgage on the 137.74 miles covered as a first lien by the Toledo & Ohio Central Western Division First 5s of 1935; by a third mortgage on the 197.27 miles covered as a first lien by the Toledo & Ohio Central First 5s of 1935; and by a fourth mortgage on the 59.90 miles covered as a first lien by the Toledo & Ohio Central St. Mary's Division First 4s of 1951. They are also secured by mortgages on rolling stock, real estate, terminal properties, franchises, incomes, etc. Trustee: Central Trust Company, New York. For history of the Toledo & Ohio Central Railway Company, see page 364. These bonds .sold in 1902 on a 4.40 to 4.60 basis 1903 4.27 4.70 1904 4.55 4.80 1905 4.30 4.55 1906 4.45 4.625 1907 4.50 5.35 1908 4.75 5.30 1909 4.65 4.95 1910 4.65 5.05 1911 4.70 4.90 1912 4.70 4.80 [ 305 TOLEDO & OHIO CENTRAL RAILWAY St. Mary's Division First Mortgage 4s Dated February 1, 1901 Maturing February 1, 1951 Interest payable February 1 and August 1 at the Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $500,000 Outstanding $500,000 Per mile . . 8,330 Security: These bonds are secured by a first mortgage on 59.90 miles of road extending from Peoria to St. Mary's, O.; also on future acquisitions, etc. Equity: This issue is prior in lien to $500,000 St. Mary's Division First Preferred Income 4s of 1951; $2,500,000 Western Division First 5s of 1935, and $2,000,000 General 5s of 1935. Trustee : Guaranty Trust Company, New York. For history of the Toledo & Ohio Central Railway Company, see page 364. These bonds were quoted in 1909 on a 4.40 basis (bid) 1910 4.60 1911 4.70 1912 4.85 TOLEDO & OHIO CENTRAL RAILWAY St. Mary's Division First Preference Income 4s Dated February 1, 1901 Maturing February 1, 1951 Interest payable, if earned, October 1 at the Second National Bank, Toledo, Ohio. Registered bonds of $1,000. Authorized $500,000 Outstanding $500,000 Per mile . . 8,330 Provisions of " The Company . . . shall ascertain and declare the net earnings and income applicable to issue: the payment of interest on the bonds issued hereunder, by deducting from the gross earnings of the branch line herein described, all sums paid for interest on bonds having prior lien, and all expenses and losses of operating said branch railroad, and for maintenance, taxes, repairs, renewals and such betterments to the road, equipment and property used on said road as the Company may deem necessary and apply such net earnings to the payment of the interest on the bonds issued hereunder." [ 366 ] Security: These bonds are secured by a second mortgage on the 59.90 miles of railroad extending from Peoria to St. Mary's, O., covered, as a first lien, by the St. Mary's Division First 4s of 1851. Trustee: Standard Trust Company, New York. For history of tlie Toledo & Ohio Central Railway Company, see page 364. TOLEDO & OHIO CENTRAL RAILWAY Equipment Trust Obligations On December 31, 1911, the company had $1,304,000 of Equipment Trust obligations out- standing as follows: $96,000 43-^s maturing semi-annually to January 1, 1913. 308,000 4s maturing semi-annually to May 15, 1917. 960,000 4s maturing semi-annually to January 1, 1920. KANAWHA & MICHIGAN RAILWAY First Mortgage 4s Dated June 3, 1890 INIaturing April 1. 1990 Interest payable April 1 and October 1 at the Central Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $15,000 per mile Outstanding $'2,469,000 Per mile . . 14,700 Security: The above bonds are secured bj' direct first mortgage or by first collateral mortgage on 167 miles of railroad and bridge. They are secured by a first mortgage on 167 miles of line, includ- ing the 94 miles from Gauley Bridge, W. Va., to Point Pleasant, W. Va., and the 57 miles from Corning to Hobson, O. They are secured by collateral consisting of $1,000,000 Point Pleas- ant Bridge First Mortgage Bonds (the entire issue) and $998,000 of the $1,000,000 capital stock. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Toledo & Ohio Central Railway (Company by endorsement. Trustee: Central Trust Company, New York. The Kanawha & Michigan Railway Company was chartered April 23, 1890, under the laws of Ohio and West Virginia as successor to the Kanawha & Ohio Railway Company. Control of the road, which had been held by the Hocking Valley Railroad Company, was sold in March, 1910, to the Ches- [367] apeake & Ohio Railway and the Lake Shore & Michigan Southern Railway Companies, and these two roads now own jointly practically the entire outstanding capital stock. These bonds sold in 1902 on a 4.05 to 4.25 basis 1903 4.10 4.55 1904 4.15 4.40 1905 4.02 4.20 1906 4.02 4.20 1907 4.15 5.05 1908 4.25 4.80 1909 4.20 4.40 1910 4.25 4.45 1911 4.35 4.45 1912 4.30 4.40 These bonds are considered a legal investment for savings banks in Maine. KANAWHA & MICHIGAN RAILWAY Second Mortgage 5s Dated July 1, 1907 Maturing July 1, 1927 Interest payable January 1 and July 1 at the ofBce of J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 14,800 Security: The above bonds are secured by a second mortgage on the 167 miles of road and bridge covered as a first lien by the Kanawha & Michigan First 4s of 1990. Redemption: The company may pay off any or all of these bonds on any interest day at par and accrued interest, on three months' notice. In case less than the whole number of bonds are to be re- deemed, the trustee shall select by lot the numbers of those to be paid off. Trustee: Standard Trust Company, New York. For history of the Kanawha & Michigan Railway Company, see page 367. These bonds were quoted in 1909 on a 5.45 basis (bid) These bonds sold in 1910 5.05 to 5.35 basis 1911 5.10 5.35 1912 5.05 5.25 Dated July 1, 1912 Authorized $1,200,000 KANAWHA & MICHIGAN RAILWAY Equipment Trust 434% Gold Notes Maturing $60,000 each January 1 and July 1 until July 1, 1922. Interest payable January 1 and July 1 at New York. Coupon notes of $1,000. Outstanding $1,200,000 Security : The above notes are a direct obligation of the company and are secured by agreement covering 1,000 steel drop bottom coal cars, 100 Hart convertible steel underframe coal and ballast cars, 3 steel underframe passenger cars, 2 steel underframe baggage and mail cars, 10 consoli- dation freight locomotives and 2 switching locomotives. This equipment cost $1,333,400, for which the company paid $133,400 in cash and issued these notes for the remainder. Title to the equipment remains with the Union Trust Company, Trustee, until the notes are paid. Redemption : These notes are redeemable on any interest date on 30 days' notice at par and interest. Trustee: Union Trust Company, New York. For history of the Kanawha & Michigan Railway Company, see page 367. [ 369 ] LOUISVILLE & NASHVILLE RAILROAD COMPANY LOUISVILLE & NASHVILLE RAILROAD COMPANY HISTORY The Louisville & Nashville Railroad was chartered on March 5, 1850, under the laws of the State of Kentucky. The plan of construction called for a line from Louisville, the tobacco center of Kentucky, to Nashville, Tennessee. After some delay, the road was constructed and finally opened to traffic in November, 1859. The company paid its first dividend — 6% — in 1864. During the reconstruction period in the South, and up to the panic of 1873, the road earned and paid substantial dividends on its out- standing stock. About 1870 it began a policy of extension, which has been kept up even to the present day. As a result, the mileage owned, leased and operated has increased from less than 400 to more than 4,700 miles, while the total mileage of the system, including controlled lines, amounts to nearly 8,000 miles. By far the most important acquisition came in 1902, when the company purchased control of the Atlanta, Knoxville & Northern Railway, and the Chicago, Indianapolis & Louisville Railway. All the capital stock of the former was acquired in April of that year. A majority of the capital stock of the latter was purchased jointly by the Louisville & Nashville Railroad and the Southern Rail- way Companies. This purchase was financed through the issuance of joint bonds, of which there were outstanding on June 30, 1911, $11,827,000, secured by $3,873,400 preferred stock and $9,796,900 common stock of the Chicago, Indianapolis & Louisville Railway Company. It was in November, 1902, that control of the Louisville & Nashville Railroad was acquired by the Atlantic Coast Line Railroad Company through the purchase of $30,600,000, being a majority of the capital stock, paying therefor $10,000,000 in cash, $35,000,000 in 4% Fifty-year Collateral Trust Bonds and $5,000,000 in its own conmion stock. The Louisville & Nashville Railroad Company owns $7,177,600, or 72%, of the capital stock of the Nashville, Chattanooga & St. Louis Railway, a system operating 1,230 miles; also a majority of the stock of the Louisville, Henderson & St. Louis Raih-oad, purchased in 1905. The Louisville & Nashville Railroad and the Atlantic Coast Line Railroad Companies have leased jointly the Georgia Railroad Company and its dependencies, operating a total of 571 miles. Besides this, the company owns one-half the capital stocks of the Central Transfer Railway & Storage Company, and the Woodstock & Blockton Railway Company, and the entire capital stock of the Madisonville, Hartford & Eastern Railroad. In June, 1909, the company bought the entire capital stock and the bonds of the Louisville & Atlantic Railroad Company, operating 101 miles. In November, 1909, the legal title to the property rights, privileges, immunities and fran- chises had been conveyed to the Louisville & Nashville Railroad Company, and from that time the road has been operated as a part of its system. On July 1, 1911, the property of the Athens & Tellico Railway Company was conveyed to the Louisville & Nashville Railroad Company and operated as a part of its system. This company had been organized in March, 1910, to take over the property and franchises of the Tellico Railway Company and operated it under its own organization until June 30, 1911. During the fiscal year of 1912 the Louisville & Nashville acquired all the capital stock of the Lexington & Eastern Railway Company, which owns a line from Lexington to Quicksand, Kentucky, [ 373 ] a distance of 96 miles. This company is constructing a line from Dumont to Neon, Kentucky, a distance of 97 miles, with capital advanced by the Louisville & Nashville Railroad Company. The Louisville & Nashville Railroad and the St. Louis & San Francisco Railroad Companies have each acquired an equal number of shares of the preferred and common stock of the New Orleans, Mobile & Chicago Railway Company, constituting a majority of the outstanding stock of the same, and under an agreement dated November 15, 1911, between the two companies, the operation of the road will be continued as a separate organization. The property of the Louisville & Nashville Terminal Company is leased jointly by the Louis- ville & Nashville Railroad Company and the Nashville, Chattanooga & St. Louis Railway Company. A new terminal at Memi)his was put into operation April 1, 1912, for the joint use of the above and also the Southern Railway Company, the St. Louis, Iron Mountain, Southern Railway Com- pany, and the St. Louis Southwestern Railway Company. PROPERTY Li the annual report of the company for the fiscal year ending June 30, 1912, the following statement of mileage is given: Miles owned in fee 3,538.63 Miles operated as owner of entire capital stock 632.05 Miles operated under lease 118.97 Miles operated for owners 221.88 Miles operated under trackage arrangements 228.96 Total miles owned and operated 4,740.49 The average miles operated by the company were 4,709.93. The entire system, including controlled lines, embraced a total mileage of 7,947.83 miles. The Louisville & Nashville Railroad System extends from the commercial cities of Cincinnati, Louisville, Evansville and St. Louis on the north, southerly across the States of Kentucky, Ten- nessee, Alabama and Georgia, to New Orleans, Mobile and Pensacola. It taps all the important points of the Central South. Its controlled lines extend into Chicago and Indianapolis on the north, and Atlanta, Augusta and Macon, Ga., on the east. The populations of the States served by the Louisville & Nashville Railroad have increased from 6,839,000 in 1890 to 9,162,500 in 1910. Following is a table showing the equipment of the Louisville & Nashville Railroad, and operated lines, for the years 1907 to 1912 inclusive: Class 1907 1908 1909 1910 1911 1912 Locomotives . . 865 896 899 928 971 998 Passenger cars . 559 572 573 590 611 620 Freight cars . , 39,528 40,589 41,720 43,019 44,564 44,727 Work cars . . 1,452 1,503 1,421 1,429 1,648 1,884 [374 ] CAPITALIZATION The capitalization of the Louisville & Nashville Railroad Comiiany for the fiscal year ending June 30, 1912, was approximately as follows: Capital stock $60,000,000 Funded debt 155,220,157 Nominal capital $215,220,157 Rentals capitalized @ 5% 3,347,600 Gross capitalization $218,567,757 Securities owned 27,744,444 Net capitalization $190,823,313 Net capital per mile operated $40,514 Average miles operated 4,709.93 Net income to net capital 9-9% Fixed charges to net income 49.7% Margin of safety 50.3% In the foregoing table the funded debt includes all the mortgage and collateral trust bonds of the company, $19,117,000 of which are in the treasury of the company, together with $24,657 of plain bonds, debentures and notes — obligations of the company. The rentals, which have been capitalized at 5%, are the guaranteed dividends on the stock of the Nashville & Decatur Railroad and additions and betterments on the same. The Louisville & Nashville's net capitalization per mile operated, and the ratio of net income to net capital, as given above, compare favorably with the Illinois Central's net capitalization per mile of $53,024, upon which it earned 6.3%, and that of the Atlantic Coast Line Railroad, $34,303, with recorded earnings of 9.1%. The averages of these three similar properties for ten years ending June 30, 1912, are as follows: Net capital Net income per mile to net capital Louisville & Nashville $39,660 9.1% Illinois Central 49,035 8.9 Atlantic Coast Line (ending 1911) 30,185 8.5 Since 1900 the Louisville & Nashville Railroad has increased its capitalization nearly $47,000,000, or 28%. On the other hand, earnings have increased, in that time, $28,500,000, or over 100%. The following table shows these increases: Year Capital stock Funded debt Total Gross revenue 1900 .... $55,000,000 $113,264,660 $168,264,660 $27,742,379 1912 .... 60,000,000 155,220,157 215,220,157 56,211,788 Increase $46,955,497 $28,469,409 Per cent of increase . . . 28% 102% To offset its capitalization, in 1900 the company reported capital assets of approximately $153,000,000, of which $115,000,000 represented cost of road and equipment. In 1912 these capital assets had increased to $216,000,000, of which $177,000,000 was the amount at which property and [375 ] equipment was carried on the balance sheet. This is a gain of capital assets of approximately $63,000,000. At a meeting of the stockholders of the company on October 2, 1912, the directors were given authority to issue $12,000,000 additional capital stock at par. Every stockholder has the privilege of subscribing to an additional amount of shares equal to 20% of his holdings. CHARACTER OF TRAFFIC The Louisville & Nashville Railroad Company gives no account of its traffic tonnage. It is a well-known fact, however, that cotton is the principal commodity carried. The road also taps large mineral deposits in Alabama and should have considerable tonnage from that source. It is not unreasonable to suppose that the Louisville & Nashville gets its share of the grain products, especially since it touches important Gulf ports. This should be especially true with the opening of the Panama Canal. Based on the earnings of the company, nearly three-quarters of its gross business is freight. Following are some of the more salient freight statistics of the Louisville & Nashville for the years 1907 to 1912 inclusive: Year Freight density 1907 1,020,735 1908 924,686 1909 968,785 1910 1,124,001 1911 1,108,008 1912 1,098,169 In 1908 the company's freight business decreased, and with a decline in the average rate, earn- ings fell nearly $4,000,000. Since that time, however, the road's freight density (except in 1912) and earnings have shown satisfactory increases. Efficiency in operation is shown by the healthy in- crease in the average number of revenue tons carried per train. Every train load averaged 54 tons heavier in 1912 than in 1907, a gain of 23%. For the decade ending 1912, the Louisville & Nashville's average train load has been 249 tons. Although not as high as the average figure of the Illinois Central. 340 tons, it was considerably higher than that of the Atlantic Coast Line Railroad, which reported an average for the decade of but 186 tons. Fully one-quarter of the company's business is passenger. With the exception of 1909, there has been a steady increase since 1907 in the number of passengers carried one mile per mile of road, and also in passenger earnings, even in the face of declining rates. Year Passenger Number of Passenger Average rate density passengers earnings per passenger per train per mile 1907 100,509 45 $12,399,326 $.0236 1908 102,385 47 12,725,556 .0237 1909 98,719 45 12,335,095 .0232 1910 104,747 47 13,308,948 .0226 1911 111,270 48 14,201,524 .0227 1912 113,052 49 14,806,088 .0229 Passenger earnings in 1907 were the largest the company had ever reported, yet during the fiscal year 1912 the number of passengers ca,rried one mile per mile of road showed an increase of [ 376 ] Train load tons Freight earnings Average rate per ton per mile 231 $35,235,787 $.0080 234 31,334,940 .0078 267 32,465,969 .0076 278 38,421,779 .0075 275 39,066,033 .0077 285 40,601,288 .0079 13% over tlie figure of 1907. The number of passengers carried per train averaged 10% higher, while earnings were nearly 20% gi-eater in spite of a decline in the average rate per passenger per mile from 2.36 cents to 2.29 cents. EARNINGS The earnings of the Louisville & Nashville, especially in 1910 and 1912, showed substantial gains. Following are the gross and net revenues of the company, also based on the average miles operated, for the years 1907 to 1912 inclusive: Year Average Gross Per mile Net Per mile Operating miles earnings earnings ratio operated 1907 . , 4,306 $48,263,945 $11,207 $12,482,642 $2,898 74.14% 1908 . . 4,348 44,620,281 10,262 11,025,990 2,537 75.29 1909 . . 4,393 45,425,891 10,340 15,798,392 3,597 65.22 1910 . . 4,554 52,433,382 11,512 17,447,803 3,831 66.72 1911 . . 4,598 53,993,741 11,741 15,513,918 3,373 71.27 1912 . . . 4,710 56,211,788 11,934 16,585,461 3,521 70.19 Gross revenues fell off over $3,600,000 in 1908 from the record figures of 1907, due to the general business depression. A curtailment of expense followed this decline in 1908 and 1909, so that the company, in the latter year, was able to show net earnings of nearly $15,500,000 as compared with $11,025,000 in 1908. The company's operating ratio in 1909 declined 10%, to 65.22%, due to an increase in gross revenue of $800,000 and a decrease in maintenance charges of $2,200,000 and in transportation costs of $1,750,000. In 1910, with the return of better times in the South, gross revenues climbed to over $52,000,000, while operating expenses were increased but sufficiently to cover the cost of handling the additional business received. This enabled the company to show a record net revenue of nearly $17,500,000 for the j'car. Increasing costs of transportation during 1911, however, cut net earnings for that year considerably. This was due in a considerable extent to a higher wage scale which went into effect early in 1911. As a result the company's ratio of operating expenses to operating revenues in- creased from 66.72% in 1910 to 71.27% in 1911. MAINTENANCE During the decade ending 1912, maintenance has averaged $3,500 per mile. The average traffic density has been in the neighborhood of 1,104,750. The Illinois Central, with an average traffic density of 1,481,240, spent but slightly over $3,705 per mile during the same period, while the Atlan- tic Coast Lme Railroad, with an average density of but 384,000, since 1903, spent approximately $1,600 each year. The following amounts have been spent for maintenance of way and equipment by the Louis- ville & Nashville since 1907: Year Maintenance Total Per mile Way Equipment maintenance 1907 $8,065,898 $8,709,610 $16,775,508 $3,896 1908 6,291,108 9,020,127 15,311,235 3,520 1909 5,257,037 7,832,021 13,089,058 2,979 1910 8,172,166 8,559,104 16,731,270 3,673 1911 9,178,192 9,490,759 18,668,951 4,060 1912 8,828,755 10,071,304 18,900,059 4,013 [ 377 ] Since 1907, the Louisville & Nashville has spent $100,000,000 for maintenance alone. This is an average of $16,600,000 each year, or nearly $3,690 per mile of road in operation. ADDITIONS AND BETTERMENTS It has been the policy of the company for a number of years to make liberal outlays for additions and betterments from current income, in addition to maintenance expenditures. Since July 1, 1907, in accordance with the rulings of the Interstate Commerce Commission, the road's disbursements for additions and betterments have been charged to Property Investment Account. For the decade prior to July 1, 1907, over $17,000,000 had been charged to income and put directly back into the property. The following table shows the amounts spent since 1908 for betterments, all of which have been charged to Property Investment. Year Improvements Way Equipment 1908 $1,690,468 1909 866,546 1910 1,890,462 $1,038,281 1911 2,365,291 2,758,795 1912 4,819,586 1,664,199 $11,632,353 $5,461,275 11,632,353 Total $17,093,628 DIVIDENDS The Louisville & Nashville Railroad Company has paid from the date of its organization to and including August, 1912, 63 cash dividends aggregating 189^/5%, or $61,237,962. The follow- ing dividends have been paid since 1880: 1880 8% 100% (stock) 1881 6 1882 3 1888-9 5% (stock) 1890 1.1 4.9 (stock) 1891 5 1892 i'A 1893 4 Year Rate 1894-8 1899 3.5% 1900 4 1901-4 5 1905-7 6 1908-9 5.5 1910-12 7 The company, on its balance sheet of June 30, 1912, showed a Profit and Loss of $37,095,000. Besides this, there was an appropriated surplus of $2,606,445, the two equalling 66% of the total outstanding capital stock. STATISTICS Following are the capitalization, earnings, and traffic statistics of the Louisville & Nashville Rail- road, based on the average miles operated, for the year 1900 and for the years 1905 to 1912 inclusive: [ 378 1 LOUISVILLE & NASHVILLE RAILROAD Fiscal Capital Funded Rentals Gross Ow ned Net Average Extra year stock debt @5% capital by capital miles $1,051 company operated 3,007 track 1900 $18,290 $37,667 $57,008 $17,843 $39,165 50 1905 15,082 29,886 610 46,184 8, ,220 37,964 3.820 72 190C 14,524 31,264 814 46,602 7. ,301 39,301 4.131 73 1907 13,934 31,363 727 46,024 0,904 .39,120 4.306 74 1908 13.790 31,433 734 45,903 7,470 38,493 4.348 82 1909 13,658 29,550 704 43,912 6, ,294 37,618 4,393 112 1910 13,175 34,118 655 47,948 5, ,238 42,710 4,554 1911 13,049 33,784 758 47,591 5, ,732 41,859 4,598 1912 12,738 32.955 711 46,404 5, ,890 40,514 4,710 Fiscal Gross Maintenance Transportation Net Other ToUl Fixed Surplus year operating and general operating income net charges available revenue Way Equipment expense revenue income for diWdends 1900 $9,224 $1,313 $1,239 $3,633 $3,039 $216 $3,255 $2,052 $1,203 1905 10,066 1,490 1,658 3,775 3,143 425 3,568 1,784 1,784 1906 10,411 1,583 1,886 4,019 2,923 379 3,302 1,765 1,537 1907 11,207 1,873 2,023 4,413 2,898 362 3,260 1,764 1.496 1908 10,262 1,446 2,074 4,205 2,537 304 2,841 1,825 1,016 1909 10,340 1,197 1,782 3,764 3,597 317 3,914 1,959 1,955 1910 11,512 1,794 1,879 4,008 3,831 407 4,238 1,952 2,286 1911 11,741 1,990 2,064 4.308 3,373 439 3,812 1,952 1,860 1912 11,934 1,875 2,138 4,400 3,521 517 4,038 2,009 2,029 Fiscal Dividends Other Surplus Operating Total Conducting Fixed Gross ^ Net Per cent year charges expenses maintenance transportatio n charges earnings income earned on to to gross to gross to gross to gross 1 to gross to net capital income $501 earnings earnings earnings earning s capital ; 16.2% capital 8.3% stock 1900 $702 67.06% 27.67% 39.39% 22.2*^ 6.5% 1905 941 843 68.77 31.27 37.50 17.7 21.7 9.3 11.3 1906 871 666 71.92 33.28 38.64 16.9 22.3 8.4 10.6 1907 836 660 74.14 34.74 39.40 15.7 24.3 8.3 10.7 1908 759 $389 132* 75.29 34.27 41.02 17.8 22.3 7.4 7.3 1909 751 197 1,007 65.22 28.68 36.54 18.9 23.5 10.4 14.3 1910 922 1,'364 66.72 31.87 34.85 16.9 24.0 9.9 17.3 1911 913 947 71.27 34.45 30.82 16.7 24.0 9.1 15.8 1912 891 1,138 70.49 33.63 36.86 10.8 25.7 9.9 15.9 Fiscal Train Main tenance Conducting Train Rate per mile Freight Train Freight Passenger, year mile per revenue transportation mile dens ity load to all freight earnings train mile per revenue earnings Per Per revenue ! traffic and (gross) Way Equip- train mile (i aet) passenger ton tons company ment cars 1900 $1.61 $.230 $.217 $.637 $.526 $.0231 $.0076 858,544 223 75% 24,374 1905 1.73 .256 .285 .648 .541 .0229 .0079 916,335 229 72 34,905 1906 1.72 .263 .313 .668 .476 .0243 .0080 950,325 230 73 38,457 1907 1.74 .291 .315 .686 .448 .0236 .0080 1,020,7 '35 231 73 41,539 1908 1.73 .243 .349 .708 ,430 .0237 .0078 924,686 234 70 42.664 1909 1.82 .211 .314 .062 .633 .0232 .0070 968,7 '85 267 72 43.714 1910 1.90 .295 .309 .659 .637 .0226 .0075 1,124,001 278 73 45.038 1911 1.88 .326 .337 .704 ,513 .0227 .0077 1,108,008 275 72 46.823 1912 2.00 .314 .358 .736 .592 .0229 .0079 1,098.169 285 73 47.231 * Deficit. [ 379 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Louisville & Nash- ville Railroad System, together with the bases on which they have sold during the decade ending December 31, 1912: LOUISVILLE & NASHVILLE RAILROAD Unified Mortgage 4s Dated June 2, 1890 Maturing July 1, 1940 Interest payable January 1 and July 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable in lots of $5,000. Registered bonds of $5,000. Authorized $75,000,000 Outstanding $57,871,000 Per mile . . 28,893 Provisions of Of the amount authorized, $57,871,000 are in the hands of the public as above; $5,739,000 issue: are held by the company in the treasury and sinking fund; $90,900 have been reserved for additions, etc., under restrictions; $11,282,100 have been reserved to retire prior liens and $17,000 are redeemed or drawn for payment. Security: Trustee : The above bonds are secured by a direct mortgage on 2,003.21 miles of the company's road, on lands, terminals, securities, equipment and future acquisitions. They are secured by a first mortgage on 724.71 miles; by a second mortgage on 1,122.48 miles covered by the first mortgages of the General 6s of 1930, Louisville & Nashville First 5s of 1937, Louisville, Cincinnati & Lexington General 4i^s of 1931, Henderson Bridge 6s of 1931, and the Newport & Cincinnati Bridge General i^s of 1945, and Birmingham Mineral 5s of 1937. They are further secured by a third mortgage on 156.02 miles covered by the first mortgage of the Evansville, Henderson & Nashville 6s of 1919 and by the second mortgage of the General 6s of 1930. They are also secured by deposit with the trustee of the following securities: $5,101,500 capital stock of the Nashville, Chattanooga & St. Louis Railway Company; $2,000,000 preferred stock and $1,127,400 common stock of the South & North Alabama Railway Company; $963,400 capital stock of the Owensboro & Nashville Railway Company; $19,750 Henderson Belt Railroad Company; $980,000 capital stock of the Southeast & St. Louis Railway Company. In addition, the company's report shows the following securities deposited under this indenture : $3,150,000 First 4s and $1,969,000 capital stock of the Alabama Mineral Railroad Company; $1,500,000 preferred and $985,000 common stock of the Louisville, Cincinnati & Lexington Railway Company; $2,412,600 capital stock of the Birmingham Mineral Railroad Company; $501,000 capital stock of the Henderson Bridge Company; $2,939,700 capital stock of the Mobile & Montgomery Railway Company; $3,985,000 capital stock of the New Orleans, Mobile & Texas Railway Company; $615,000 capital stock of the Nashville, Florence & Shef- field Railway Company; $285,000 capital stock of the Pensacola Railroad Company; $100,000 capital stock of the Louisville Transfer Company; $589,256 capital stock of the Shelby ville Railroad Company. Central Trust Company, New York. 1902 on a 3.80 to 4.00 basis 1903 3.90 4.125 1904 3.75 4.10 1905 3.70 3.875 1906 3.75 4.10 1907 3.90 4.45 1908 3.85 4.30 1909 3.875 4.10 1910 3.95 4.20 1911 4.05 4.10 1912 4.02 4.20 These bonds are considered a legal investment for savings banks in New England. [ 382 ] LOUISVILLE & NASHVILLE RAILROAD Evansville, Henderson & Nashville Division First Mortgage Sinking Fund 6s Dated December G, 1879 Maturing December 1, 1919 Interest jjayahle June 1 and December 1 at 71 Broadway, New York. Couj)on bonds of $1,000, registerable as to principal. Authorized $2,400,000 Outstanding $1,080,000 Per mile . . 6,900 $1,320,000 of this issue have been retired by the sinking fund. They are redeemable, $110,000 annually until 1914 and $150,000 annually from 1915 to 1919, at 110. Security: The above bonds are secured by a first mortgage on 156.02 miles of the company's line, in- cluding the 145.02 miles from Henderson, Ky., to Nashville, Tenn. Equity: These bonds are prior in lien to the General 6s of 1920; also to the Unified 4s of 1940, a sufficient number of which have been reserved to jirovide for the retirement of this issue. Trustee: Central Trust Company, New York. These bonds sold in 1902 on a 4.05 to 4.95 basis 1903 4.70 4.95 1904 4.55 4.90 1905 4.38 4.00 1906 4.95 1907 4.50 4.80 1909 4.55 4.02 1910 4.00 4.45 1911 4.10 4.35 1912 4.125 4.,30 These bonds are considered a legal investment for savings hanks in New England. LOUISVILLE & NASHVILLE RAILROAD General Mortgage Sinking Fund 6s Dated June 1, 1880 Maturing June 1, 1930 Interest payable June 1 and December 1, 71 Broadwaj^ New York. Coupon bonds of $1,000, registerable as to principal. Authorized $20,000,000 Outstanding $4,689,000 Per mile . . 5,830 Provisions of Although these bonds were authorized to the amount of $20,000,000, the terms of the Unified issue: Mortgage, dated June 1, 1890, limited this to $11,900,000, the amount then outstanding. $7,888,000 have been retired by the sinking fund, $20,000 are in the treasury of the com])any and $4,689,000 are outstanding as above. [ 383 ] Sinking fund: By the terms of the sinking fund, which became operative June 1, 1885, bonds are redeemable annually at 110 to an amount equal to ljo% of the total issued, the bonds to be held in the sinking fund and interest thereon added to the fund. Security : Equity : Trustee: These bonds are secured by a direct mortgage on 803.54 miles of the company's line; also upon equipment, etc. They are secured by a first mortgage on 647.52 miles, including the road from Louisville, Ky., to Edgeville Junction, Tenn., 176.12 miles; from Memphis Jimction, Ky., to Memphis, Tenn., 259.13 miles, and from Lebanon Junction to Livingston, Ky., 110.17 miles. They are also secured by a second mortgage on the 156.02 miles covered by the first mortgage of the Evansville, Henderson & Nashville Division 6s of 1919. The above issue is prior in lien to the Unified 4s of 1940, a sufiicient number of which have been reserved to provide for the retirement of these bonds. Central Trust Company, New York. These bonds sold in 1902 on a 4.60 to 4.95 basis 1903 4.80 5.10 1904 4.55 4.95 1905 4.50 4.70 1906 4.60 4.95 1907 4.75 5.10 1908 4.55 5.05 1909 4.70 4.80 1910 4.70 5.00 1911 4.70 5.00 1912 4.55 4.95 These bonds are considered a legal investment for savings banks in New England. LOUISVILLE & NASHVILLE RAILROAD First Mortgage Fifty-year 5s Dated April 30, 1887 Maturing May 1, 1937 Interest payable May 1 and November 1 at 71 Broadway, New York. Coupon bonds of $1,000, rcgisterable as to principal. Authorized $3,500,000 Outstanding $1,749,000 Per mile . . 9,109 Provisions of Although these bonds were authorized to the amount of $3,500,000, the terms of the Unified issue: Mortgage, dated June 1, 1890, limited this to $1,764,000. Of this amount $15,000 are held in the company's treasury and $1,749,000 are in the hands of the pubUc. Security: These bonds are secured by a first mortgage on 192.20 miles of the company's line, including the 117.44 miles from Corbin, Ky., to Norton, Va., and also upon future acquisitions. Equity: The above bonds are prior in lien to the Unified Mortgage 4s of 1940, a sufficient number of which have been reserved to provide for the retirement of the issue. [384 ] Trustee: United States Trust Company, New York. The above bonds sold in 1902 on a 4.05 to 4.15 basis 1903 4.30 4.40 1904 4.05 4.20 1905 3.90 4.05 1906 3.80 4.15 1907 4.00 4.40 1908 4.35 1909 4.00 4.15 1910 4.12 4.27 1911 4.20 1912 4.20 4.30 These bonds are considered a legal investment for savings banks in New Englaufl. NEWPORT & CINCINNATI BRIDGE COMPANY General Mortgage 4)'2S Dated July 1, 1895 Maturing July 1, 1945 Interest payable January 1 and July 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,500,000 Outstanding $1,400,000 Security: The above bonds are secured by a first mortgage on a bridge, .73 miles in length, crossing the Ohio River from Cincinnati, O., to Newport, Ky.; also by a mortgage on realty, approaches and future acquisitions. Sinking fund : These bonds are to be purchased at par by a fund obtained by yearly instalments from net earnings equal to 1% of the then outstanding bonds. If bonds are not obtainable at par, the amount lapses into the treasury of the company. These bonds have been ASSUMED by the Louisville & Nashville Railroad Company, and are GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Com- pany by endorsement. Equity: The above issue is prior in lien to the Louisville & Nashville Unified 4s of 1940. Trustee: Farmers' Loan & Trust Company, New York. The Newport & Cincinnati Bridge Company was chartered under the laws of the States of Ohio and Kentucky in 1868. The bridge was opened for traffic in 1872. It was rebuilt and put into oper- ation in May, 1897. It was operated as a part of the Pennsylvania Company until April, 1904, when it passed into the control of the Louisville & Nashville Railroad Company through purchase of the entire capital stock. [385 ] These bonds sold in 1904 on a 3.90 to 4.10 basis 1905 4.05 1909 4.45 (bid) 1910 4.60 (bid) 1911 4.45 (bid) December, 1912 4.45 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. LOUISVILLE & NASHVILLE RAILROAD Louisville, Cincinnati & Lexington Railway Company General Mortgage 4i^s Dated November 1, 1881 Matnring November 1, 1931 Interest payable May 1 and November 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $7,000,000 Outstanding $3,258,000 Per mile . . 18,406 Provisions of The authorized issue was originally $7,000,000 at 6%, but by an agreement of December 1, issue: 1896, the issue was limited to $3,258,000 and the interest rate was reduced to 4J^%. Security: The above bonds are secured by a first mortgage on 176.70 miles of the company's line, includ- ing the 109.70 miles from I^ouisville to Newport, Ky., and the 67 miles from La Grange to Lexington, Ky. These bonds have been ASSUMED by the Louisville & Nashville Railroad Companj'. Equity: These bonds are prior in lien to the Unified 4s of 1940, a sufficient number of which have been reserved to provide for the retirement of this issue. Trustee: Mercantile Trust Company, New York. On October 1, 1877, the Louisville, Cincinnati & Lexington Railway Company succeeded the Louisville, Cincinnati & Lexington Railroad Company, which was sold under foreclosure. The latter road was the result of a consolidation on September 11, 1869, of the Louisville & Frankfort Railroad and the Lexington & Frankfort Railroad Companies. In 1881 the property of the Louisville, Cincin- nati & Lexington Railway Company was purchased by the Louisville & Nashville Railroad Com- pany, and is now operated as an integral part of that system. These bonds sold in 1902 on a 3.95 basis 1903 4.00 1904 4.15 1905 3.95 1908 4.20 to 4.25 1909 4.00 1910 4.05 4.25 1911 4.10 4.20 1912 4.125 4.20 These bonds are considered a legal investment for savings banks in New England. [ 386 ] HENDERSON BRIDGE COMPANY First Mortgage 6s Dated September 1, 1881 Maturing September 1, 1931 Interest payable March 1 and September 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Outstanding $1,126,000 above, $874,000 are held in the company's Provisions of In addition to the $1,126,000 outstanding issue: treasury. Sinking fund: Security : Equity: Trustee : "By a supplemental indenture dated February 27, 1884, it is provided that the Company pay to the trustees $20,000 in bonds at par, or $21,000 in cash, on August 1, 1885, and yearly thereafter until 1894, and on August 1, 1895, and yearly thereafter $8,000 in bonds, or $8,400 in cash. Which amounts shall be applied, first, to extraordinary repairs, if any, and next to the redemption of these bonds at 105, to be drawn by lot. The bonds redeemed shall be held uncancelled and the interest collected; and, if it be necessary to rebuild or repair some extraordinary damage, the trustees shall re-issue said bonds." The above bonds are secured by a first mortgage on the bridge across the Ohio River at Hen- derson, Ky., and the connecting railway and approaches to connect with the Southeast & St. Louis Railway, 10.03 miles; also on all other property of the company. A yearly income from traffic of $200,000 for 99 years is guaranteed by the Louisville & Nash- ville Railroad, the Southeast & St. Louis Railway, the Evansville & Terre Haute Railroad, the Louisville, Evansville & St. Louis Railway and the Peoria, Decatur & Evansville Railway Companies. This issue is prior in lien to the Unified 4s of 1940. Central Trust Company of New York. The Henderson Bridge & Railroad Company was organized muler the laws of Kentucky, Sep- tember 21, 1880, and the bridge was opened for traffic July 30, 1885. It was operated by the Louis- ville & Nashville Railroad Company, which, with other connecting roads, guaranteed to the Bridge Company tolls amounting to $200,000 a year. Control of the entire capital stock of the company was procured by the Louisville & Nashville, $501,000 of which is deposited as collateral to the Unified Mortgage 4s of 1940. The legal title to the property, rights, privileges and franchises of the Hen- derson Bridge & Railroad Company was conveyed to the Louisville & Nashville Railroad Com- pany by deed dated June 30, 1906. These bonds were quoted in 1906 on a 5.375 basis (bid) 1909 1910 1911 December, 1912 5.25 5.75 5.50 5.55 These bonds are considered a legal investment for savings banks in Rhode Island. [ 387 ] LOUISVILLE & NASHVILLE RAILROAD New Orleans & Mobile Division First Mortgage 6s Dated May 8, 1880 Maturing January 1, 1930 Interest payable January 1 and July 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $4,993,000 Per mile . . 35,664 In addition to the amibunt outstanding, as above, $7,000 are held by the trustee. Security: The above bonds are secured by a first mortgage on the company's line from New Orleans to Mobile, 141.17 miles; also on lands, buildings, rolling stock, franchises, incomes, and creo- sote works at West Pascagoula, Miss. They are also secured by a first collateral lien on 7,118 shares of a total issue of 7,484 shares of capital stock of the Pontchartrain Railroad Company. Equity: This issue is prior in lien to the New Orleans & Mobile Division Second 6s of 1930. Trustee: Farmers' Loan & Trust Company, New York. The New Orleans & Mobile Division of the Louisville & Nashville Railroad was chartered in Alabama in November, 1866, as the New Orleans, Mobile & Texas Railroad. On July 1, 1874, interest on the first mortgage bonds was defaulted and the road was placed in the hands of the trus- tees of that mortgage. The New Orleans, Mobile & Texas Railroad was sold under foreclosure, April 24, 1880, and reorganized as the New Orleans & Mobile Railroad. The following month the road was leased for 50 years to the Louisville & Nashville Railroad Company, which owns $3,985,000 of the $4,000,000 capital stock. On October 5, 1881, its property was convej^ed to the Louisville & Nashville Railroad Company. These bonds sold in 1902 on a 4.15 to 4.25 basis 1903 4.20 4.625 1904 4.05 4.45 1905 3.95 4.15 1906 4.00 4.20 1907 4.25 4.50 1908 4.45 4.80 1909 4.15 4.20 1910 4.125 4.375 1911 4.25 4.50 1912 4.30 4.37 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. LOUISVILLE & NASHVILLE RAILROAD New Orleans & Mobile Division Second Mortgage 6s Dated October 5, 1881 Maturing January 1, 1930 Interest payable January 1 and July 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,000,000 , Outstanding $1,000,000 Per mile . . 7,142 Security: These bonds are secured by a second mortgage on the property covered by the New Orleans & Mobile Division First 6s of 1930, namely, on the company's line from New Orleans to Mobile, 140.36 miles; on lands, buildings, rolling stock, franchises, incomes, creosote works at West Pascagoula, and on 7,118 shares of capital stock of the Pontchartrain Railroad Company. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1902 on a 4.45 to 4.60 basis 1903 4.50 1904 4.40 1906 4.45 1909 4.50 1910 4.,55 1911 4.55 1912 4.55 The above bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. LOUISVILLE & NASHVILLE RAILROAD Pensacola Division First Mortgage 6s Dated March 1, 1880 Maturing March 1, 1920 Interest payable March 1 and September 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $600,000 Outstanding $274,000 Per mile . . 6,100 Provisions of In addition to the $274,000 outstanding, $6,000 are in the treasury of the company and $320,000 issue: have been redeemed or drawn for payment by the sinking fund. Sinking fund : Under the provisions of this fund the company agrees to pay the trustees $5,000 annually from 1885 to 1890; $8,000 from 1891 to 1895; $10,000 from 1896 to 1900; $15,000 from 1901 to 1905; $20,000 from 1906 to 1910; $25,000 from 1911 to 1915; and $36,000 from 1916 to 1920 [ 389 ] for the purchase of these bonds at not exceeding 105. If bonds cannot be obtained at the price, they are to be drawn by lot, and all bonds so redeemed are to be reported in the an- nual report to the stockholders. Security: The above bonds are secured by a first mortgage on the company's line from Pensacola to Flomaton (a junction with the Mobile & Montgomery Railway), 44.64 miles; also on all lands used in connection with said road, buildings, rolling stock and franchises. Trustee: Farmers' Loan & Trust Company, New York. These bonds sold in 1902 on a 4.65 to 4.75 basis 1905 4.70 1906 5.25 1909 5.15 1910 4.70 5.30 1911 5.20 mber, 1912 5.10 (bid) The above bonds arc considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. LOUISVILLE & NASHVILLE RAILROAD Mobile & Montgomery Railway First Mortgage 43^^s Dated September 2, 1895 Maturing September 1, 1945 Interest payable March 1 and September 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $4,000,000 Per mile . . 22,471 Provisions of $1,000,000 of the amount authorized is reserved for extensions, improvements, etc. issue: Security: These bonds are secured i>y a first mortgage on the company's line from Montgomery to Mobile, Ala., a distance of 178.49 niiles; also on lands, buildings, rolling stock, franchises and future acquisitions. The bonds are a JOINT OBLIGATION of the Louisville & Nashville Railroad and the Mobile & Montgomery Railway Companies. Trustee: Central Trust Company, New York. The Mobile & Montgomery Railroad Comjjany was formed in 1868 as a consolidation of the Mo- bile & Great Northern and the Alabama & Florida Railway Companies. It was purchased by the bondholders and reorganized in 1874 as the Mobile & Montgomery Railway Company. In 1881 [ 390 ] tlic Louisville & Nashville Railroad Company leased the property for 20 jears, the surplus income to revert to the lessee. In December, 1900, the road was deeded to the Louisville & Nashville Railroad Company, which owns practically the entire capital stock. These bonds sold in 1902 on a 4.00 basis 1903 4.12 to 4.15 1904 4.05 4.20 1905 4.00 4.10 1906 4.00 4.10 1908 4.35 4.65 1909 4.22 (bid) 1910 4.20 4.37 1911 4.27 (bid) 1912 4.25 4.30 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. NASHVILLE, FLORENCE & SHEFFIELD RAILWAY First Mortgage 5s Dated August 1, 1877 Maturing August 1, 1937 Interest payable February 1 and August 1 at 71 Broadway, New York. Coupon bonds of $1,000. Authorized $2,500,000 Outstanding $1,996,000 Per mile . . 19,100 Provisions of The above bonds are issuable at not exceeding $20,000 per mile, and in addition to the amount issue: now outstanding, $100,000 are held in the treasury of the company, and $404,000 are still to be issued. Security: These bonds are secured by a first lien on 104.83 miles of the company's line, including the road from Columbia, Tenn., to Sheffield, Ala., 82.13 miles; also on all lands, buildings, rolling stock and franchises, now owned or hereafter acquired, excepting the bridge over the Tennessee River. These bonds ha\e been ASSUMED by the Louisville & Nashville Railroad Company. Trustee: Central Trust Company, New York. The Nashville, Florence & Sheffield Railway was incorporated May 16, 1887, as a consolidation of the NashvUle & Florence Railroad and the Tennessee & Alabama Railroad Companies. On April 10, 1900, the road was purchased at foreclosure sale by the Louisville & Nashville Railroad Company, subject to the payment of $"2,096,000 outstanding First Mortgage 5s, which were secured on the road. The road now forms a part of the Louisville & Nashville Railroad Company, which owns the entire capital stock. [ 391 ] These bonds sold in 1902 on a 4.20 b asis 1903 4.20 to 4.62 basis 1904 4.10 4.15 1905 4.125 4.20 1906 4.00 4.35 1907 4.20 1908 4.20 4.375 1909 4.05 4.25 1910 4.20 4.60 1911 4.20 4.45 1912 4.35 4.45 Tliese bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. LOUISVILLE & NASHVILLE RAILROAD Paducah & Memphis Division First Mortgage 4s Dated February 1, 1896 Maturing February 1, 1946 Interest payable February 1 and August 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $4,619,000 Per mile . . 18,185 Provisions of These bonds were authorized to the amount of $5,000,000, $3,800,000 on account of the pur- issue: chase price of the property and $1,200,000 to be issued for additional rolling stock, additions and improvements. In addition to the $4,619,000 in the hands of the public, $217,000 are held in the treasury of the company, and $164,000 are still to be issued. Security: The above bonds are secured by a first mortgage on 254.20 miles of the company's line, includ- ing the road from Paducah, Ky., to Lexington, Tenn., and from Memphis to Perry ville, Tenn.; also on all lands, buildings, rolling stock and franchises, now o^^^led or hereafter acquired for use in connection with this line of road; also all incomes. Trustee: Manhattan Trust Company, New York. The Paducah & Memphis Division of the Louisville & Nashville Railroad Company comprises the mileage in operation of the old Paducah, Tennessee & Alabama Railroad and the Tennessee Midland Railway Companies, which were purchased in 1895 by the Louisville & Nashville Railroad Company. Their operation was assigned to the Nashville, Chattanooga & St. Louis Railway Com- pany as of January 1, 1896, for 99 years, at a rental equalling 5% of the purchase price of the property and an additional rental of 5% of the costs of additions, betterments and equipment. These bonds were quoted in 1909 on a 4.20 basis (bid) They sold in 1910 on a 4.25 basis 1911 4.20 to 4.27 basis 1912 4.22 4.37 These bonds are considered a legal investment for savings banks in Maine. [ 392 ] PENSACOLA & ATLANTIC RAILROAD First Mortgage 6s Dated August 1, 1881 Maturing August 1, 1921 Interest payable February 1 and August 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $3,000,000 Outstanding $1,873,000 Per mile . . 11,600 Provisions of Of the amount authorized, $1,873,000 are in the hands of the public as above, and $1,127,000 issue: have been redeemed or drawn for payment. Security: The above bonds are secured by a first mortgage on the company's line from Pensacola, Fla., to River Junction (a junction with the Jacksonville, Pensacola & Mobile Railroad), 160.47 miles; also on all property to be used in connection therewith, and all franchises pertaining to the road; on buildings, rolling stock, machinery, material, future acquisitions and land, but not including any land grants not used in the operation of the road. These bonds have been ASSUMED by the Louisville & Nashville Railroad Company. Sinking fund: An amount equal to liV% of bonds issued is to be applied to the purchase of these bonds at 110. Bonds so purchased are to be kept alive in the fund and the interest to be added to the annual amount. Bonds are to be drawn by lot for the sinking fund. The Pensacola & Atlantic Railroad Company was chartered March 4, 1881, and was com- pleted in 1883. In 1885 the Louisville & Nashville Railroad Company undertook the operation of the road, and on I\Iay 4, 1891, bought it at foreclosure sale for the protection of its own interests therein, as it was a large creditor of the Pensacola & Atlantic. These bonds sold in 1909 on a 4.80 to 5.00 basis 1910 4.75 1911 4.70 (bid) 1912 4.375 to 4.60 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 393 ] LOUISVILLE & NASHVILLE RAILROAD Southeast & St. Louis Division First Mortgage 6s. Second Mortgage 3s Dated January 27, 1881 Maturing (6s) March 1, 1921 (3.s) March 1, 1980 Interest i)ayable March 1 and September 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized ((is) $3,500,000 Outstanding (6s) $3,500,000 (3s) $3,000,000 Per mile .... 16,746 (3s) $2,998,000 14,344 Security: The above bonds are secured, in order of their priority, by a first mortgage and a second mort- gage respectively on 208.74 miles of the Southeast & St. Louis Railway, including the road from East St. Ix)uis to Evansville, III., 162 miles; also on lands, buildings, rolling stock, fran- chises and incomes. These bonds have been ASSUMED by the Louisville & Nashville Railroad Company. The Southeast & St. Louis Railway Company resulted from the reorganization of the St. Ix)uis & Southeustern Railway Company in 1880. The latter was formed in 1872 as the consolidation of the St. Louis & Southeastern Railroad, the Evansville, Henderson & Nashville Railroad, and the Edge- field & Kentucky Railroad Companies, but upon default of its interest payments in November, 1874, it was placed in tlie hands of receivers, who operated it until the Southeast & St. Louis Rail- way Company took it over. By an indenture dated January 27, 1881, the Southeast & St. Louis Railway Company leased its property to the Louisville & Nashville Railroad Company for 49 years at an annual rental of 35% of its gross earnings, or an amount at least equivalent to all taxes and interest on the com- pany's bonds. Of the $1,000,000 capital stock of the Southeast & St. Louis Railway Company, $980,000 is held by the trustees of the Unified 4s of 1940, and the balance is in the treasury of the company or owned by directors. The property of the company is now operated as the Southeast & St. Louis Division of the Louisville & Nashville Systein. The First 6s sold in 1902 on a 3.95 to 4.05 basis 1904 4.20 4.40 1905 4.15 1906 4.15 4.40 1907 4.10 4.35 1909 4.15 4.20 1910 4.37 4.50 1911 4.,375 1912 4.25 4.30 [ .'594 ] The Second 3s sold in 1902 on a 3.90 to 4.05 basis 1905 4.05 1906 4.25 1907 4.25 4.90 1909 4.30 1910 4.30 (bid) 1911 4.30 1912 4.40 The First Mortgage 6s are considered a legal investment for savings banks in New England. The Second Mortgage 6s are considered legal for savings banks in New Hampshire and Rhode Island. LOUISVILLE & NASHVILLE RAILROAD First Mortgage Collateral Trust 5s Dated AjjHI 1, U Maturing November 1, 1931 Interest payable May 1 and November 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $7,000,000 Outstanding $4,705,000 Per mile . . 17.890 Provisions of i.ssue : Security : Trustee: Of the total amount authorized, but $5,129,000 have been issued, of which $4,705,000 are outstanding in the hands of the public as above, and $424,000 are held in the treasury of the company. These bonds are in effect a first mortgage on 263.03 miles of road, being secured by deposit with the trustee of $5,129,000 bonds — $3,929,000 (entire i.ssue) Birmingham Mineral First 5s of 1937 and $1,200,000 (entire issue) Owensboro & Nashville First 6s of 1931. Farmers' Loan & Trust Company, New York. The above bonds sold in 1902 on a 4.05 to 4.35 basis 1903 4.10 4.45 1904 4.00 4.40 1905 3.875 4.15 1906 4.00 4.15 1907 4.40 4.75 1908 4.35 4.85 1909 4.25 4.375 1910 4.25 4.50 1911 4.25 4.35 1912 4.20 4.40 These bonds are considered a legal investment for savings banks in Massachusetts and New Hampshire. [ 395 ] LOUISVILLE & NASHVILLE RAILROAD Atlanta, Knoxville & Cincinnati Division Mortgage Gold 4s Dated May 1, 1905 Maturing May 1, 1955 Interest payable JNIay 1 and November 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $20,245,000 Per mile . . 24,400 Provisions of issue: Security : Trustee: In addition to the amount outstanding in the hands of the pubHc as above, $4,115,000 are held in the treasury of the company; $8,205,000 are reserved to retire underlying liens, and $17,435,000 are reserved for double-tracking and for additional lines of road at a rate not exceeding $30,000 for each mile of single track or $40,000 for each mile of double track. The above bonds are secured by a direct mortgage on 829.99 miles of road. They are secured by a first mortgage on 203.68 miles; by a second mortgage on 286.53 miles, including 69.31 miles covered by the first mortgage of the Unified 4s of 1940, 214 miles covered by the Kentucky Central 1st 4s of 1987 and 3.2 miles covered by the General 6s of 1930; by a third mortgage on 339.78 miles of road, including the 332.13 miles covered by the Atlanta, Knoxville & Northern First 5s of 1946. They are also secured by direct mortgage on the bridge across the Ohio River from Newport, Ky., to Cincinnati, O.; terminal property in Cincinnati, all lands, tracks, branches, buildings, rolling stock, supplies, rents, incomes, rights, franchises, etc., used in connection with the above railroads, whether now owned or hereafter acquired, but not including any railways not acquired or constructed with bonds issued hereunder nor any equipment appertaining to the same. United States Trust Company, New York. These bonds sold in 1907 on ; a 4.60 basis 1908 4.20 to 4.75 1909 4.15 4.30 1910 4.25 4.45 1911 4.30 4.40 1912 4.35 4.45 These bonds are considered a legal investment for sa\'ings banks in New Hampshire, Connecticut and Rhode Island. [ 396 ] KENTUCKY CENTRAL RAILWAY First Mortgage 4s Dated July 1, 1887 Maturing July 1, 1987 Interest payable January 1 and July 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $7,000,000 Outstanding $6,704,000 Per mile . . 31.327 Provisions of Although these bonds were authorized to the amount of $7,000,000, this was limited by the issue: terms of the Atlanta, Knoxville & Cincinnati Division Mortgage to $6,742,000, of which $6,704,000 are in the hands of the public, as above, and $32,000 are in the treasury and $6,000 in sinking funds of the Louisville & Nashville Railroad Company. Security: The above bonds are secured by a first mortgage on the Kentucky Central Railway's line for 214.02 miles, including the road from Covington to Richmond and from Fort Estill to Sinks, Ky., 146.68 miles; also all the lands, buildings, rolling stock, incomes and franchises now owned or hereafter acquired, and all the property purchased at the foreclosure sale of the Kentucky Central. These bonds have been ASSUMED by the Louisville & Nashville Railroad Company. Equity: The above issue is prior in lien to the Atlanta, Knoxville & Cincinnati Division First 4s of 1955, a sufficient number of which have been reserved to provide for the retirement of this issue. Trustee: Metropolitan Trust Company, New York. The Kentucky Central Railway Company was organized in 1887 as a reorganization of the Kentucky Central Railroad Company. The latter was chartered in 1875, taking possession of the property of the Kentucky Central Association, an organization of the bondholders of the Covington & Lexington Railroad and the Maysville & Lexington Railroad Companies, which were sold under foreclosure in 1865. In December, 1890, the Louisville & Nashville Railroad Company acquired control of the Ken- tucky Central Railway by purchase of the entire capital stock on the basis of $1,500,000 Unified 4s and $2,000,000 South & North Alabama Railroad Consolidated 5s for $6,908,806 stock. Since 1891 the Kentucky Central Railway has been operated as an integral part of the Louisville & Nash- ville Railroad System. These bonds sold in 1902 on a 3.95 to 4.05 basis 1903 4.00 4.15 1904 3.95 4.10 1905 3.90 4.05 1906 3.95 4.05 1907 4.10 4.30 1908 4.10 4.55 1909 4.05 4.20 1910 4.10 4.25 1911 4.15 4.25 1912 4.20 4.40 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 397 ] ATLANTA, KNOXVILLE & NORTHERN RAILWAY First Mortgage 5s Dated December 1, 1896 Maturing December 1, 1946 Interest payable June 1 and December 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,500,000 Outstanding $999,000 Per mile . . 3,009 Pro\dsions of Although authorized to the amount of $1,500,000, this issue has been limited by the terms of issue: the Atlanta, Knoxville & Cincinnati Mortgage to $1,000,000, of which $1,000 are in the treasury of the company, and $999,000 are in the hands of the public, as above. Security : Equity : Trustee: The above bonds are secured by a first mortgage on 332.13 miles of Atlanta, Knoxville & Northern road, including the mileage from Junta, Ga., to Knoxville, Tenn., 140.94 miles; and from Etowah, Tenn., to Marietta, Ga., 142.82 miles, together with all branches or extensions which the company may be authorized to and may construct; also all title and interest in the line of telegraph on its right of way; also the bridge over the Tennessee River at Knoxville; and all lands, buildings, rolling stock, franchises and incomes. These bonds have been ASSUMED by the Louisville & Nashville Railroad Company. This issue is prior in lien to $500,000 First Consolidated 4s of 2002 and to the Atlanta, Knox- ville & Cincinnati Division 4s of 1955, a sufficient number of which have been reserved to provide for the retirement of this issue at maturity. Central Trust Company, New York. The Atlanta, Knoxville & Northern Railway Company was chartered June 4, 1896, as successor to the Marietta & North Georgia Railway Company. The latter was a consolidation in 1887 of the Marietta & North Georgia Railroad and the Georgia & Nortli Carolina Railroad Companies. In 1905 the legal title to the property of the Atlanta, Knoxville & Northern was conveyed to the Louisville & Nashville Railroad Company, subject to the lien of the above First Mortgage 5s and the Consolidated 4s. The road is now operated as a part of the Louisville & Nashville System. These bonds sold in 1902 on a 4.25 basis 1904 4.35 1905 4.25 to 4.30 1906 4.15 1909 4.55 4.80 1910 4.35 4.45 1911 4.30 4.35 1912 4.30 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 398 ] ATLANTA, KNOXVILLE & NORTHERN RAILWAY First Consolidated 4s Dated March 1, 1902 Maturing March 1, 2002 Interest payable March 1 and September 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $10,000 per mile Outstanding $500,000 Per mile . . 1,500 Provisions of These bonds were authorized at the rate of $10,000, but this was limited by terms of the Atlanta, issue: Knoxville & Cincinnati Division 5s to $1,280,000. Of this amount $780,000 have been redeemed and $500,000 are in the hands of the public, as above. Security: The above bonds are secured by a second mortgage on the mileage covered by the first lien of the Atlanta, Knoxville & Northern First 5s of 1946. They are ASSUMED by the Louisville & Nashville Railroad Company. Equity: This issue is prior in lien to the Atlanta, Knoxville & Cincinnati Division 4s of 1955, a sufficient number of which have been reserved to provide for the retirement of this issue. Trustee: United States Trust Company, New York. For history of the Atlanta, Knoxville & Northern Railway Company, see page 398. The above bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. LOUISVILLE & NASHVILLE TERMINAL COMPANY First Mortgage 4s Dated December 1, 1902 Maturing December 1, 1952 Interest payable June 1 and December 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $3,000,000 Outstanding $2,500,000 Provisions of These bonds are reserved for additions and improvements to the amount of $465,000. $35,000 issue: are held in the treasury of the Louisville & Nashville Railroad Company, and $2,500,000 are in the hands of the public, as above. Security : Trustee: These bonds are secured by a first mortgage on terminal property in Nashville and on build- ings, tracks and other terminal facilities now situated thereon or hereafter acquired; and on leases and the income thereof. The above bonds are GUARANTEED jointly and severally as to PRINCIPAL and INTER- EST by the Louisville & Nashville Railroad Company and the Nashville, Chattanooga & St. Louis Railway Company. Manhattan Trust Company, New York. [ 399 ] The Louisville & Nashville Terminal Company was incorporated under the laws of the State of Tennessee in March, 1893. The property of the company is leased jointly by the Louisville & Nash- ville Railroad and the Nashville, Chattanooga & St. Louis Railway Companies at a rental of 4% per annum upon the cost, use of the property and number of cars handled determining the propor- tion paid by each company. Operating expenses are also divided upon this basis. These bonds were quoted in 1909 on a 4.15 basis (bid) 1910 4.30 1911 4.30 August, 1912 4.30 SOUTH & NORTH ALABAMA RAILROAD Dated April 10, 1886 Consolidated Mortgage 5s Maturing August 1, 1936 Interest payable February 1 and August 1 at 71 Broadway, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $10,000,000 Outstanding $7,292,000 Per mile . . 36,460 Provisions of In addition to the $7,292,000 in the hands of the public, $2,208,000 are in the treasury of the issue: Louisville & Nash^^lle RaiU-oad Company, and $500,000 are deposited as collateral for the Georgia Railroad lease. Security ; Equity: Trustee: These bonds are secured by a first mortgage on 200.46 miles of road, including the line from Decatur to Montgomery, Ala., 183 miles; also on any and all tracks and road hereafter con- structed or acquired between said points. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Louisville & Nashville Railroad Company by endorsement. The above bonds are prior in lien to the South & North Alabama Railroail Improvement 5s of 1936 which are held in the treasury of the Louisville & Nashville Railroad Company. Central Trust Company, New York. The South & North Alabama Railroad was chartered under the laws of the State of Alabama on February 17, 1854. The main line was opened for traffic on October 1, 1872. The road is operated by the Louisville & Nashville Railroad Company, which owns all the preferred stock and $1,185,233 of the $1,493,588 common stock of the company. These bond! 3 sold in 1903 on a 4.65 to 4.75 basis 1904 4.05 4.30 1905 4.05 4.15 1907 4.30 4.45 1908 4.25 1909 4.05 4.35 1910 4.10 4.375 1911 4.20 4.30 1912 4.25 4.37 The above bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 400 ] WESTERN RAILWAY OF ALABAMA Consolidated First Mortgage 4)2S Dated October 1, 1888 Maturing October 1, 1918 Interest payable April 1 and October 1 at the Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,543,000 Outstandmg $1,543,000 Per mile . . 11,690 Security: These bonds are secured by a first mortgage on 132 miles of road extending from Selma, Ala., to West Point, Ga., and on lands, depots, buildings, rolling stock and equipment, whether now owned or hereafter purchased by the company for use on its railway, and on all franchises, incomes and profits thereof. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Georgia Railroad & Banking Company and are GUARANTEED as to INTEREST jointly by the Atlantic Coast Line Railroad and the Louisville & Nashville Railroad Companies under the terms of its lease. Trustee: The Metropolitan Trust Company, New York. The Western Railway of Alabama was chartered Marcli 15, 1883, under the laws of the State of Alabama and took o\er the property of the Western Railroad of Alabama, which was organized in 1870 as a consolidation of the Montgomery & West Point Railroad and the Western Railway of Alabama. The capital stock of the Western Railway of Alabama is owiied by the Central of Georgia Railway Company and the Georgia Railroad & Banking Company, and the road is operated jointly for the benefit of the Atlantic Coast Line Railroad Company and the Louisville & Nash- ville Railroad Company. The above bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.95 1911 5.20 December, 1912 5.50 These bonds are considered a legal investment for savings banks in Rhode Island. [401 ] LOUISVILLE & NASHVILLE RAILROAD COMPANY-SOUTHERN RAILWAY Joint Monon First Collateral Trust 4s Dated July 1, 1902 Maturing July 1, 1952 Interest payable on coupon bonds January 1 and July 1; on registered bonds January 1, April 1, July 1 and October 1 at the oflBce of J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and $10,000, or multiples of $10,000. Coupon and registered bonds interchangeable. Authorized $15,500,000 Outstanding $11,765,000 Provisions of Of the $15,500,000 authorized, $11,827,000 have been issued, $62,000 of which are held by the issue: Louisville & Nashville Railroad and Southern Railway Companies and $11,765,000 are in the hands of the public as above. $2,000,000 are reserved for improvements and betterments to the Chicago, Indianapolis & Louisville Railway property at not over $500,000 per year, and $1,673,000 are issuable in exchange for the latter company's stock outstanding at the rate of $90 for each share of preferred and $78 for each share of common. Redemption: The above bonds are redeemable at 105 and interest on any January 1 or July 1 on two months' notice. Not less than $1,000,000 bonds shall be called for redemption at any one time, and no registered bonds shall be called until all coupon bonds have been redeemed. If only a portion of the issue is to be redeemed, the bonds shall be drawn by lot. Security: These bonds are a joint obligation of the Louisville & Nashville Railroad and Southern Rail- way Companies. They are secured by a first collateral mortgage on $9,796,900 common stock and $3,873,400 preferred stock of the Chicago, Indianapolis & Louisville Railway Company, this stock being owned in equal amounts by the two issuing companies. If either company defaults its obligations in regard to this issue, the shares of the defaulting company shall be- come the property of the non-defaulting company which shall become liable for the full mortgage. As long as these bonds are outstanding, the Chicago, Indianapolis & Louisville Railway Com- pany agrees not to issue any new bonds except to refund existing obligations and to acquire additional property. Trustee: Standard Trust Company, New York. These bonds sold in 1903 on a 4.40 to 4.85 1904 4.15 4.55 1905 4.05 4.20 1906 4.10 4.35 1907 4.40 4.70 1908 4.60 5.20 1909 4.45 4.65 1910 4.40 4.62 1911 4.45 4.65 1912 4.55 4.65 [ 402 ] LOUISVILLE & NASHVILLE RAILROAD St. Louis Property First Mortgage 5s Dated February 29, 1896 Maturing March 1, 1916 Interest payable March 1 and September 1 at St. Louis Union Trust Company, St. Louis. Coupon bonds of $1,000. Authorized $650,000 Outstanding $617,000 Security: These bonds are secured by a first mortgage on a block of land bounded by Cass Avenue, Broadway, Dickson Street and Collins Street, and on lots of land on Collins Street and Cass Avenue, in the City of St. Louis. Trustee: St. Louis Union Trust Company, St. Louis. These bonds were quoted in 1909 on a 4.65 basis (bid) 1910 4.60 The above bonds are considered a legal investment for savings banks in Maine and New Hampshire and Rhode Island. BOND DESCRIPTIONS OF CONTROLLED ROADS Following are descriptions of the bond issues of companies operated independently but con- trolled through stock ownership by the Louisville & Nashville Railroad Company. LOUISVILLE, HENDERSON & ST. LOUIS RAILWAY First Mortgage 5s Dated June 1, 1896 Maturing July 1, 1946 Interest payable January 1 and July 1 at the Bank of America, New York. Coupon bonds of $500, registerable as to principal. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 15,150 Security: These bonds are secured by a first mortgage on 165.20 miles of road, including the line from West Point to Henderson, Ky., 121.40 miles, together with all lands, buildings, rolling stock and franchises now owned or hereafter acquired in connection with said railroad, and all in- comes thereof. Trustee : Guaranty Trust Company, New York. [ 403 ] The Louisville, Henderson & St. Louis Railway was incorporated May 29, 1896, under the laws of Kentucky, as the reorganization of the Louisville, St. Louis & Texas Railway Company. The road is operated by its own organization, although controlled by the Louisville & Nashville Railroad Com- pany, which owns 81.57% of the common stock and 38.8% of the preferred stock. These bonds sold in 1902 on a 4.40 to 5.125 1903 4.72 5.05 1904 4.40 4.95 1905 4.25 4.60 1906 4.35 4.55 1907 4.55 4.875 1908 4.50 4.75 1909 4.50 (bid) 1910 4.60 (bid) 1911 4.50 (bid) December, 1912 4.65 (bid) The above bonds are considered a legal investment for savings banks in Maine. NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY First Mortgage 7s Dated July 1, 1873 Maturing July 1, 1913 Interest payable January 1 and July 1 at the Hanover National Bank, New York. Coupon bonds of $1,000, registerable as to j^rincipal. Registered bonds of $1,000. Authorized $(i,800,000 OuLstandiug $6,300,000 Per mile . . 18,530 Provisions of By the terms of the Nashville, Chattanooga & St. Louis Railway First Consolitlatod Mortgage issue: the additional $500,000 of the First Mortgage 7s are not to be issued. Security: The above bonds are secured by a first mortgage on 340.22 miles of road including the line from Chattanooga, Teun., to Hickman, Ky., 320.21 miles; on branch hues; on terminal prop- erties at Chattanooga and Hickman; on land in Nashville and Chattanooga, and on buildings, roUing stock and franchises. Equity: These bonds are prior in lien to the First Consolidated 5s of 1928 and their retirement is pro- vided for by the terms of that mortgage. The Nashville, Chattanooga & St. Louis Railway Company was organized January 24, 1848, as the Nashville & Chattanooga Railroad Company. In 1873 the present title was adopted. In 1880 the Ix)uisville & Nashville Railroad Company acquired 55% of the capital .stock of the company, and on June 30, 1911, it owned 71.78%, or $7,177,600 out of a total of $10,000,000. The road is operated by its own management, although under the control of the Louisville & Nashville Railroad Company, [ 404 ] The above bonds sold in 1902 on a 3.75 to 4.05 basis 1903 3.95 4.40 1904 3.70 4.30 1905 3.65 4.05 1906 3.80 4.45 1907 3.55 5.40 1908 3.50 4.70 1909 3.70 4.70 1910 3.375 4.70 1911 3.60 4.70 kily, 1912 4.125 (bid) These bonds are considered a legal inv^estment for savings banks in New Hampshire, Connecticut and Rhode Island. NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY Tracy City Branch First Mortgage 6s ])at(Ml .Jatiiiary 1, 1887 Maturing 20,000 each January 1, to 1916 100,000 January 1, 1917 Interest payable January 1 and July 1 at the Hanover National Bank, New York. Coujjon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $600,000 Outstanding $180,000 Per mile . . 8,700 Provisions of $420,000 of this issue have matured and been paid. The bonds are numbered from 1 to 600 issue: and are payable in numerical order. On January 1, 1912, Nos. 401 to 420 were paid. Sccm-ity : The above bonds are secured by a first mortgage on 20.73 miles of road extending from Cowan (a point on the main line) to Tracy City; also on lands, buildings, franchises and income; also on rolling stock now owned or hereafter acquired for use in connection with this line. Equity: These bonds are \moT in Uen to the Nashville, Chattanooga & St. Louis Consolidated 5s of 1928, a sufficient number of which have been reserved to pro\ide for the retirement of this issue. Trustee: Central Trust Company, New York. For history of the Nashville, Chattanooga & St. Louis Railway Compauy, see page 404. The above bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. [ 405 ] NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY Fayette & McMinnville Branches First Mortgage 6s Dated January 1, 1877 Maturing January 1, 1917 Interest payable January 1 and July 1 at the Hanover National Bank, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $750,000 Outstanding $750,000 Per mile . . 5,950 Security: The above bonds are secured by a first mortgage on 126.21 miles of road, including the 60.63 miles of line extending from Tullahoma to Sparta, Tenn. ; also on equipment, lands, buildings, rolling stock, franchises and incomes pertaining to said lines. Equity: These bonds are prior in lien to the First Consolidated 5s of 1928 and their retirement is pro- vided for by the terms of that mortgage. For history of the Nashville, Chattanooga & St. Louis Railway Company, see page 404. These bonds sold in 1909 on a 4.70 basis (bid) 1910 4.55 1911 4.60 (bid) 1912 4.25 The above bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY Lebanon Branch First Mortgage 6s Dated October 1, 1877 Maturing January 1, 1917 Interest payable January 1 and July 1 at the Hanover National Bank, New York. Coupon bonds of $1,000, registerable as to principal. .\uthorized $300,000 Outstanding $300,000 Per mile . . 10,350 Security: The above bonds are secured by a first mortgage on 29.21 miles of line extending from Nash- ville to Lebanon, Tenn., and on lands, buildings, rolling stock and franchises in connection with this road. Ecjuity: This issue is prior in lien to the Consolidated 5s of 1928, a sufficient number of which have been reserved to i)rovide for the retirement of these bonds. For history of the Nashville, Chattanooga & St. Louis Railway Company, see page 404. [ 406 ] These bonds were quoted in 1909 on a 4.50 basis (bid) 1910 4.55 1911 4.65 December, 1912 4.85 These bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY Jasper Branch Extension First Mortgage 6s Dated January 1, 1883 Maturing January 1, 1923 Interest payable January 1 and July 1 at the Hanover National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $16,000 per mile Outstanding $371,000 Per mile . . 20,000 Provisions of This mortgage is closed by the terms of the mortgage of Nashville, Chattanooga & St. Louis issue: First ConsoUdated 5s. Security: These bonds are secured by a first mortgage on 18.50 miles of railroad extending from Victoria to Dunlap, Tenn., and on lands, buildings, and incomes. Equity: This issue is prior in lien to the First Consolidated 5s of 1928, a sufficient number of which are reserved to provide for the retirement of these bonds. Trustee: Central Trust Company, New York. For history of the Nashville, Chattanooga & St. Louis Railway, see page 404. These bonds sold in 1905 on a 4.10 to 4.45 basis 1906 4.35 1907 4.55 1909 4.55 (bid) 1910 4.38 1911 4.55 (bid) December, 1912 4.70 (bid) The above bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. [ 407 ] NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY Centreville Branch First Mortgage 6s Dated January 1, 1883 Maturing January 1, 1923 Interest payable January 1 and July 1 at the Hanover National Bank, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $8,000 per mile of narrow gauge Outstanding $376,000 $15,000 per mile of broad gauge Per mile . . 8,175 Provisions of This mortgage is closed bj' the terms of the mortgage of the First Consolidated 5s of 1928. issue : Security: The above bonds are secured by a first mortgage on 46. 4() miles of road extending from Dick- son to Etna, Tenn., and on equipment and future acquisitions. Equity: These bonds are prior in lien to the First Consolidated 5s of 1928 which provide for the re- tirement thereof. Trustee: Central Trust Company, New York. For liistory of the Nashville, Chattanooga & St. Louis Railway Comi)any, see page 104. These bonds were quoted in 1909 on a 4.70 basis (bid) 1910 5.00 1911 4.875 December, 1912 4.80 These bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. NASHVILLE, CHATTANOOGA & ST. LOUIS RAILWAY First Consolidated Mortgage 5s Dated A|)rii 2, ISHH Maturing .Vi)ril 1, )!)2H Intcresl payable April 1 and October 1 at the Hanover National M.ink, New York. Coupon bonds of $1,000, registerable as to i)rincipal. Authorized $20,0()0,0()0 Outstanding $7,608,000 Per mile . . 9,070 Provisions of $8,297,000 of the $20,000,000 authorized are re.served to retire prior liens; $4,095,000 are issue: issuable at not over $20,000 per mile for any additional railroad acquired by purchase, con- . struction, consolidati(jn or otherwise; and $7,608,000 are in the hands of the public as above. The rate of interest has been reduced from 5% to 4% on all issues after July 1, 1905. Security: These bonds are secured by direct mortgage on 839.03 miles of road and on buihlings, equij)- ment and future acquisitions. They are secured by a first mortgage on 257.70 miles; by a [ 408 ] second mortgage on 581.33 miles covered by the first mortgages of the First 7s of 1913; Cen- treville Branch 6s of 1923; Fayette & McMinnville Branches 6s of 1917; Jasper Extension 6s of 1923; Lebanon Branch 6s of 1917 and the Tracy City Branch 6s due serially until 1917 (for description of mileage co^•ered by these first mortgage issues, see above). "The lien hereof shall attach to all additional mileage which shall be unincumbered and on which these bonds may be issued at the rate of $20,000 per mile, and to the equii)ment and ])roperty appurtenant thereto, until the entire authorized amount (including the amount held to provide for prior liens) shall be issued, then no further railroad or property shall be covered hereby." Trustee: United States Trust Company, New York. For lii-story of the Nash\ille, Chattanooga & St. Louis Railway Company, see page 401. These bonds sold in 1902 on a 4.00 to 4.25 basis 1903 4.05 4.45 1904 3.95 4.30 1905 3.875 4.05 1900 3.95 4.20 1907 3.875 4.90 1908 4.10 4.60 1909 4.00 4.20 1910 4.15 4.30 1911 4.10 4.25 1912 4.15 4.35 The above bonds are considered a legal investment for sa\'ings banks in New Hampshire, Connecticut and Rhode Island. CHICAGO, INDIANAPOLIS & LOUISVILLE RAILWAY Refunding Mortgage 6s, 5s and 4s Dated July 1, 1897 Maturing July 1, 1947 Interest payable January 1 and July I at the office of J. P. Morgan & Co., New York. Cuu])on bonds of .$1,000, rcgisterable as to principal. Authorized $15,000,000 OuLslanding (6s) $4,700,000 (5s) 5,000,000 (4s) 5,300,000 Per mile . . . 29,500 Security: The above bonds are secured by a first mortgage on 508.79 miles of road, including the line from New Albany to Michigan City, 288.86 miles and from Hammond to Indianapolis, 161.94 miles; also on equipment and future acquisitions. Trustees: The Central Trust Company, New York, and James ]\Iurdock, Esq. The Chicago, Indianapolis & Louisville Railway Company was chartered March 31, 1897, under the laws of Indiana, as a reorganization of the Louisville, New Albany & Chicago Railway [ 409 ] Company. The latter company was the result of a consolidation on May 5, 1881, of a company of the same name with the Chicago & Indianapolis Air Line Railway Company. The Chicago, Indianapolis & Louisville Railway Company is operated by its own organization, but is controlled by the Southern Railway and the Louisville & Nashville Railway Companies, which own jointly about 93% of its common stock and 77% of its preferred stock. The 6s of 1947 sold in 1902 on a 4.35 to 4.62 basis 1903 4.45 4.70 1904 4.35 4.60 1905 4.15 4.25 1906 4.12 4.50 1907 4.55 4.90 1908 4.35 5.00 1909 4.40 4.50 1910 4.37 4.65 1911 4.40 4.50 1912 4.35 4.60 1902 on a 4.15 to 4.35 b 1903 4.35 4.55 1904 4.15 4.40 1905 4.20 4.375 1906 4.25 4.30 1907 4.40 4.60 1908 4.55 4.65 1909 4.20 4.35 1910 4.60 (bid) 1911 4.40 4.60 1912 4.40 4.45 The 4s of 1947 sold in 1910 on a 4.27 basis 1911 4.27 December, 1912 4.35 (asked) CHICAGO, INDIANAPOLIS & LOUISVILLE RAILROAD Equipment Gold Bonds Series " A " 43/^s Dated March 15, 1911 Maturing $21,000 on September 15 and March 15 to September 15, 1918, inclusive, and $22,000 March 15 and September 15 to March 15, 1921, inclusive. Interest payable March 15 and September 15 at the Equitable Trust Company, New York. Coupon bonds of $1,000. Authorized $425,000 Outstanding $362,000 $63,000 were redeemed to December 31, 1912. Security: These bonds are a direct obligation of the company and are secured upon 3 passenger locomo- tives, 7 consolidation freight locomotives, 100 automobile cars, 200 flat cars, 2 combination passenger and baggage cars, 3 first-class pa.ssenger cars, 2 parlor cars and 1 dining car for which [410] the company issued the above bonds and paid $75,000 in cash. The title to this equipment remains with the trustee until all the bonds are paid. Trustee: Equitable Trust Company, New York. Series " B " 4^8 Dated October 16, 1911 Maturing $37,000 April 15 and $38,000 October 15 from April 15, 1912, to October 15, 1921. Interest payable April 15 and October 15 at Bankers' Trust Company, New York. Coupon certificates of $1,000. Authorized $750,000 Outstanding $675,000 Security: These are a direct obligation of the company and are secured upon 9 Mikado freight locomo- tives and 1,000 drop bottom steel gondola cars, for which the company issued these certificates and paid $1,315,300 in cash. The title to the equipment remains with the trustee until all the certificates are paid. Trustee: Bankers' Trust Company, New York. INDIANAPOLIS & LOUISVILLE RAILWAY First Mortgage 4s Dated January 1, 1906 Maturing January 1, 1956 Interest payable January 1 and July 1 at the Standard Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $6,000,000 Outstanding $1,650,000 Per mile . . 27,500 Provisions of $4,350,000 of the above amount authorized are issuable as mileage is added for extensions, issue: improvements, betterments, terminals, etc., at not exceeding $30,000 per mile. Security: The above bonds are secured by a first mortgage on 59.70 miles of road in Indiana, including the 54.70 miles from Shirley Hill to Wallace Junction, on the main line of the Chicago, Indian- apolis & Louisville Railway. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Chicago, Indian- apolis & Louisville Railway Company. Trustees: Standard Trust Company, New York, and Edward M. F. Miller, Esq. The Indianapolis & Louisville Railway Company was chartered under the laws of the State of Indiana on March 20, 1899, the main line being opened for traffic on October 1, 1907. On January 1, 1906, the road was leased for 99 years to the Chicago, Indianapolis & Louisville Railway Company, [411 ] which agreed to pay the fixed charges and to redeem the bonds at maturity. The entire capital stock of the road is owned by the Chicago, Indianapolis & Louisville Railway Company. The above bonds were quoted in 1909 on a 4.40 basis (bid) The above bonds were sold in 1910 4.10 to 4.30 basis 1911 4.85 (asked) 1912 4.50 to 4.75 These bonds are considered a legal investment for savings banks in Maine. [412] MAINE CENTRAL RAILROAD COMPANY MAINE CENTRAL RAILROAD COMPANY HISTORY The Maine Central Railroad Company was organized under the laws of Maine, October 28, 1862, as the result of the consolidation of the Androscoggin & Kennebec Railroad Company and the Penobscot & Kennebec Railroad Company. On November 16, 1874, the Portland & Kennebec Rail- road Company, the Somerset & Kennebec Railroad Company, and the Leeds & Farmington Rail- road Company were absorbed. The Maine Shore Line Railroad Company (Mt. Desert Branch) was consolidated with the Maine Central Railroad, October 22, 1888, and the Knox & Lincoln Rail- way was absorbed, February 20, 1901. May 1, 1907, the Maine Central Railroad Company leased the property of the Portland & Rumford Falls Railroad Company for 999 years at an annual rental of $328,000. It was not until the summer of 1911 that the Maine Central reached its present size, when it took over the Somerset Railway, the Washington County Railway, the Sebasticook & Moosehead Rail- road and the Androscoggin Railroad Companies. In August, 1911, the Maine Central Railroad Company also purchased the entire capital stock ($241,600) of the Sandy River & Rangeley Lakes Railroad, a narrow gauge railroad covering some 90 miles from a northern terminus of the jVIaine Central to Bigelow, Maine, and running through a territory rich in forests and agricultural and in- dustrial possibilities. On January 1, 1912, the company leased the property of the St. Johnsbury & Lake Champlain Railroad operating between Lunenburg and St. Johnsbury, Vermont, 27 miles, at an annual rental of $25,000. During the fiscal year of 1912 nearly all the capital stock of the Bridgton & Saco River Railroad was acquired. PROPERTY On June 30, 1912, the Maine Central Railroad System, as a result of the above newly made acqui- sitions, operated 1,204.08 miles of main track, of which 640.78 miles were owned in fee and 563.30 miles were leased. The company's lines extend from Portland, Maine, to Lime Ridge, Quebec, and from Portland to Bangor, and Vanceboro, Maine. A line also runs from Brewer Junction to Mt. Desert, Eastport, Calais and Princeton, Maine. Other important branches (including the new acquisitions) connect Farmington with Rangeley, Calais with Washington Junction, Oakland with Kineo, Pittsfield with Mainstream, and Queljec Junction with St. Johnsbury, Vermont. [415 ] CAPITALIZATION At the close of the company's fiscal year, June 30, 1912, the capital account of the Maine Central Railroad stood as follows: Capital stock $9,979,700 Bonded debt 8,661,500 Notes 12,000,000 Nominal capitalization $30,641,200 Rentals capitalized @ 5% 18,921,440 Gross capitalization $49,562,640 Securities owned 3,400,250 Net capitalization $46,162,390 Net capital per mile operated $38,726 Average miles operated 1,192.10 Net income to net capital 6.7% Fixed charges to net income 83.4% Margin of safety 16.6% From the above figures, it will be seen that the nominal capitalization of the Maine Central Raih-oad proper amounted to $30,641,200. This is at the rate of $47,802 per mile for the 640.78 miles of road owned in fee at the time the figures were compiled. There were, also, over 560 miles of leased road, and the reports show the capitalization of these leased lines to be $20,376,700, a figure slightly in excess of that of rentals capitalized at 5% above. The net capitalization shown in the above table is rather low for an eastern road. Its $38,726 per mile compares very favorably with $79,119 for the Boston & Maine Railroad, and $43,834 for the Bangor & Aroostook Railroad. The Maine Central earned net upon its net capitalization 6.7% as compared with 6.6% earned by the Boston & Maine and 4.9% by the Bangor & Aroostook. On April 1, 1912, obligations of the company amounting to $15,484,000 matured. This was equal to over 75% of the total funded indebtedness of the road then outstanding. To meet, in part, these obligations, it was deemed advisable to issue $12,000,000 One Year 4% Coupon Notes, rather than issue a part of the company's $25,000,000 Fifty Year 4% Refunding Mortgage Bontl.s authorized in July, 1911. These notes will mature March 15, 1913. In April, 1914, $2,000,000 Five Year 4% Coupon Notes will mature. With these items refunded, there will be no large amount of securities maturing until 1920. To provide funds to assist in the reduction of the company's indebtedness, its directors voted to increase the authorized capital stock from $10,000,000 to $15,000,000. The new stock was offered to stockholders of record June 15, 1912, on the basis of one share of new stock for each two shares of stock held at that time. CHARACTER OF TRAFFIC The Maine Central System serves the central and northern parts of Maine. This rapidly de- veloping territory possesses great agricultural and manufacturing possibilities. Fully 60% of the total traffic of the road is freight, and is diversified in character, as can be seen by the statistics given for the years 1908 to 1912 inclusive: [ 416 ] 1911 1910 1909 1908 Tons Tons Tons Tons 1,163,531 1,016,143 1,064,911 905,463 102,57(5 98,519 99,548 95,984 1,039,243 1,019,224 868,596 1,038,978 2,035,559 2,107,572 1,850,745 1,935,830 1,311,177 1,356,257 1,210,214 1,291,150 657,407 657,685 569,862 607,395 6,309,493 6,255,400 5,663,876 5,874,800 Products of 1912 Tons Agriculture 1,321,892 Animals 122,876 Mines 963,011 Forests 2,234,379 Manufactures .... 1,336,989 Miscellaneous .... 814,372 Total tons 6,793,519 The passenger business of the Maine Central represents about 32% of the gross business of the system. In every year but one since 1906, the passenger revenue and the number of passengers car- ried have steadily increased. In 1907, 3,717,849 passengers paid a total revenue of $2,708,004, while in the fiscal year of 1912, 4,640,398 passengers paid $3,333,504. Below is a comparative statement of the salient passenger statistics of the system for the years 1907 to 1912 inclusive: Year Total passenger Total passengers Average Average rate revenue carried revenue per per mile passenger 1907 $2,708,004 3,717,849 $.728 $.0204 1908 2,860,992 3,890,364 .735 .0207 1909 2,774,481 3,878,688 .715 .0203 1910 2,922,757 4,085,870 .715 .0205 1911 2,960,662 4,115,603 .719 .0204 1912 3,333,504 4,640,398 .718 .0206 EARNINGS The gross earnings of the road have shown a steady increase, from $5,613,000 in 1900, to over $10,600,000 in 1912, a gain of nearly 90%. The net earnings also show a proportionate gain, especially since 1906, with no corresponding increase in mUes of road operated until 1912. In general, the earnings of the road appeared to be stable in spite of the business depression which afi'ected most of the American systems during the years 1908 and 1909. Below are tabulated the gross and net earnings of the railroad for the year 1900 and for the years 1907 to 1912 inclusive: Year Average mile operated 1900 816 1907 845 1908 931 1909 932 1910 932 1911 932 1912 1,192 MAINTENANCE During the six years ending June 30, 1912, nearly $15,900,000 was spent for maintenance. This is an average of $2,650,000 annually, or $2,752 a mile. This system, though not as much as others, felt the general business depression which prevailed during the years 1908 and 1909, but every [417 ] Gross Per mile Net Per mile earnings earnmgs $5,612,924 $6,878 $1,858,952 $2,278 8,348,139 9,879 2,683,966 3,176 8,514,256 9,145 2,594,656 2,787 8,337,723 8,940 2,558,445 2,746 8,922,312 9,573 2,820,025 3,027 9,067,803 9,729 2,499,254 2,683 10,643,051 8,929 2,952,205 2,477 effort was made to maintain its high standards of efficiency through those somewhat lean years. With the return of better conditions in 1910 and 1911, the company spent more than ever before, as is shown by the following table: Year Maintenance Maintenance Total Per mile of way of equipment maintenance 1907 $1,076,193 $1,244,631 $2,320,824 $2,747 1908 1,239,497 1,250,245 2,489,742 2,674 1909 1,231,550 1,180,584 2,412,134 2,587 1910 1,305,384 1,282,914 2,588,298 2,776 1911 . 1,416,937 1,335,278 2,752,215 2,952 1912 1,880,247 1,434,052 3,314,299 2,780 ADDITIONS AND BETTERMENTS Since 1907 over $7,000,000 has been expended for the purchase of new equipment and for other additions and betterments to property. Below is a statement of the amount thus spent annually since 1907 and the proportion which was charged to income: Year Equipment Other additions Total Amount charged and betterments to income 1907 $468,895 $255,441 $724,306 $724,306 1908 357,202 594,985 952,187 194,078 1909 ... 345,439 345,439 113,733 1910 143,964 1,303,102 1,447,066 353,956 1911 2,108,664 857,720 3,026,384 185,470 1912 49,930 582,272 632,202 114,830 $7,127,584 $1,686,373 DIVIDENDS From 1884 to July, 1903, inclusive, 6% dividends upon outstanding stock were paid annually. From October, 1903, to Jidy, 1907 inclusive, 7% was paid, and from October, 1907, to July, 1911 in- clusive, 8%. In July, 1911, the du-ectors reduced the dividend rate from 8% to 6% per annum, this rate to be paid upon both the old stock and the new stock beginning with the fiscal year of 1912. The Maine Central Railroad Company has been controlled for some time by the Boston & Maine Railroad Company through ownership of a majority of its capital stock. Both have had the same president for many years. STATISTICS Following are given capitalization, earnings and traffic statistics of the Maine Central Railroad, based on the average miles operated, for the year 1900 and the years 1905 to 1912 inclusive: [418 ] MAINE CENTRAL RAILROAD Fiscal Capital Funded Rentals Gross C »wned by Net Average Extra year stock debt @ 5Vo capital company capital miles main operated track 1900 $6,112 $13,349 $15,847 $35,308 $598 $34,710 816 41 1905 6,112 13,253 13,382 32,747 1,004 31,743 816 45 1906 6,112 14,573 13,509 34,194 1,357 32,837 816 45 1907 5,903 14,073 14,339 34,315 1,652 32,663 845 50 1908 5,358 12,773 18,887 37,( 318 1,528 35,490 931 52 1909 5,360 14,905 18,886 39, 151 1,516 37,635 932 52 1910 5,360 20,270 21.825 47,- 455 1,516 45,939 932 60 1911 5,360 21,880 22,312 49,552 2,915 46,637 932 61 191'2 8,372 17,333 15,874 41,579 2,853 38,726 1,192 71 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus year operating and general operating income net charges available revenue Way Equipment expense revenue income for dividends 1900 $6,878 $963 $1,989 $1,648 $2,278 $105 $2,383 $1,690 $693 190.5 8,700 1,509 li003 3,463 2,752 290 3,015 1,937 1,076 190G 9,552 1,940 1,794 3,658 2,160 120 2,280 1,783 497 1907 9,879 1,274 1,473 3,956 3,176 115 3,291 1,831 1,460 1908 9,145 1,331 1,343 3,684 2,787 67 2,854 2,208 646 1909 8,946 1,321 1,266 3,613 2,746 94 2,840 2.181 659 1910 9,573 1,400 1,376 3,770 3,027 182 3,209 2,498 711 1911 9,729 1,520 1,432 4.094 2,683 476 3,159 2,695 464 1912 8,929 1,577 1,203 3,672 2,477 135 2,612 2,169 443 Fiscal Divi- Oilier Surplus Operating Total Conduct- Fixed Gross Net Per cent , Freight year .lends ch; urges expenses maintenance ing trans- charges earnings income earned o n to all 1 to gross to gross ] f)ortation to gross to gross to net eapit.ll traffic income earnings earnings to gross earnings capital capital stock $366 $224 $103 earnings 24.8% 16.4% 1900 66.88% 46.3% 20.6% 6.9% 11.3% , 59% 1905 427 606 43 67.24 27.4 39.8 22.2 26.6 9.5 17.4 60 1906 427 70 77.40 39.4 38.0 23.8 27.9 6.9 8.0 60 1907 412 857 191 67.58 27.8 40.0 33.3 28.8 10.1 25.2 60 1908 428 -. .'08 10 69.53 29.3 40.2 31.2 24.7 8.3 12.0 00 1909 427 122 110 69.31 29.0 40.3 31.7 22.8 7.5 12.3 60 1910 427 233 51 68.39 29.1 39.3 33.5 20.1 6.9 13.1 61 1911 427 29 7 72.44 30.4 42.0 27.7 19.6 6.7 8.<; 61 1912 371 52 20 72.26 31.2 41.1 24.4 21.4 0.7 5.3 62 Fiscal Train Maintenance Conductiiig Train Kates per mile Freight Train Passenger. year mile per revenue transportati ion mile density load freight and earnings tram mile per revenue earnings Per Pe revenue company (gross) $1.66 Way Equiprae $.482 nt train mil e (net) $.545 passenger ton tons 187 cars 1900 $.233 $.400 $.0223 $.0113 355,235 4,217 1905 2.06 .348 .231 .800 .681 .0202 .0107 486,194 277 5,934 1906 2.11 .428 .396 .802 .484 .0200 .0103 549,611 283 6,569 1907 2.10 .270 .312 .340 .678 .0204 .0102 580,308 279 8,000 1908 2.02 .293 .296 .812 .619 .020 7 .0106 514,956 252 8,042 1909 2.00 .295 .283 .807 .615 .0203 .0099 539,646 268 7,922 1910 2.10 .307 .301 .826 .666 .0205 .0098 596 1,663 290 7,843 1911 2.09 .329 .308 .880 .573 .0204 .0103 573,652 276 9,253 1912 2.07 .366 .279 .852 .573 .0206 .0109 513,854 251 10,045 [419 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Maine Central Eailroad System, together with the bases on which they have sold during the decade ending June 30, 1912: MAINE SHORE LINE RAILROAD First Mortgage Currency 6s Dated June 1, 1883 Maturing June 1, 1923 Interest payable June 1 and DecenilxT 1 at National Park Bank, New York, Second National Bank, Boston, First National Bank, Portland, or at ofSce of the Company, Portland. Coupon bonds of $1,000. Authorized $750,000 Outstanding $81,000 Per mile . . 1,970 Provisions of $669,000 of the above bonds have been deposited with the trustee of the Collateral Trust 5s issue: of 1923. Security: The above bonds are secured by a first mortgage on the Maine Shore Line Railroad Company's line from Brewer Junction to Mt. Desert Ferry, Me., 41.13 miles, and future acquisitions. These bonds were ASSUMED by the Maine Central Railroad Company. Equity: These bonds are prior in lien to the new Maine Central Consolidated Refunding Mortgage Bonds of 1961, a sufficient number of which are reserved to retire this issue. The Maine Shore Line Railroad was chartered March 4, 1881. The line above mentioned was completed and opened for traffic June 23, 1884. In 1888 the company was consolidated into, and all property was deeded over to, the Maine Central Railroad Company, under the terms of a perpetual lease. These bonds are considered a legal investment for savings banks in New England, except Rhode Island. PENOBSCOT SHORE LINE RAILROAD First Mortgage Currency 4s Dated August 1, 1890 Maturing August 1, 1920 Interest payable February 1 and August 1 at National Park Bank, New York, Second National Bank, Boston, First National Bank, Portland, or at office of the Company, Portlanil. Coupon bonds of $1,000, fully registerable in lots of $1,000, $5,000 and $10,000. Authorized $1,300,000 Outstanding $1,300,000 Per mile . . 27,000 Security: The above bonds are secured by a first mortgage on the Penobscot Shore Line Railroad Com- pany's lines, totalling 48.57 miles as follows: from Woolwich to Rockland, Me., 47.13 miles, and a branch in Rockland, 1.44 miles. The bonds are further secured by a first mortgage on all the equipment of the line and also on the property of the ferry line between Woolwich and Bath. These bonds were ASSUMED by the Maine Central Railroad Company in 1901. [ 422 J Equity: These bonds are prior in lien to the $400,000 Knox & Lincoln 5s of 1921 and to the new Maine Central ConsoHdated Refunding Mortgage Bonds of 19G1, a sufficient number of which are reserved to retire this issue. The Penobscot Shore Line Railroad Company, which prior to 1890 was known as the Knox & Lincoln Railroad Company, was chartered under the latter name in 1868 under the laws of the State of Maine. The road was commercially opened in November, 1871. On August 1, 1890, the road be- gan operations under the management of the Penobscot Shore Line Railroad Company, and in 1891 its name was changed to the Knox & Lincoln Railway Company which in 1901 was merged into the Maine Central Railroad Company's System. These bonds were quoted in 1910 on a 4.75 ba.sis (bid) 1911 4.85 July. 1912 4.90 These bonds are considered a legal investment for savings banks in New England. WASHINGTON COUNTY RAILWAY First Mortgage Gold 3} 2S Dated January 1, 1904 Maturing January 1, 1954 Interest payable January 1 and July 1 at National Park Bank, New York, Second National Bank, Boston, First National Bank, Portland. Coupon bonds of $1,000, registerable as to principal. Authorized $20,000 per mile (Outstanding $2,500,000 Per mile . . 18,110 Security : The abo\-e bonds are secured l)y a first mortgage on the Washington Comity Railway Company's lines, totalling 138.03 miles, as follows: from Calais to Washington Junction, Me., 102.49 miles; from Ayer Junction to Eastport, Me., 16.48 mUes; from St. Croix Junction to Prince- ton, Me., 17.85 miles; and from Woodland Junction to W'oodland, Me., 1.21 miles. The bonds are further secured by a first mortgage on all the equipment of the line and future acquisitions. Tlie.se bonds were ASSUINIED by the Maine Central Railroad Company at time of consolida- tion, and also bear the endorsed GUARANTEE of PRINCIPAL and INTEREST by that company. Redemi)tion: These bonds are redeemable as a whole at par and interest on January 1, 1924, by the company or any guarantor, upon 60 days' notice. Equity : These bonds are prior in lien to the IVIaine Central Consolidated Refunding Mortgage Bonds of 1961, a sufficient number of which have been reserved to retire this issue. Trustee: Central Trust Company, New York. The Washington County Railroad was chartered March 7, 1893, under the laws of the State of Maine. Its road was commercially opened throughout on January 1, 1899. In December, 1903, the Washington County Railway Company was chartered as successor to the Washington County Railroad Company, and in 1911 the former was merged into the Maine Central System. [ 423 ] These bonds were quoted in 1909 on a 4.15 basis (bid) 1910 4.55 1911 4.55 December, 1912 4.60 These bonds are considered a legal investment for savings banks in New England. MAINE CENTRAL RAILROAD Collateral Trust Sinking Fund Currency 5s Dated June 1, 1883 Maturing June 1, 1923 Interest payable June 1 and December 1 at the American Trust Company, Boston. Coupon bonds of $1,000. Authorized $700,000 Outstanding $669,000 Per mile . . 16,300 Security : The above bonds are secured by a first lien through deposit with the trustee of an equal amount of Maine Shore Line Railroad Company First Mortgage Currency 6s of 1923, which cover that company's hne from Brewer Junction to Mt. Desert Ferry, Me., 41.13 miles. The bonds thus deposited with the trustee are followed by and provided for in the new Maine Central Consolidated Refunding Mortgage. Sinking fund: The 1% excess interest received on the above-mentioned deposited bonds, less trustee's fees, is used as a sinking fund for the purchase of these bonds at not exceeding 105 and interest, or, if not so purchasable, the fund may be invested in other securities with the assent of the com- pany. July 1, 1912, the fund amounted to $326,396.75, invested in bonds of the Boston & Maine System. Trustee: American Trust Company, Boston. These bonds sold in 1903 on a 3.20 to 4.30 basis 1904 3.85 1909 4.35 (bid) 1910 4.40 (bid) 1911 4.30 (bid) r, 1912 4.62 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Connecticut. [ 424 ] UPPER COOS RAILROAD First Mortgage Currency 4s Dated ]\Jay 1, 18!)() Maturing May 1, 1030 Interest payable May 1 and No\enibcr 1 at New York, Boston and Portland. Coupon bonds of $500 and $1,000. Authorized $350,000 Outstanding $350,000 Per mile . . 15,340 Security: The above bonds are secured by a first mortgage on the Upper Coos Railroad Company's lines from North Stratford, N. H., to the Canadian Boundary Line at Beecher Falls, 22.83 miles. The bonds are further secured by a first mortgage on the leasehold of the Upper Coos Railroad of Vermont, of which the mortgagor holds the stock. These bonds are GUARANTEED as to PRINCIPAL and INTEREST under terms of the lease by the endorsement of the Maine Central Railroad Company. The Upper Coos Railroad Company was chartered in October, 1884. The road was commercially opened throughout in May, 1891. It was leased to the Maine Central Railroad Company for 999 years from May 1, 1890, at a yearly rental equivalent to taxes, the interest on all outstanding bonds, (i% on the capital stock, and $.500 for organization expenses. The railroad is at present a division of the Maine Central Railroad Company's system. These bonds were quoted in 1909 on a 4.07 basis (bid) 1910 4.30 1911 4.30 December, 1912 4.55 These bonds are considered a legal investment for savings banks in New England, except Vermont. UPPER COOS RAILROAD Extension Mortgage Currency 4J.2S Dated May 1, 1890 Maturing May 1, 1930 Interest payable May I and November 1 at New York, Boston and Portland. Coupon bonds of $1,000. Authorized $21,000 per mile Outstanding $693,000 Per mile . . 21,320 Security : The above bonds arc secured by a first mortgage on the Upper Coos Railroad Company's line from Stratford to Quebec Junction, N. H., 32.5 miles, also all leasehold interest in the Coos Valley Railroad Company. These bonds are GUARANTEED as to PRINCIPAL and INTEREST under terms of the lease of the Upper Coos Railroad Company to the Maine Central Railroad Comjiany by the endorsement of the latter. [425 ] The entire capital stock of tlie Coos Valley Railroad Company of Vermont is owned by the Upper Coos Railroad Company of New Hampshire, to whom the line is leased for 999 years, from May 1, 1890, at a rental of $1 payable at the expiration of the lease. The latter, in turn, was leased to the Maine Central Railroad Company for 999 years from May 1, 1890. These bonds quoted in 1909 on a 4.07 basis (bid) 1910 4.50 1911 4.50 December, 1912 4.55 These bonds are considered a legal investment for savings banks in New England, except Vermont. EUROPEAN & NORTH AMERICAN RAILWAY Refunding Mortgage Gold 4s Dated January 2, 1893 Maturing -January 1, 1933 Interest payable January 1 and July 1 at National Park Bank, New York, Second National Bank, Boston, First National Bank, Portland, or at Treasurer's office. Coupon bonds of $1,000. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 18,200 Security: The above bonds are secured by a first mortgage on the line from Bangor, Me., to Winn, 55 miles. This issue is a JOINT and SEVERAL obligation of the Maine Central Railroad Company and the Eurojjean & North American Railway Company. Trustee: Boston Safe Dei)osit & Trust Company, Boston. The European & North American Railway Company was chartered in 1850 under the laws of the State of Maine. It was leased for 999 years from April 1, 1882, to the Maine Central Railroad Com- pany at an annual rental of $125,000, and $500 for organization expenses. The lessee also agreed to pay all the debts and bonds of the lessor and interest upon the same. Tlie.se bonds quoted in 1909 on a 4.07 basis (bid) 1910 4.27 1911 4.27 December, 1912 4.50 These bonds are considered a legal investment for savings banks of New England, except Vermont. 420 ] PORTLAND & RUMFORD FALLS RAILWAY Consolidated First Mortgage Gold 4s Dated November 2, 1896 Maturing November 2, 1926 Interest payable May 1 and November 1 at Old Colony Trust Company, Boston. Coupon bonds of $1,000, registerable as to jmncipal. Authorized $1,000,000 . Outstanding $933,000 Per mile . . 14,770 The sinking fund has retired $67,000 of this issue. Security: These bonds are secured by a first mortgage on the Portland & Rumford Falls Railway Com- pany's lines, totalling 63.16 miles as follows: from Rumford Junction to Rumford Falls, Me., 53.58 miles; and from Canton to Chisholm's Mills, Me., 9.58 miles. They are further secured by a first mortgage on all the equipment of the above lines and future acquisitions. These bonds are GUARANTEED as to INTEREST by the Portland & Rumford Falls Rail- road under terms of lease. Sinking fund: Two-thirds of 1% per annum of the par value of all the bonds issued is to be set aside and applied to the purchase of this issue at not exceeding par and interest, or if not so purchasable to be invested in securities authorized by the laws of Maine as investments for savings banks. Trustee: Old Colony Trust Company, Boston. The Portland & Rumford Falls Railway was organized under the laws of Maine, November 8, 1890. The road was conmiercially opened for traffic on February 12, 1894. It was leased for 1,000 years from April 1, 1907, to the Portland & Rumford Falls Railroad Company, which was organized March 28, 1907, under the laws of Maine. Under the terms of this lease the Portland & Rumford Falls Railroad is to pay interest and sinking fund charges on all outstanding bonds, 8% on capital stock, and $300 for organization expenses — ■ a total annual charge of $255,000. The Portland & Rumford Falls Railroad Company, in turn, leased the projierties and franchises of the Portland & Rumford Falls Railway Company and the Rumford Falls & Rangeley Lakes Rail- road Company for a term of 999 years from May 1, 1907, to the Maine Central Railroad Comi)any. The terms of the lease provide for an annual rental of $328,000. These bonds were quoted in December, 1912, on a 4.37 basis. These bonds are considered a legal investment for savings banks in Maine, Massachusetts, Connecticut and Rhode Island. 427 ] DEXTER & PISCATAQUIS RAILROAD First Mortgage Currency 4s Dated July 1, 1889 Maturing July 1, 1929 Interest payable January 1 and July 1 at the Boston Safe Deposit & Trust Company, Boston. Coupon bonds of $1,000, reglsterable as to i)rineipai. Authorized $175,000 Outstanding $175,000 Per mile . . 10,580 Security: The above bonds are secured by a first mortgage on the Dexter & Piscataquis Railroad Com- pany's line from Dexter to Foxcroft, Me., 16.54 miles. They are further secured by a first mortgage on all equipment of the line and future acquisitions. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Maine Cen- tral Railroad Company. Trustee: Boston Safe Deposit & Trust Company, Boston. The Dexter & Piscataquis Railroad Company was chartered in 1888 under the laws of the State of Maine, and in December of that year was leased for 999 years to the Maine Central Railroad Company at an annual rental of 5% on the stock, interest on outstanding bonds, and $250 for organization expenses. These bonds are considered a legal investment for savings banks in New England, except Vermont. DEXTER & NEWPORT RAILROAD First Mortgage Currency 4s Dated Se[)tember 1, 1897 :\l:ituring September 1, 1917 Interest payable March 1 and September 1 at National Park Bank, New York, Second National Bank, Boston, First National Bank or Treasurer's ofHce, Portland. Coupon bonds of $1,000. Authorized $175,000 Outstanding $175,000 Per mile . . 12,300 Security: The above bonds are secured by a first mortgage on the Dexter & Newport Railroad Company's line from Newport to Dexter, Me., 14.23 miles. They are f urtlier secured by a first mortgage on future acquisitions. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Maine Cen- tral Railroad Company. Trustee: Portland Trust Company, Portland. [ 428 ] The Dexter & Newport Railroad Company was chartered in 1853 under the laws of the State of Maine. It was leased for 999 years from November 25, 1888, to the Maine Central Railroad Com- pany at an annual rental of 5% on the stock and $250 for organization expenses. The lessee also agreed to pay and discharge all outstanding funded debt. These bonds are considered a legal investnieut for savings banks in New England, except Vermont. BELFAST & MOOSEHEAD LAKE RAILROAD First Mortgage Sinking Fund Currency 4s Dated May 15, 1888 Maturing May 15, 1920 Interest payable May 15 and November 15 at Belfast Savings Bank, Belfast, Me. Coupon bonds of $500 and $1,000. Authorized $150,000 Outstanding $61,000 Per mile . . 1,840 Security : The above bonds are secured by a first mortgage on the Belfast & Moosehead Lake Railroad Company's line from Belfast to Burnham, Me., 33.13 miles. Redemption : The above bonds are redeemable on any May 15 for the sinking fund at par and interest. Sinking fund: Since 1893 the sum of $9,000 has been set aside annually for the payment of interest and the balance remaining is applied to redeem any of the outstanding bonds at not exceeding par and interest. In this way $3,000 bonds are drawn yearly so that the entire issue will have been retired at the expiration of the company's lease. The Belfast & Moosehead Lake Railroad Company was chartered in 1867 under the laws of the State of Maine. From April 27, 1871, it was leased for 50 years to the jNIaine Central Railroad Company at an annual rental of $36,000. These bonds are considered a legal investment for savings banks in Maine, Massachusetts and Connecticut. [ 429 ] PORTLAND & OGDENSBURG RAILWAY First Mortgage Gold 43^s Dated November 2, 1908 Maturing November 1, 1928 Interest payal)le May 1 and November 1 at New York, Boston and Portland. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Authorized $3,000,000 Outstanding $2,119,000 Per mile . . 19,180 Security: The above bonds are secured by a first mortgage on the Portland & Ogdensburg Railway Company's line from Portland, Me., to Lunenburg. Vt., 110.44 miles, and future acquisitions. These bonds are ASSUMED by the Maine Central Railroad Company under terms of its lease. Trustee: Boston Safe Deposit & Trust Company, Bo.ston. The Portland & Ogdensburg Railway Company was chartered in 1886 under the laws of the State of Maine. From August 20, 1888, it was leased for 999 years to the Maine Central Railroad Company at an annual rental of 2% on the capital stock, the lessee also agreeing to assume and pay the lessor's outstanding debts and mortgages. These bonds were quoted in 1910 on a 4.25 basis (iiid) 1911 4.35 December, 1912 4.40 These bonds are considered a legal investment for sa\ings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. SOMERSET RAILWAY First Mortgage Currency 5s Dated July 1, 1887 Maturing July 1, 1917 Interest payable January 1 and July 1 at the National Shawniut Bank, Boston. Coupon bonds of $500 and $1,000. Authorized $225,000 Outstanding $225,000 Per mile . . 5,350 Security: The above bonds arc secured by a first mortgage on 42.08 miles of the Somerset Railway Com- pany from Oakland to Bingham, Me. They are also secured by a first mortgage on the equipment of the line and future acquisitions. These bonds were ASSUMED by the Maine Central Railroad Company. [ 4.S0 ] Equity: The above bonds are prior in lien to $172,500 Somerset Railway Consolidated 4s of 1950 and also to $864,000 Somerset Railway First & Refunding 4s of 1955. They are jjrior to the Maine Central Consolidated Refunding 4s of 1961, which i)rovide for the retirement of this issue. The Somerset Railway Company was cliartcred under the laws of Maine in March, 1903, as the successor to the Somerset Railroad Company. In 1911 it was merged into the Maine Central Railroad Company, which assumed the above bonds. These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont and Massachusetts. SOMERSET RAILWAY Consolidated Mortgage Gold 4s Dated July ril 1, 1907, to the Portland & Rumford Falls Railroad Company, at an annual rental e(|ual to the interest and sinking fund charges on the bonds outstand- ing, dividends of 8% on outstanding capital stock, and $■'^00 for organization expenses. The Portland & Rumford Falls Railroad, in turn, leased to the ^M.iinc Central Railroad Company for a term of 999 years from May 1, 1907, at an annual rental of ^-'''^f^.OOO, liic i)roperties and franchises of the Portland & Rumford Falls Railway and the Rumford Falls &; Raugcley Lakes Railroad Companies. These bonds were quoted in 1910 on a 4.40 basis (bid) 1911 4.45 December, 1912 4.45 These bonds are considered a legal investment for savings banks in Maine and New Hampshire. [ 435 ] PORTLAND & RUMFORD FALLS RAILWAY Collateral Trust Gold 4s Dated February 1, 1904 Maturing February 1, 1934 Interest payable February 1 and August 1 at tlie Portland Trust Company, Portland. Coupon bonds of $500 and $1,000. Authorized $500,000 Outstanding $500,000 Security : The above bonds are a direct obligation of the Portland & Runiford Falls Railway Company. They are secured by a deposit with the trustee of $150,000 6% Mortgage Bonds of the Inter- national Paper Company, and $450,000 5% Mortgage Bonds of the Oxford Paper Company. These bonds are GUARANTEED as to INTEREST by the Portland & Rumford Falls Railroad Company under terms of lease. Redemption: These bonds are redeemable at par and interest February 1, 1924, and annually thereafter. Prior to that date, they are redeemable for the sinking fund at 105 and interest. Sinking fund: The company agrees to set aside each year $10,000 to redeem these bonds at not exceeding 105 and interest. These bonds were quoted in 1909 on a 4.20 basis (bid) 1910 4.2,5 1911 4.25 Trustee: Portland Trust Company, Portland. These bonds are considered a legal investment for savings banks in Maine and New Hampshire. RUMFORD FALLS & RANGELEY LAKES RAILROAD First Sinking Fund Gold 5s Dated October 1, 1897 Maturing October 1, 1937 Interest i)ayable April 1 and October 1 at Old Colony Trust Company, Boston. Coupon bonds of $500 and $1,000, registerable as to principal. Authorized $400,000 Outstanding $400,000 Per mile . . 12,775 Security: The above bonds are secured by a first mortgage on the Rumford Falls & Rangeley Lakes Railroad Company's line from Rumford Falls to Bemis, Me., 27 miles, and Houghton Branch, 4.31 miles, totalling 31 .31 miles. They are further secured by a first mortgage on all the equip- ment of the line and future acquisitions. Sinking fund: In addition to the above security there is a sinking fund of $3,000 per annum to purchase these bonds at a price fixed by the trustee, subject to the approval of the directors of the com- [ 436 ] pany, or if not so purchasable, to be invested in securities which are legal investments for Massachusetts savings banks. Trustee: Old Colony Trust Company, Boston. The Riimford Falls & Rangeley Lakes Railroad Company was organized September 11, 1894, under the laws of the State of Maine. Its road was opened throughout September 1, 1902, and was leased for 1,000 years from April 1, 1907, to the Portland & Rumford Falls Railroad Company at an annual rental of interest and sinking fund charges on bonds outstandmg, 2% per annum divi- dends on capital stock outstanding, and $200 per year for maintaining the lessor company. The Portland & Rumford Falls Railroad Company, in turn, leased the property and franchises of the Rumford Falls & Rangeley Lakes Railroad Company and the Portland & Rumford Falls Railway Company to the Maine Central Railroad Company for 999 years from May 1, 1907, at an annual rental of $328,000. These bonds are considered a legal investment for savings banks in Maine. BRIDGTON & SACO RIVER RAILROAD First Mortgage 4s Dated June 1, 1898 Maturing June 1, 1928 Interest payable June 1 and December 1 at the Trustee's office. Coupon bonds of $500 and $1,000. Authorized $1.S5,000 Outstanding $135,000 Security: The above bonds are secured by a first mortgage on the entire property owned, including the company's line from Harrison to Bridgton Junction, Me., 21.25 miles. Trustee: Union Safe Def)osit & Trust Company, Portland. The Bridgton & Saco River Railroad was chartered in perpetuity, July 19, 1881, under the laws of Maine. Its road was opened for traffic from Bridgton Junction to Bridgton in January, 1883, and the Harrison Extension was completed in August, 1898. On July 12, 1912, at a private sale, the Maine Central Railroad Company purchased almost the entire capital stock of the company, and from that time has operated it as an integral part of its own system. These bonds are considered a legal investment for savings banks in Maine and Massachusetts. [ 437 ] BRIDGTON & SACO RIVER RAILROAD Second Mortgage 4s Dated June 1, 1901 Maturing June 1, 1928 Interest payable June 1 and December 1 at the Trustee's office. Coupon bonds of $500 and $1,000. Authorized $35,000 Outstanding $35,000 Security: The aljove bonds are secured by a second mortgage on the property covered by the First Mortgage 4s of 1928. Trustee: Union Safe Deposit & Trust Company, Portland. MAINE CENTRAL RAILROAD Debenture 4% Notes Dated April 1, 1909 Maturing April 1," 1914 Interest payable January 1, April 1, July 1, and October 1 at Boston, New York and Portland. Coupon notes of $1,000. Authorized $2,000,000 Outstanding $2,000,000 Security: The above notes are a direct obligation of the Maine Central Railroad Company, but are not secured by a mortgage. The proceeds of the above issue were used to refund $1,000,000 maturing notes and to provide for new equipment and betterments to property. These notes are considered a legal investment for savings banks in Rhode Island. MAINE CENTRAL RAILROAD Debenture 4% Notes Dated March 15, 1912 Maturing March 15, 1913 Interest payable March 15 and September 15 at Boston, New York and Portland. Coupon notes of $1,000 and multiples. Authorized $12,000,000 Outstanding $12,000,000 Security: The above notes are a direct obligation of the Maine Central Railroad Company, but are not secured by a mortgage. The proceeds of this issue were used to refund maturing obligations of 1912. These notes are considered a legal investment for savings banks in Rhode Island. [ 4:58 ] PORTLAND TERMINAL COMPANY First Mortgage Gold 4s Dated July 1, 1911 Maturiug July 1, 1961 Interest payable January 1 and July 1, at New York, Boston or Portland. CouiJou bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Coupon and registered bonds are interchangeable. Authorized $10,000,000 Outstanding $4,500,000 Security: The above bonils are a direct obligation of the Portland Terminal Company, and arc secured by a first mortgage on its entire property, including freight and passenger terminal properties in Portland, South Portland, and Westbrook, Me. The value of this property has been placed at $5,700,000. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Maine Central Railroad Company by endorsement. Trustee: Fidelity Trust Company, Portland. The Portland Terminal Company was incoqjorated under tlie laws of Maine on Felnuary 15, 1887, as the Portland Union Railway Station Company. On March 23, 1911, its name was changed to the present one, with enlarged powers. The capital stock of the company is owneil jointly bj' the Boston & Maine Railroad and IVIaine Central Railroad Companies, who pay as rental a sum sufficient to provide for interest and sinking fund charges on the company's obligations. [431) ] MICHIGAN CENTRAL RAILROAD COMPANY MICHIGAN CENTRAL RAILROAD COMPANY HISTORY The original line of the Michigan Central Railroad Company consisted of a road between Detroit and Kalamazoo, Michigan, 144 miles, which had been built by the State of Michigan. The Michi- gan Central Railroad Company was incorporated in 1846 to acquire this line, the purchase price being $2,000,000. Various extensions were built and opened as completed, one in 1848 extending the line to Niles, Michigan, 47 miles; another in 1850 to Michigan City, Indiana, 87 miles. In May, 1852, the line was opened throughout from Detroit to Kensington, Illinois. December 80, 1901, the Michigan Central Railroad Company was reincorporated under the General Railroad Law of the State of Michigan, and surrendered its original charter, which had been repealed by a special Act of the Miciugaii Legislature the year before. In connection with this new charter, important litigation has been pending for a number of years relative to the company's claim against the State growing out of the repeal of its special charter. The counterclaim of the State against the company for alleged non-payment of back taxes during the years 1855 to 1893 was ad- justed in June, 1910, by the payment to the State of $125,000. Since 1901 several important additions have been made to the system. Effective January 1, 1904, the Michigan Central Railroad Company leased the property operated by the Canadian Southern Railway Company for 999 years. The Michigan Central agreed to pay interest on the Canadian Southern bonds, and dividends on its $15,000,000 capital stock at the rate of 2>2% annu- ally until January 1, 1910, and 3% thereafter. Of this stock, the Michigan Central owns $7,810,000. In February, 1902, the Michigan Central Railroad Company, jointly with the Lake Shore & Michigan Southern Railway CoTupany, took over the Detroit, Toledo & Milwaukee Railroad, 133 miles. In January, 1905, the Michigan Central assumed the operation of that part of the hitter's line extending from Homer to Allegan, 0(5 miles, agretnng to j)ay all maintenance charges, taxes, and assessments during the corporate existence of the Detroit, 'i'oicdo & Milwaukee Railroad Company. In January, 190(5, the Michigan Central Railroad leased directly the property of the Toledo, Canada Southern & Detroit Railway Company for the perioil of its corporate existence. In the same year the company accjuired $3,000,000 common stock of the Chicago, Indiana & Southern Railroad Company. The balance, $17,000,000, was acquired by the Lake Shore & Michigaii Southern Rail- way Conipanj'. In December, 1900, a majority of the capital stock of the Chicago, Kalamazoo & Saginaw Railway Company was acquired. The latter company owns a railroad from Pavilion to Woodbury, Michigan, 55 miles, and in May, 1907, it purchased the entire capital stock of the Detroit & Charlevoix Railroad Company, owning a line from Frederick to East Jordan, Michigan, 45 miles. The Michigan Central Railroad Company controls two important companies by ownership of their entire capital stocks, namely, the Detroit Belt Line Railroad and the Detroit River Tunnel Company. The former was chartered in May, 1909, with a capital stock of $100,000. It owns val- uable terminal and connecting railroad properties in Detroit, which the Michigan Central Railroad Company began to operate under an agreement dated July 20, 1909. The Detroit River Tunnel Company was formetl in 1906 to construct a tlouble tunnel under and across the Detroit River. The work of construction was begun in October, 1906, and just four years later was put into experimental use for through freight traffic. It has proved an entire success, earning during its first fiscal year an amount sufficient to defray maintenance and operating expenses, [443 ] taxes, interest on its bonds, a dividend of 2% on its capital stock, and leave a surplus of $160,000. The $30,000,000 Detroit River Tunnel Company Terminal & Tunnel Gold Bonds, bearing the date of INIay 1, 1911, as issued, have been guaranteed as to principal and interest by the Michigan Central Railroad Company. Together with the New York Central & Hudson River Railroad Company, the Lake Shore & Michigan Southern Railway Company, the Cleveland, Cincinnati, Chicago & St. Louis Railway Com- pany and the Chicago, Indiana & Southern Railroad Company, the Michigan Central has partici- pated in the issues of 1907, 1910, 1912, and 1913 of "New York Central Lines Equipment Trust Certificates." The obligation of these issues has been divided pro rata among the above, also the equipment purchased by the proceeds of the certificates. (See New York Central & Hudson River Railroad Company.) The Michigan Central was responsible, December 31, 1911, for $2,864,679 of the Certificates of 1907, and $4,747,375 of the Certificates of 1910 outstanding. The certificates represent in each case 90% of the cost of the equipment which they cover. A majority of the capital stock of the Michigan Central Railroad Company is owned by the New York Central & Hudson River Railroad Company. In January, 1912, the latter owned $16,819,300 of the stock of this road, which it had acquired in 1898 by the exchange of its 3>2% Collateral Trust Gold Bonds at the rate of $115 in bonds for each $100 in stock. In point of fact the Michigan Central is little more than one of the larger divisions of the New York Central. Nominally, it is operated separately and owned separately, but it has much the same directors and ofiicers as the New York Central. PROPERTY The annual report of the Michigan Central for the fiscal year ending December 31, 1911, shows the following mileage: Miles owned in fee 270.07 Miles of proprietary lines 343.31 Miles operated under lease 1,110.20 Miles operated under trackage arrangements 93.18 Total miles operated 1,816.76 The mileage operated in 1910 was 1,803.29 miles. There were no additions during the year, the increase of 13.47 miles being an account of corrections due to remeasurement. The company's lines extend from Buffalo, across southern Ontario, to Detroit and Toletlo (Canadian Southern Lines). From Detroit, a line runs northerly through central Michigan to Mackinaw City, and the original line of the company extends from Detroit to Joliet and Chicago, via Kalamazoo. As the name implies, the bulk of the company's mileage (1,216 miles) lies in Michigan, whose population in 1890 was approximately 2,094,000, and, in 1912, 2,810,000. [ 444 ] CAPITALIZATION December 31, 1911, the capitalization of the Michigan Central Railroad Company was approxi- mately as follows: Common stock $18,738,000 Funded debt 41,269,055 Nominal capital of the IMicliigan Central Railroad $60,007,055 Leased line bonds 22,401,000 Total nominal capitalization $82,408,055 Rentals capitalized at 5% 32,100,000 Gross capitalization $114,508,055 Securities owned 9,373,719 Net capitalization $105,134,336 Net capital per mile operated $57,866 Average miles operated 1,816.76 Net income to net capital 10.1% Fixed charges to net income 80.0% Margin of safety 20.0% The company's capital stock outstanding per mile of road owned (270 miles) was $69,382, as compared with the Lake Shore & Michigan Southern Railway's figure of $57,405 and that of the Cleveland, Cincinnati, Chicago & St. Louis Railway, $31,708. The funded debts of the tliree com- panies, based on miles of road owned, compare as follows: Michigan Central $110,511 Lake Shore 192,620 C. C. C. & St. L 48,548 The net capitalization of these tliree similar properties per mile of road operated on December 31, 1911, together with the ratio of total net income to net capitalization, was approximately as follows: Net Net income to capitalization net capiUil Michigan Central $57,866 10.1% Lake Shore 144,249 10.7 C. C. C. & St. L 69,597 6.3 Although not earning as much as the Lake Shore, it would seem that the INIichigan Central is not over-capitalized so far as earnings are concerned. The average net capitalization of the com- pany for the decade ending December 31, 1911, was in the neighborhood of $44,300 per mile, upon which an average of 8% was earned. As will be noted above, the margin of safety for the company's fixed charges, including the in- terest on its bonds, was but 20%. The company's securities have always been considered a safe good investment, and in spite of this narrow margin, because of the great stability of earnings which the company records and because of the high maintenance charges which can be reduced if necessary. [ 445 ] CHARACTER OF TRAFFIC Nearly 70% of the Michigan Central's business is freight. Of this, 38% represents products of mines, especially bituminous and anthracite coal. Upwards of 25% represents the carriage of manufactured articles, a profitable class of freight. The following table shows the nimiber of revenue tons carried by the Michigan Central for the five years ending 1911 : Products of 1911 1910 1909 1908 1907 Tons Tous Tons Tons Tons Agriculture . 2,455,882 2,238,490 2,389,261 2,373,045 2,172,775 Animals . . . 780,176 689,069 766,389 826,606 935,581 Mines . . . 7,318,605 7,098,050 6,133,308 5,355,084 6,095,6.35 Forests . . . 2,329,004 2,542,891 2,271,789 1,703,955 2,129,055 Manufactures 4,361,304 4,212,453 4,056,075 3,096,461 3,917,389 Miscellaneous 1,483,782 1,595,525 18,370,478 1,201,732 16,818,554 992,313 14,347,464 1,287,728 Total tonnage 18,728,753 16,538,163 Given below are the freiglit densities, train load tons, freight earnings and the average rates per ton per mile of the Michigan Central for the years 1907 to 1911 inclusive. It will be seen that, with a practically stationary rate for the period, earnings varied as the company's density figures. In 1911 the Michigan Central's freight earnings were $250,000 greater than in 1910, although nearly $400,000 smaller than the record earnings of 1907. Year Freight Train Freight Average rate density load earnings per ton tons per mile 1907 1,734,098 420 $19,926,803 $.0064 1908 1,508,660 379 16,947,001 .0063 1909 1,670,374 400 18,267,530 .0063 1910 1,724,972 419 19,282,288 .0063 1911 1,700,002 424 19,538,684 .0064 Nearly one-quarter of the company's business is passenger. With the exception of 1908, when there was a decline in local and interline passenger traffic, there have been steady increases reported in passenger density — the number of passengers carrietl one mile jier mile of road operated — pas- senger train load, and earnings, since 1907. Year Passenger Number of Passenger Average rate density passengers earnings per passenger per train per mile 1907 183,911 52 $6,541,102 $.0205 1908 181,791 55 6,0:50,419 .0195 1909 200,702 54 6,655,698 .0195 1910 217,085 56 7,404,475 .0195 1911 219,703 57 7,607,052 .0198 [ 446 ] EARNINGS Michigan Central's gross and net earnings for the five years i ending 1911 are as fo Year Miles operated Earn! Gross ngs Per mile Earn: Net '°^^ Per mile Operating rate 1907 . . . 1,746 1908 . . . 1,746 1909 . . . 1,746 1910 . . . 1,803 1911 . . . 1,817 $28,547,109 24,918,487 27,415,467 29,694,815 30,164,490 $16,350 14,272 15,702 16,469 16,601 $5,415,359 5,913,135 8,915,938 8,065,909 9,418,259 $3,102 3,388 5,108 4,474 5,186 81.03% 76.27 67.48 72.84 68.78 All the revenue-producing departments of the company reported decreases in gross earnings in 1908. Freight earnings fell nearly $3,000,000, due to decreased movement in nearly all commodi- ties; passenger and express earnings together declined over $500,000. Curtailments of expense were effected through general economies. $3,000,000 was taken from the maintenance accounts and $1,100,000 less was spent for transportation costs than in 1907, reducing the operating ratio to 76.27% as compared with the relatively high figure of 81.03% in 1907. From 1909 to 1911 substantial increases were reported in gross earnings and, with the excep- tion of 1910, in net earnings. During the fiscal year 1911 the Michigan Central showed the largest gross and net earnings it had ever reported. Gross earnings increased $470,000 and operating ex- penses decreased about $880,000, reducing the company's operating ratio to 08.78% as above. MAINTENANCE The Michigan Central Railway Company has spent the following amounts for maintenance of way and equipment since 1907: Year Maintenance Total Per mile Way Equipment maintenance 1907 $4,991,923 $4,070,277 $9,062,200 $5,190 1908 3,061,374 2,978,743 6,040,117 3,459 1909 3,458,165 3,756,581 7,214,746 4,131 1910 4,035,260 4,124,365 8,159,625 4,525 1911 3,549,204 3,800,772 7,349,976 4,044 A glance at the per mile column above will show that the Michigan Central has spent large sums for maintenance, especially in 1907, when nearly $5,200 of income per mile was put directly back into the property. During the period in question the company spent nearly $38,000,000 for main- tenance of way and equipment, an average of over $7,500,000 per year, or $4,270 per mile. During the decade the traffic density and the maintenance charges of the Michigan Central, the Lake Shore, and the Big Four, similar properties, have averaged as follows : Ten-year average Traffic Maintenance density per mile Michigan Central 1,730,894 $4,270 Lake Shore 3,736,996 8,245 C. C. C. & St. L 1,608,160 3,566 Relatively speaking, the Michigan Central's showing is the best. The Lake Shore's traffic density is over llO^o greater than that of the Michigan Central's, while the former spent 93% more than the latter. The Michigan Central, with a traffic density of but 123,000 more than the Big Four, spent $700 a mile more than the latter. [447 ] ADDITIONS AND BETTERMENTS Not until 1909 did the company tabulate the amounts it spent for additions and betterments. The following table shows how much has been spent since then and charged to "Cost of Property and Equipment": Year Additions and betterments Total Main line Leased and pro- prietary lines 1909 $1,069,702 $872,734 $1,942,436 1910 10,223,514 1,001,234 11,224,748* 1911 176,754 544,202 720,954 $13,888,138 Since June 30, 1907, the Michigan Central has spent $3,756,123 of income for additions to property. This figure appears on the balance sheet of December 31, 1911, in accordance with the ruling of the Interstate Commerce Commission. DIVIDENDS Since 1895 the company has paid the following dividends: Year Rate Year Rate 1895-1906 4% 1908 5% 1907 6 1909-1912 6 Previous to 1895 the Michigan Central paid somewhat higher dividends than 4%, but the pay- ments were not regular. On December 31, 1911, the company showed a free surplus of $11,228,059, which, together with the surplus of $3,756,123, appropriated for additions to property, amounted to $14,984,182, or 80% of the company's outstanding capital stock. STATISTICS Following are the capitalization, earnings and traffic statistics of the Michigan Central Railroad, based on the average miles operated for the year 1900 and for the years 1905 to 1911 inclusive: * The 1910 figures include new equipment purchased with the proceeds of the Equi|)mpnt Trust Certificates. [ 448 ] MICHIGAN CENTRAL RAILROAD Fiscal CapiUil Funded Kentals Gross Owned by Net Average Extra year stock debt @. 5% capital company capital miles mam $11,460 $25,680 $5,934 $43,074 operated 1,635 track 1900 $466 $42,608 262 1905 10,738 26,416 6,432 43,586 4,117 39,409 1,745 439 1906 10,738 27,316 6,490 44,544 6,208 38,336 1,745 518 1907 10,732 33,886 5,844 50,462 7,186 43,276 1,746 547 1908 10,732 35,465 5,844 50,041 4,660 45.381 1.746 547 1909 10,732 36,976 5,844 53,552 5,360 48.192 1,746 547 1910 10,392 35,047 6,493 52,532 4,791 47,741 1,803 610 1911 10.312 35,041 17,672* 63,025 5,159 57,866 1.817 610 Fiscal Gross Ma ntenanre Transportation Net Other Total Fixed .Surplus year operatmg and general operatmg income net charges available revenue Way $1,616 Equipment $1,472 expense revenue $27 $2,452 $1,940 for dividends 1900 $10,229 $4,716 $2,425 $512 1905 13,343 1,959 2.513 6,338 2,533 181 2,714 2,155 559 1906 15,057 2.000 3,176 7.277 2,604 230 2,834 2,269 565 1907 16,350 2.859 2.331 8.058 3,102 402 3,504 2,513 991 1908 14,272 1,753 1,700 7,425 3,388 375 3,763 2,830 933 1909 15,702 1,980 2,151 6.463 5,108 539 5,447 3,686 1,761 1910 16,469 2,238 2,287 7,470 4,474 606 5,080 4,127 953 1911 16.601 1.953 2.091 7,372 5,186 649 5.835 4,668 1,167 Fiscal Divi- Other Surplus Operating Total main- Conducting Fixed Gross Net Per cent year dends charges expenses tenance transporta- charges eammgs income earned on to to gross to gross tion to gross to gross to gross to net capital $453 income $49 $10 earnings eammgs eammgs earnings capital capital 5.7% stock 1900 76.28% 29.2% 47.1% 19.0% 23.7% 4.5% 1905 424 135 81.03 33.4 47.0 16.2 30.6 6.8 5.2 1906 5.37 28 82.70 34.2 48.5 15.1 33.8 7.4 5.3 1907 860 131 81.03 32.6 49.4 15.4 .32.4 8.1 9.2 1908 640 293 76.27 24.3 52.0 20.0 28.5 8.3 8.7 1909 640 314 807 67.48 26.3 41.2 23.4 29.3 11.3 16.4 1910 623 138 192 72.84 27.3 45.5 25.1 31.4 10.7 9.1 1911 618 549 68.78 24.4 44.4 26.1 26.3 10.1 14.5 Fiscal year Train mile earnings (gross) Maintenance train mile Way Equipmen $.194 $.177 Conducting transpor- tation per revenue train mile $.567 Train earnings (net) Rate per Per passenger mile Per ton Freight density Train load revenue 228 Freight to all traffic 71%, Passenger freight and company cars 1900 $1.23 $.29 $.0219 $.0059 1,226,974 14,827 1905 1.96 .287 .369 .930 38 .0206 .0062 1,481,375 418 70 17,340 1906 2.06 .273 .434 .994 36 .0210 .0063 1,668,100 439 70 20,024 1907 2.16 .377 .308 1.064 41 .0205 .0064 1,734,098 420 70 20,394 1908 2.00 .246 .239 1.041 47 .0195 .0063 1,508,660 379 08 20,074 1909 2.10 .265 .288 .866 68 .0195 .0063 1,670,374 406 67 19,780 1910 2.19 .297 .303 .991 59 .0198 .0063 1,724,972 419 65 19,450 1911 2.24 .264 .282 .996 70 .0198 .0064 1.700,002 424 65 18.766 Increase ilue to tolls on the Detroit Uiver Timnc [ 449 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Michigan Central Railroad System, together with the bases on which they have sold during the decade ending December 31, 1912: MICHIGAN CENTRAL RAILROAD First Mortgage 33^s Dated May 1, 1902 Maturing May 1, 1952 Interest payable May 1 and November 1 at the Guaranty Trust Company, New York. Coupon bonds of ■ Authorized $18,000,000 ,000, registerable as to principal or fully registerable. Provisions of issue : Security : Trustee : Outstanding $14,000,000 Per mile . . 51,850 Of the $18,000,000 authorized, $14,000,000 are outstanding as above, and the balance, $4,000,000, have been reserved for additions and improvements, with restrictions. The above bonds are secured by a first mortgage on the company's road from Detroit, Mich., to Kensington, 111., via Kalamazoo, Mich., 270.07 miles, together with terminal properties on the line and future acquisitions. The mileage mortgaged above is the best part of the comi)any's entire property. Guaranty Trust Company, New York. These bonds sold in 1903 on a 3.50 to 3.60 basis 1904 3.62 3.65 1905 3.50 3.60 1906 3.55 3.72 1907 3.75 3.85 1908 3.87 4.10 1909 3.80 4.05 1910 4.00 4.20 1911 4.05 4.15 1912 4.20 4.25 These bonds are considered a legal investment for savings banks in New Enghmd. MICHIGAN CENTRAL RAILROAD Detroit & Bay City Railroad First Mortgage 5s Dated March 10, 1881 Maturing March 1, 1931 Interest payable on cou])on bonds on March 1 and September 1; on registered bonds March 1, June 1, September 1 and December 1, at the Union Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or exchangeable for registered bonds. Registered bonds of $1,000, $5,000 and $10,000. Authorized $4,000,000 Outstanding $4,000,000 Per mile . . 23,400 Security: The above bonds are a direct obligation of the Michigan Central Railroad Company, and are secured by a first mortgage on 170 miles of the Detroit & Bay City Railroad's lines, including I 452 ] the one from Detroit to Bay City, Mich., 107 miles. The above mortgage was executed jointly by the Michigan Central Railroad and the Detroit & Bay City Railroad Companies. Trustee: Union Trust Company, New York. The Detroit & Baj- City Railroad was organized in May, 1871. Its main line was opened through- out July 31, 1873. Interest payments on the company's funded debt were defaulted in May, 1875, and the property was sold under foreclosure, February 12, 1881, being purchased for the account of the Michigan Central Railroad Company, which took possession April 1, 1881, and has operated it ever since. These bonds sold in 1905 on a 3.75 basis 1910 4.30 (bid) 1911 4.25 (bid) December, 1912 4.50 (bid) These bonds are considered a legal investment for savings banks in New England. MICHIGAN CENTRAL RAILROAD Jackson, Lansing & Saginaw Railroad First Mortgage 33 ^s Dated September 1, 1901 Maturing September 1, 1951 Interest payable ]March 1 and September 1 at the Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $2,000,000 Outstanding $1,723,000 Per mile . . 4,650 Trovisions of Of tiie $2,000,000 authorized and issued, $1,723,000 are outstanding as above, and $277,000 issue: ha\c been purchased and retired by the Land Grant Trustees. Security: The above bonds are a direct obligation of the Michigan Central Railroad C'ompany, and are secured by a first mortgage on 370.07 miles of the Jackson, Lansing & Saginaw Railroad's lines, including the one from Jackson to Mackinaw City, Mich., 296 miles. The above mortgage was executed by the Jackson, Lansing & Saginaw Railroad Company. Trustee: Guaranty Trust Company, New York. The Jackson, Lansing & Saginaw Railroad Company was organized February 24, 1865, in Mich- igan, to take over the incomplete Amboy, Lansing & Traverse Bay Railroad, which had been opened between Owosso and Lansing, Michigan, in 1863. It was leased in perpetuity to the Michigan Central Railroad Company, commencing September 1, 1871. By an agreement the latter possesses and operates the road, and owns $674,300 of the $2,000,000 capital stock of the company. In December, 1912, a 4.15 basis was asked for these bonds. The above bonds are considered a legal investment for savings banks in New England. [453 ] MICHIGAN CENTRAL RAILROAD Kalamazoo & South Haven Railroad First Mortgage Currency 5s Dated November 1, 1889 Maturing November 1, 1939 Interest payable May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Registered bonds of $1,000 and $5,000. Authorized $700,000 Outstanding $700,000 Per mile . . 17,500 Security: The above bonds are a direct obligation of the Michigan Central Railroad Company, and are secured by a first mortgage on the Kalamazoo & South Haven Railroad Company's line from Kalamazoo to South Haven, Mich., 39.5 miles, together with future acquisitions. The above mortgage was executed jointly by the Michigan Central Railroad and the Kalamazoo & South Haven Railroad Companies. Trustee: Guaranty Trust Company, New York. The Kalamazoo & South Haven Railroad was organized April 15, 1869, in Michigan. Its line was opened for traffic, January 2, 1871, when it was operated under a lease by the Michigan Cen- tral Railroad Company, who guaranteed interest on the company's bonds and assumed its funded obligations. The latter owns $257,500 of the $325,400 capital stock of the Kalamazoo & South Haven Railroad. These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts and Connecticut. MICHIGAN CENTRAL RAILROAD Michigan Air Line Railroad First Mortgage Currency 4s Dated January 1, 1890 Maturing January 1, 1940 Interest payable January 1 and July 1 at the Union Trust Company, New York. Coupon bonds of $1,000. Registered bonds of $1,000 and $5,000. Authorized $2,600,000 Outstanding $2,600,000 Per mile . . 22,600 Security : The above bonds are a direct obligation of the Michigan Central Railroad Company, and are secured by a first mortgage on the Michigan Air Line Railroad's line from Jackson, Mich., to South Bend, Ind., 115.16 miles, together with future acquisitions. These bonds were executed jointly by the Michigan Central and the Michigan Air Line Railroad Companies. Trustee: Union Trust Company. The Michigan Air Line Railroad was organized August 25, 1868, and consolidated with the St. Joseph Valley Railroad Company in October, 1870. Its line was thrown open for traffic in February, [ 454 ] 1871, from which time it was leased for 999 years to the Michigan Central Railroad Company at a rental equal to the interest accruing on issued bonds. The latter owns $334,262 of the $392,750 capital stock of the Michigan Air Line Railroad Company. These bonds sold in 1909 on a 4.00 to 4.08 basis 1910 4.15 basis (bid) 1911 4.10 (asked) 1912 4.12 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Connecticut. MICHIGAN CENTRAL RAILROAD Joliet & Northern Indiana Railroad First Mortgage 4s Dated July 10, 1907 Maturing July 10, 1957 Interest payable January 10 and July 10 at the Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Coupon and registered bonds interchang Authorized $3,000,000 Outstanding $1,500,000 Per mile . . 33,330 Security : The above bonds are a direct obligation of the Michigan Central Railroad Company, and are secured by a first mortgage on the Joliet & Northern Indiana Railroad's line from Lake Sta- tion, Ind., to Joliet, 111., 45 miles, together with future acquisitions. The above mortgage was executed jointly by the Michigan Central and the Joliet & Northern Indiana Railroad Companies. Trustee: Guaranty Trust Company, New York. The Joliet & Northern Indiana Railroad Company was leased from the date of its completion in September, 1854, in perpetuity, to the Michigan Central Railroad Company, at a rental equal to 5% on the company's outstanding stock, interest on the company's bonds, and organization expenses. The entire capital stock of this company is owned by the Michigan Central Railroad Company. These bonds were quoted in December, 1912, on a 4.30 basis. These bonds are considered a legal investment for all savings banks in New England except Vermont. [ 455 ] MICHIGAN CENTRAL RAILROAD Grand River Valley Railroad First Mortgage 4s Dated September 1, 1909 Maturing September 1, 1959 Interest payable March 1 and September 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and multiples. Coupon and registered bonds interchangeable. Authorized $4,500,000 Outstanding $1,500,000 Per mile . . 17,850 Provisions of Of the total amount authorized, $1,500,000 are outstanding as above, and the balance, issue: $3,000,000, lias been reserved for improvements, additions and extensions, with restrictions. Security: The above bonds are a direct obligation of the Michigan Central Railroad Company, and are secured by a first mortgage on the Grand River Valley Railroad line from Rives Junction to Grand Rapids, Mich., 83.79 miles, together with future acquisitions. The above mortgage was executed jointly by the Michigan Central and the Grand River Valley Railroad Companies. Trustee: Guaranty Trust Company, New York. The Grand River Valley Railroad was chartered under the laws of the State of Michigan in 1846, and opened for traffic in the spring of 1870. It was leased from the date of its opening to the Mich- igan Central Raihoad Company, which pays as a rental the interest on the company's bonds and 5% on its stock. The Michigan Central Railroad Company owns $156,900 of its $491,200 capital stock. The.se bonds were quoted in Deceml)er, 191!^, on a 4.35 basis (bid). The.se bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecticut and Rhode Island. MICHIGAN CENTRAL RAILROAD Twenty-year Debenture Gold 4s Dated April I, 1909 Maturing April 1, 1929 Interest payable April 1 and October 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000, and multiples of $10,000. Authorized $25,000,000 Outstanding $7,034,000 Security: The above bontls arc a direct obligation of the Michigan Central Railroad Company, but are not secured by a mortgage. The company, however, agrees in its indenture to make no new mortgage upon its road without equally securing thereby the bonds of this issue. Trustee: Guaranty Trust Comj)any, New York. [ 456 J These bonds were sold in 190!) on a 4.35 to 4.G5 basis 1910 4.60 4.90 1911 4.60 4.80 1912 4.70 5.00 These bonds are considered a legal investment for savings banks in New Hampshire. TOLEDO, CANADA SOUTHERN & DETROIT RAILWAY First Mortgage 4s Dated January 2, 1906 Maturing January 1, 1956 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Coupon and registered bonds interchangeable. Authorized $4,500,000 Outstanding $3,100,000 Per mile . . 52,550 Provisions of Of the total amount authorized, $1,600,000 are outstanding in the hands of the public, and issue: $1,500,000 are owned by the Canada Southern Railway, upon which no interest is i)aid. The balance, $1,400,000, has been reserved for extensions, imi)rovements and additions, with restrictions. Security : The above bonds are secured by a first mortgage on the Canada Southern Railway's line from West Detroit to Canada Southern Junction, O., 59 miles. These bonds were issued to the Canada Southern Railway Company in payment of old bonds and arrears of interest thereon. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by endorsement by the Michigan Central Railroad Company. Trustee: Guaranty Trust Company, New York. The Toledo, Canada Southern & Detroit Railway was chartered July li), 1872, under the laws of Michigan and Ohio, as the consolidation of the Detroit & State Line Railroad Company of jNIicli- igan and the Jinietion Railway Company of Ohio. It was leased in perpetuity to the Michigan Central Railway Company January 2, 1906, at a rental equal to the principal and interest on the above bonds. These bonds were (pioted in 1909 on a 4.30 basis (bid) 1910 4.35 1911 4.35 December, 1912 4.37 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 457 BATTLE CREEK & STURGIS RAILWAY First Mortgage 3s Dated December 1, 1889 Maturing December 1, 1989 Interest payable June 1 and December 1 at the Union Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $500,000 Outstanding $500,000 Per mile . . 12,200 Security : These bonds are secured by a first mortgage on the company's line from Battle Creek to Sturgis, Mich., 41 miles, together with all property now owned or hereafter acquired, and all franchises and incomes. These bonds are GUAEANTEED as to PRINCIPAL and INTEREST by endorsement by the Michigan Central Railroad Company. The Lake Shore & Michigan Southern Railway GUARANTEES bonds numbered 1 to 79 inclusive. The above mileage is operated by both the Michigan Central Railroad and the Lake Shore & Michigan Southern Railway Companies, the former operating 33.8 miles from Battle Creek to Findlay, Mich., the latter 7.2 miles from Findlay to Sturgis. Trustee: Metropolitan Trust Company, New York. The Battle Creek & Sturgis Railway was chartered November 14, 1889, under the laws of the State of Michigan, being organized to take over the property of the St. Louis, Sturgis & Battle Creek Railway Company which had been placed in the hands of a receiver in January of that year. The entire capital stock of the Battle Creek & Sturgis Railway Company is owned by the Michigan Cen- tral Railroad and the Lake Shore & Michigan Southern Railway Companies, the former holding $417,500, and the latter $82,500 of the $500,000 stock. These bonds were quoted in 1909 on a 4.35 basis (bid) 1910 4.35 1911 4.35 December, 1912 4.55 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 458 ] BAY CITY & BATTLE CREEK RAILWAY First Mortgage 3s Dated December 1, 1889 Maturing December 1, 1989 Interest payable June 1 and December 1 at the Union Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,800,000 Outstanding $250,000 Per mile . . 13,890 Provisions of Of the amount outstanding, as above, $202,000 are held by the public, and $48,000 are in the issue: treasury of the Michigan Central Railroad Company. The balance, $1,550,000, is issuable for new construction at $15,000 a mile. Security: The above bonds are secured by a first mortgage on the company's line, from Bay City to Battle Creek, Mich., 18 miles, together with all property of every kind acquired or hereafter acquired, and also all rights and franchises. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by endorsement by the Michigan Central Railroad Company. Trustee: Metropolitan Trust Company, New York. The Bay City & Battle Creek Railway Company was chartered November 14, 1889, under the laws of Michigan. Its road was opened for traffic in December, 1889, and it passed under the control of the Michigan Central Railroad Company June 1, 1890, through the ownership of the company's entire capital stock. These bonds were quoted in 1909 on a 4.35 basis (bid) 1910 . 4.35 1911 4.35 December, 1912 4.55 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. CANADA SOUTHERN RAILWAY First & Refunding Consolidated Mortgage 5s Dated October 1, 1912 Maturing October 1, 1962 Interest payable April 1 and October 1 at New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Coupon and registered bonds interchangeable. Authorized $40,000,000 Outstanding $22,500,000 Provisions of Of the total amount authorized $22,500,000 are outstanding as above, $130,000 have been issue: reserved to retire prior liens, and $17,370,000 have been reserved for improvements and extensions, limited by the terms of the indenture to $3,000,000 annually. [ 459 ] Security: The above bonds are a direct obligation of the Canada Southern Railway Company, and are secured by a direct first lien on 366.24 miles of road, including the lines from Windsor to Suspension Bridge 226.18 miles, St. Clair Junction to Courtrigge 62.63 miles, and Niagara to Fort Erie 30.6 miles, all in Ontario. They are further secured by a second mortgage on 13.80 miles from Comber to Leamington covered by the first lien of the Leamington & St. Clair First Mortgage 4s of 1945. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Michigan Cen- tral Railroad Company. Trustee: Guaranty Trust Company, New York. The Canada Southern Railway Company was chartered February 28, 1868, under the Laws of the Dominion of Canada. The entire line was open for traffic November 15, 1873. On January 1, 1883, the Michigan Central Railroad Company began to operate the property of the Canada Southern Railway Company, under a s])eciai agreement which terminated January 1, 1904. On the same day the Michigan Central Railroad Company took a lease of the property for 999 years, agreeing to pay as rentals, dividends at the rate of 2^% per annum until January 1, 1910, and 3% per annum thereafter, at the same time assuming all the obligations of the company. The Michigan Central Railroad Company owns $7,810,000 of the $15,000,000 capital stock of the Canada Southern Railway Company. J. P. Morgan & Companj' offered $20,000,000 of the above bonds to the holders of First Mortgage 5s and Second Mortgage 5s maturing respectively January 1, 1913, and March 1, 1913, in exchange for the same. The balance. $2,500,000, was offered to the public at 106 and interest. These bonds are considered a legal investment for savings banks in Rhode Island. LEAMINGTON & ST. CLAIR RAILWAY First Mortgage 4s Dated October 1, 1805 ALaturing October 1, 1945 Interest payable April 1 and October 1 at the Bank of Montreal, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $130,000 Outstanding $130,000 Per mile . . 9,300 Security: The above bonds are secured by a first mortgage on the Leamington & St. Clair Railway from Leamington to Comber Station, Ontario, 13.80 miles; also on lands, buildings, rolling stock, incomes and franchises now owned or hereafter acquired. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Canada Southern Railway Company by endorsement. Equity: The.se bonds are prior in lien to the Canada Southern Railway First 5s of 1962. The Leamington & St. Clair Railway Company was chartered March 2, 1887. The road was opened throughout in November, 1888. In June, 1895, the company was purchased by the Canada [ 460 ] Southern Railway Companj', and was merged in that road in 1904. The Canada Southern Railway Company owns the entire capital stock and guarantees principal and interest on the bonds by endorsement. DETROIT RIVER TUNNEL COMPANY Detroit Terminal & Tunnel First Mortgage 4}/is Dated May 1, 1911 Maturing May 1, 1961 Interest payable May 1 and November 1 at New York. Coupon I)onds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Coui)on and registered bonds interchangeable. Authorized $30,000,000 Outstanding $14,000,000 Provisions of Of the $30,000,000 authorized, $14,000,000 are outstanding as above, and the balance, issue: $16,000,000, has been reserved for additions, improvements, extensions, additional real estate, equipment or other property, with restrictions. Security: The above bonds are secured by a first mortgage on all terminal and tunnel property now or hereafter constructed, and all property used in connection therewith; also on interest in any agreement made between the company and the Michigan Central Railroad Company for main- tenance and operation of this property; also on all incomes and franchises. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Michigan Central Railroad Company by endorsement. Trustee: Guaranty Trust Company, New York. The Detroit River Tunnel Company was formed in 1906 to construct a double tunnel under and across the Detroit River. In 1910 the work was completed and the tunnel put in operation. These bonds were quoted in December, 1912, on a 4.02 basis (bid). These bonds are considered a legal invostment for savings banks in New Ham[)s]iire and Rhode Island. [ 461 ] NEW YORK CENTRAL & HUDSON RIVER RAILROAD COMPANY NEW YORK CENTRAL & HUDSON RIVER RAILROAD COMPANY HISTORY The New York Central & Hudson River Railroad Company, one of the most important in the United States, actually operates, directly and through controlhng interests, over 12,700 miles of main track, including the properties of the Lake Shore & Michigan Southern Railway, the Michi- gan Central Railroad, the New York, Chicago & St. Louis Railway, the Lake Erie & Western Rail- road, the Cleveland, Cincinnati, Chicago & St. Louis Railway, the Chicago, Indiana & Southern Railroad, the Cincinnati Northern Railroad, the Pittsburgh & Lake Erie Railroad, the Toledo & Ohio Central Railway, besides its own system of directly operated and leased lines located east of Buffalo and Lake Erie. The system covers a thickly settled territory, including most of the important commercial centres in the States of New York, Ohio, Indiana, Illinois and Michigan. It serves the cities of New York, Chicago, St. Louis, Boston, Cleveland, Pittsburg, Detroit, Buffalo, Columbus, Cincin- nati, etc. The New York Central & Hudson River Railroad Company proper was organized November 1, 1869, as the consolidation of the New York Central Railroad and the Hudson River Railroad Companies. The former had been organized as early as 1853 to consolidate the railroads between Albanj' and Buffalo, New York. The Hudson River Railroad Company was chartered May 12, 1846, and the road was thrown open to traffic over its entire length from New York to Albany in the fall of 1851. From the outset the New York Central & Hudson River Railroad Company began building up a system of leased lines. The New York & Harlem Railroad, which had been chartered in 1831, was leased for 400 years from April 1, 1873, its rental being 8% on the company's stock and interest on its bonds. The Spuyten Duyvil & Port Morris Railroad was leased from November, 1871, to December 31, 1970, at a rental of 8% on its cost. The Dunkirk, Allegheny Valley & Pittsburgh Railroad, the Syracuse Junction Railroad, the Junction Railroad of Buffalo, the Geneva & Lyons Railroad and others were leased prior to 1885. The West Shore Railroad, an important line operating nearly 500 miles of main track, was leased to the New York Central for 475 years from January 1, 1886, at a rental of 4% yearly on $50,000,000 first mortgage bonds. This road was the reorganized New York, West Shore & Buffalo Railroad, which has been sold under foreclosure in November, 1885. In 1900, for the purpose of gaining terminal rights in Boston, the New York Central leased the Boston & Albany Railroad for 99 years at a rental equivalent to the interest on the Albany's outstanding bonds, 8% on its outstanding capital stock, and $10,000 per year for expenses of organization. Adopting a plan sunilar to that of The New York, New Haven & Hartford Railroad, the New York Central has secured control of several important traction companies and lighting properties which it controls through holding companies. The lighting companies are held by the Mohawk Valley Company and the traction lines by the New York State Railways Company. On December 31, 1911, the New York Central owned $5,114,300 of the capital stock of the Mohawk Valley Com- pany, upon which dividends of 6% are being paid. It is reported that the New York Central desires to divest itself of the lighting properties held by the Mohawk Valley Company, and that an eastern banking syndicate has an option on the Central's holdings in the same. [ 465 ] The New York State Railways Company was incorporated March 23, 1909, to take over the traction companies formerly held by the Mohawk Valley Company. It operates over 400 miles of street railway lines adjacent to and in Rochester, Syracuse, Utica, Schenectady, Albany, Troy and Rome, New York. On December 31, 1911, the New York Central owned $13,604,900 of the $23,814,900 of the capital stock outstanding. In July, 1910, an initial quarterly dividend of 13^^% was paid on the common stock. During 1910 the operation of trains by electricity was extended from New York to Hastings, on the Hudson River Division. For trains equipped with the multiple unit system, the extension of electric operation on the Harlem Division from Wakefield to North ^Yhite Plains was also accom- plished. In November, 1911, the operation by electricity of trains on the Hudson River Division was extended to Tarrytown, New York. In order to procure equipment sufficient to meet the steadily growing requirements, the New York Central & Hudson River Railroad Company, together with the Lake Shore & Michigan South- ern Railway Company and the Michigan Central Railroad Company, the Cleveland, Cincinnati, Chicago & St. Louis Railway Company, and the Chicago, Indiana & Southern Railroad Company became a party to equipment trust agreements in 1907, 1910, 1912 and 1913 known as the "New York Central Lines Equipment Trusts" of the above-named years. The agreement provides for the issuance of equipment trust certificates at 90% of the total cost of equipment to be furnished under the term of each of the agreements. The certificates mature serially and the obligations incurred are divided pro rata among the various companies which are parties to the agreements. The following statement shows the amount of equipment and certificates outstanding, also the pro rata distribution of both, under the terms of the Equipment Trusts of 1907 and 1910: Equipment Trust of 1907 Road Equipment Certificates Issued Outstanding N. Y. C. &H. R. R. R 4,535 $11,904,902 $8,730,261 L. S. & M. S. Ry 4,350 6,708,393 4,919,488 C. I. & S. R. R." 3,560 3,779,976 2,771,983 M. C. R. R 3,720 3,906,382 2,864,680 C. C. C. & St. L. Ry 1,754 3,700,347 2,713,588 Totals 17,919 $30,000,000 $22,000,000 Equipment Trust of 1910 Road N. Y, C. & H. R. R. R L. S. &M, S. Ry. C. I. & S. R. R M. C. R. R C. C. C. & St. L. Ry Totals 23,207 The Equipment Trust of 1912 provides for an issue of $15,000,000 equipment trust certificates bearing interest at 4}/^% per annum, being 90% of the total cost of equipment furnished under its terms. They mature $1,000,000 annually, beginning January 1, 1913. The cost of the equipment assigned to the New York Central & Hudson River Railroad Company was approximately $7,950,000, and the pro rata amount of the certificates representing 90% of the costs a]Ji)roximated $7,155,000. [ 466 ] Certificates Issued Outstanding 4,157 $6,509,466 $6,075,502 12,910 13,771,066 12,852,995 1,033 1,038,607 1,529,367 3,421 5,086,474 4,747,375 1,686 2,994,387 2,794,761 23,207 $30,000,000 $28,000,000 Under the date of January 1, 1913, a new issue of equipment trust certificates was issued bearing interest at 4} 9%. The total authorized amount was $24,000,000, and the proceeds were to be expended for the cost of new equipment and not to exceed 90% of the same. The Equipment Trust certificates of 1913 mature $830,000 annually, beginning January 1, 1914. The equipment purchased will be distributed pro rata among the companies which jointly and severally covenant to pay the principal and interest of the same. In February, 1911, the New York Central sold to The New York, New Haven & Hartford Railroad Company one-half of its holdings in the preferred stock of the Rutland Railroad Com- pany, thereby sharing its control with the latter in that property. The Public Service Commission of the State of New York approved the sale of the other half of the New York Central's holdings to the New Haven, but in December, 1912, this sale had not gone through. Effective July 1, 1911, a ten-year agreement was entered into by the New York Central with The New York, New Haven & Hartford, whereby the latter receives extensive trackage rights over the Boston & Albany Railroad. In return for this right the residts of operation of the Boston & Albany will be shared equally by both, and each will have a half interest in the net results of the New York Central's operations under the lease of July 1, 1900. In December, 1911, the New York Central & Hudson River Railroad Company applied to the Public Service Commission of New York for permission to purchase all or any part of the $10,000,000 stock of the New York & Harlem Railroad at not over $175 per $50 share. At the same thne it applied for permission to acquire the majority holdings of The New York, New Haven & Hartford of the common stock in the New York, Ontario & Western Railway Company. The commission granted permission in the former case; and, pending minor arrangements between the parties in question, the capital stock of the New York & Harlem Railroad was taken over during the 1912 fiscal year. The conmiission refused the company the right to take over the holdings of the "New Haven" in the New York, Ontario & Western Railway. Under the date of April 10, 1912, the New York Central offered the stockliolders of the Rome, Watertown & Ogdensburg Railroad, a company operated by it under lease, $128 per share in cash for the outstanding capital stock of that company, and independent of this offer, to give these same stockholders the right to subscribe for New York Central Thirty-year 4% Debentures of January 1, 1912, at 92. These recent attempts of the New York Central to procure control of the cai^ital stocks of the various companies which it leases is in accordance with the plan of consolidation which was an- nounced late in 1911. This plan calls for the merging of the various lines comprising the New York Central System into one company, and if, in the near future, the holders of the New York Central- Lake Shore Collateral 3}^% bonds, secured by the stock of the Lake Shore & Michigan Southern Railway Company, consent, it is expected that the latter company will be merged into that of the New York Central. EQUITIES This amalgamation of the operating companies of the New York Central System brings up the cjuestion of the equities of the New York Central proper in the stocks and earnings of these com- panies. That these equities are extremely valuable is attested by the fact that they produced in 1911 over $12,000,000 in the form of interest on funded debt owned and dividends on stocks owned or controlled. This was upon securities held in the treasury of the company having a book value of $167,085,772. The income therefrom was equivalent to 7.2% on the investment, and 5.3% on the Central's outstanding capital stock. In the first place, the New York Central owns over 90% of the stock of the Lake Shore & Michi- gan Southern Railway Company, which, besides being an important operating company, is also a large holding company, controlling the Cleveland, Cincinnati, Chicago & St. Louis Railway, the Pittsburgh & Lake Erie Railroad and others, also valuable equities in the Reading Company, which, [467 ] in turn, controls the properties of the Philadelphia & Reading Coal & Iron Company, the Reading Iron Company, the Philadelphia & Reading Railway Company and the Central Railroad of New Jer- sey, and so on. Nearly 90% of the stock of the Michigan Central Railroad is owned by the New York Central. The latter owns the stocks of the Chicago, Kalamazoo & Saginaw Railway and the Detroit & Charlevoix Railroad Companies, also a majority of the stock of the Canada Southern Railroad Company. Besides this, the Central controls the Mohawk Valley Company and the New York State Railways, described above, and there are substantial equities behind both of these holding companies. The total capital stock outstanding of the New York Central, the Lake Shore & Michigan Southern and its subsidiaries, including the Reading Company, the Michigan Central Railroad Company and its subsidiaries, the Mohawk Valley Company, the New York State Railway, the Rut- land Railroad, the St. Lawrence & Adirondack Railway, the Toronto, Hamilton & Buffalo Rail- way, the Indiana Harbor Belt Railroad and the American Express Company amounted to $737,- 643,800 on December 31, 1911. Of this amount, $246,496,050 was owned by or in the interest of the New York Central. This was 33.42% of the total. The total undivided surpluses of these com- panies, as shown by their balance sheets, amounted to $131,297,050. Figured on the basis of the Central's holdings in the respective properties, its proportion in the above undivided surpluses was $79,218,650. This latter figure does not include equities in the properties of the holding com- panies mentioned above. They are not accurately or easily obtainable, but if they could be included it seems probable that the New York Central's share would be increased to well over $100,000,000. PROPERTY The New York Central & Hudson River Railroad Company operated during the fiscal year ending December 31, 1911, including lines directly owned and leased lines, a total mileage of 3,790.23 miles as follows: Miles owned in fee 805.49 Miles of proprietary lines 3.06 Miles operated under lease 2,626.31 Miles operated under contract 81.70 Miles operated under trackage arrangements 273.67 Total miles operated 3,790.23 During the year 5.2 miles of road were added, due to the construction of a branch line on the Rome, Watertown & Ogdensburg Railroad, running from Sanfords to a point on the Cape Vincent Branch, forming thereby a new route for freight traffic between Watertown and Sanfords, New York. The New York Central's lines directly owned extend from New York to Syracuse, via Albany, and from Syracuse connect with Buffalo and Niagara, New York, over two parallel lines. The leased and subsidiary roads extend from New York to Buffalo with branches southerly from Geneva and Dunkirk, extending into Pennsylvania, northerly from Niagara, Rochester, Syracuse and Rome, forming a network over northern New York, and the lines of the Boston & x\lbany connecting Albany and Chatham with North Adams, Springfield, Winchendon and Boston, Massachusetts. The main lines operated are almost entirely confined to New York State, except the Boston & Albany line. The population of this State in 1890 was approximately 6,000,000; in 1900 it had increased to over 7,250,000, and in the Census of 1910 the population was reported to be 9,110,000. [ 468 CAPITALIZATION With 2,626 of its 3,790 miles under operation, those of leased properties, during the past fiscal year, the New York Central paid as rentals, mainly in the form of interest and dividends on guar- anteed stocks and bonds, $10,036,832 as compared witli $9,162,019, the interest on its own funded obligations. Capitalizing this rental charge at 5%, over $200,000,000 is thereby added to the com- pany's nominal capitalization. Following are the capital figures of the New York Central as of December 31, 1911: Capital stock $222,729,300 Funded debt 299,870,608 Nominal capital $522,599,908 Rentals capitalized at 5% 200,736,640 Gross capitalization $723,336,548 Securities owned 138,254,500 Net capitalization $585,082,048 Net capital per mile operated $154,374 Average miles operated 3,790.23 Net income to net capital . 7.8% Fixed charges to net income 66.7% Margin of safety 33.3% The amount of capital stock outstanding per mile of road owned (805) was $276,514. The amount of bonds outstanding per mile of road owned, excluding the Lake Shore and Michigan Central Collaterals, and the Spuyten Duyvil & Port Morris First Mortgage Bonds, was $225,845. Since 1900 there have been various increases in the company's capital stock. In April, 1900, $15,000,000 of stock was issued to stockholders at par to provide for new equipment. In 1902 the authorized stock was increased from $115,000,000 to $150,000,000, and $16,912,900 of stock was issued to stockholders at $125 per share, the proceeds to be used for improvements. The stock- holders were given an opportunity to subscribe for $16,947,800 stock at par in March, 1906. One month later the authorized amount of stock was increased to $250,000,000, and $28,984,900 addi- tional stock was issued to be used for improvements and betterments to the New York Terminal. The last increase of importance was in January, 1910, when $44,097,300 stock was issued at par to stockliolders of record, one half of the proceeds of the sale of which was used to refund maturing notes, and the other half for extensions and improvements. The increase in the company's nominal capitalization since 1900 can best be shown by the fol- lowing table. It will be seen that whereas the company's capitalization has increased 73%, gross earnings, on the other hand, have increased over 90%. Year Capital stock Funded debt Total capital Gross earnings 1900 $115,000,000 $185,758,021 $300,758,021 $54,562,952 1911 222,729,300 299,870,608 522,599,908 103,954,862 Increase $221,841,887 $49,391,910 Per cent increase 73% 90% The company's net capital per mile of road operated was $154,374, as compared with $123,072 of the Pennsylvania, and $153,512 of the Lackawanna. Upon its net capital, the New York Central earned 7.8% during the past fiscal year (1911) as compared with 12.9% earned by the Pennsylvania [ 469 ] and 15.4% by the Lackawanna. It would seem, therefore, that the Central was rather more highly capitalized than the other roads named, but it operates through the densest territory in the entire country and has large equities in its subsidiaries. FLxed charges consumed 66.7% of the company's total net income. The total net income of the New York Central could decline 33.3% before its interest, rentals and taxes would be impaired. This margin of safety for New York Central issues, however, depends largely upon the produc- tivity, in the form of interest and dividends, of the stocks and bonds which the company owns. Were the New York Central dependent upon its net operating earnings alone to meet its fixed charges, undoubtedly its credit would be much lower than it is. In point of fact, during 1911, the company could not have shown a surplus over charges without the aid of its "other income." The New York Central's margin of safety of 33% compares with the Pennsylvania's margin of 62% and that of the Lackawanna, 61%. CHARACTER OF TRAFFIC But 58% of the company's business is freight. This is so generally well distributeci that it is doubtful if a depression in any one industry could seriously affect its traffic or resulting earnings. The following table shows that, of its freight, the largest single items are the products of mines, 46%, while manufactures and miscellaneous commodities represent about 30% of the company's freight business, the latter returning a higher rate: Products of 1911 1910 1909 1908 1907 Agriculture .... 12.89% 11.74%, 12.07% 13.84% 12.73% Animals 4.81 4.49 4.92 5.90 4.81 Mines 46.31 47.08 46.54 46.55 46.41 Forests 6.24 6.43 6.57 6.45 6.47 Manufactures . . . 27.41 27.89 28.16 22.78 21.87 Miscellaneous . . . 2.34 2.39 1.74 4.48 7.71 Total 100.00% 100.00% 100.00% 100.00% 100.00% The number of tons of revenue freight moved in 1907 was 47,422,174, in 1908 but 39,105,955, in 1909 44,171,956, in 1910 47,066,839, and during the fiscal year of 1911 revenue freight car- ried amounted to 48,250,535 tons, an increase of 1,183,696 tons over 1910, and 828,361 tons over 1907, which had the highest previous record as to tonnage. Following are some of the more salient trafiic statistics of the New York Central for the past five years: Year Freight Train Freight Average rate density load eaming.s per ton tons per mile 1907 2,475,535 419 $59,406,446 $.0062 1908 2,059,531 384 51,200,547 .0064 1909 2,291,148 404 54,449,281 .0063 1910 2,460,620 417 58,411,234 .0063 1911 2,558,896 430 61,1.33,310 .0063 Freight earnings in 1908 declined over $8,000,000, due to a decreased tonnage in nearly all the classified commodities, the greatest reduction being in grain and bituminous coal. The latter was due to the suspension of labor in the Morris Run District during eight months of the year. The average rate per ton per mile showed a slight improvement, due largely to the fact that the loss in tonnage of merchandise and other freight of the higher classes was not proportionately as great as [ 470 ] in the tonnaf^e of coiinnodities of lower grade. Since 1908 substantial increases in freight earnings have been reported. During 1911 freight earnings reached the highest point in the company's history, being over $1,700,000 greater than the previous high record of 1907. Passenger traffic is heavy and yields over 30% of gross income. It will be noted in the following table that, with the exception of 1908, the company's passenger density and earnings have shown satisfactory increases. The decline in passenger density in 1908 was due primarily to the fact that the immigrant business was practically suspended during that year. This caused a decline in the average number of passengers per train, and an increase in the average rate owing to the reduction of this class of transportation. Year Passenger Number of PassenRor Average rate density passengers earnings per passenger per train per mile 1907 481,051 70 $29,837,859 $.0172 1908 437,713 67 27,824,491 .0176 1909 474,773 66 29,001,911 .0175 1910 506,301 66 30,992,856 .0175 1911 513,532 68 31,759,238 .0177 EARNINGS The New York Central's gross and net earnings for the past five years are as follows: Year Average miles Gross Per mile Net Per mile Operating operated earnmgs earnings ratio 1907 . . 3,782 $98,369,059 $26,009 $22,565,725 $5,967 77.06% 1908 . . 3,781 88,849,367 23,498 23,430,282 6,197 73.63 1909 . . 3,782 93,171,860 24,637 28,578,034 7,559 69.33 1910 . . 3,785 99,908,478 26,396 25,829,391 6,821 74.15 1911 . . 3,790 103,954,862 27,427 29,482,284 7,778 71.63 The decline in earnings in 1908 has been referretl to above. Together with this decline in gross revenues came a rigid curtailment of operating expenses, especially in the costs of conducting trans- portation, which were cut over $7,000,000. This enabled the company to report a slightly higher net than in 1907, and reduced the operating ratio from over 77% to 73.63%. A further reduction of transportation costs in 1909, together with a substantial increase in gross revenue, brought about a still lower operating ratio, and the company reported a new record for net earnings. During the fiscal year of 1911 the New York Central's gross revenue passed the $100,000,000 mark, while net earnings were nearly $29,500,000, both being high records for the company. The gross earnings per mile and the operating ratios of the New York Central, the Pennsylvania, and the Lackawanna, for 1911, are as follows: Property Gross earnings Operating Maintenance Transportation per mile ratio to gross to gross New York Central $27,427 71.6% 29.4% 42.2% Pennsylvania 39,195 71.9 31.1 40.8 Lackawanna 44,890 61.0 27.1 33.9 The earnings of the New York Central System, including the New York Central proper, the Mohawk Valley Company, the New York State Railways, the Rutland Railroad, the Lake Shore & Michigan Southern Railway and its controlled companies, the Michigan Central Railroad, and [471 ] the other principal controlled companies in the system, have been compiled from their income sheets for the fiscal year ending December 31, 1911, as follows: Gross earnings $331,690,800 Operating expenses (including taxes) 248,219,700 Net earnings $83,471,100 Other income 34,973,000 Total net income $118,444,100 Charges $67,536,319 Dividends 37,342,081 Surplus for year after all deductions $13,565,700 MAINTENANCE The New York Central & Hudson River Railroad Company has spent the following amounts for maintenance of way and equipment since 1907: Year Maintenance Total Per Way Equipment maintenance mile 1907 $12,462,046 $14,823,630 $27,285,676 $7,214 1908 10,768,284 13,420,282 24,188,566 6,397 1909 11,494,023 15,421,648 26,915,671 7,116 1910 14,060,177 16,936,253 30,996,430 8,193 1911 13,723,709 16,911,146 30,634,855 8,083 During the past five years the company has spent from its income over $140,000,000 for main- tenance of way and equipment. This is an average of $28,000,000 a year, or an average of $7,400 per mile. Following is a comparison of the traffic density of the Central, Pennsylvania and Lackawanna, together with the total amounts spent for maintenance per mile. The figures are altogether favor- able to the New York Central. Five-year average Traffic Maintenance density per mile New York Central 2,851,820 $7,400 Pennsylvania 5,316,000 12,355 Lackawanna 4,848,890 10,950 [ 472 ADDITIONS AND BETTERMENTS Biised on the annual reports of the company, the following table has been prepared showing the amounts which have been spent for additions and betterments by the company and charged to Cost of Property and Equipment Accounts: Year Additions and betterments Total Main line Leased roads 1907 $6,431,915 $9,014,975 $15,440,890 1908 5,603,731 7,644,337 13,248,068 1909 6,216,748 2,389,382 8,606,130 1910 26,259,284* 8,492,007 34,751,291 1911 6,568,419 7,804,014 14,372,433 Total $86,424,812 Special Improvement Fund 2,351,231 Grand total $88,776,043 In accordance with the rulings of the Interstate Commerce Commission, the company item- izes on its balance sheet the amounts of income spent since June 30, 1907, for additions to property. On December 31, 1911, the company had spent thus $4,857,367. NEW YORK TERMINAL Any analysis of the New York Central would be incomplete without a consideration of the large sums which the company has spent upon its New York Terminal. On January 26, 1912, the main portions of the "Grand Central Terminal," as it is known, were opened to the public. This station with its approaches has taken several years to complete and has already cost approximately $90,000,000. This expense has been carried along with no income return. The new terminal as planned will be the most costly railroad station in the world. It is as con- venient as it possibly can be made and is centrally located. It has been equipped to handle traffic by electric power through a moderate terminal plant of ample capacity. Built on the continental plan with loadmg and unloading platforms on different levels and with the construction of loop tracks permitting the arrival and departure of trains without crossing each other's paths, the ter- minal will have a maximum daily capacity of 250,000 passengers and over 1,400 trains. DIVIDENDS The road, since its existence as a consolidated property, has never defaulted a bond, nor a year without a dividend. This is indeed a most satisfactory record, covering a period, as it does, in which most severe business depressions have prevailed. The New York Central's record since 1869 is as follows: Year Rate Year Rate Year Rate Year Rate 1869-84. QO/ 1891 . 41^% 1900 . . m% 1908 . 5% 1885 . 5 1892-4 . . 5 1901-5 . . 5 1909 . 5 1886-89. . 4 1895 . 41^ 1906 . . 5M 1910 . 6 1890 . 3 1896-99 . 4 1907 . . 6 1911-12. . 5 Including the proceeds of the Equipment Trust Certificates of 1910. [ 473 ] The company's Profit and Loss (free surplus) as reported on its balance sheet of December 31, 1911, was $13,448,668, and, together with the appropriated surplus of $4,970,036, is equivalent to 8% on the company's outstanding capital stock. STATISTICS Following are the capitalization, earnings, and traffic statistics of the New York Central & Hudson River Railroad, based on the average miles operated, for the year 1900, and for the years 1905 to 1911 inclusive: [ 474 ] NEW YORK CENTRAL & HUDSON RIVER RAILROAD Fiscal Capital Funded Rentals Gross Owned by Net Average Extra year slock debt at 5% capital company capital miles operated mam track 1900 $40,823 $65,942 $49,266 $156,031 $45,273 $110,758 2.817 1,551 1905 35,042 61,093 50,399 146,524 38.041 108,483 3,774 2,011 1906 47,088 60,931 50,217 158,236 40.806 117,430 3.784 2,037 1907 47,232 67,474 50,936 105,042 42,204 123,438 3,782 2,152 1908 47,244 71,030 51,351 169,625 40,097 128,928 3.781 2,201 1909 47,232 72,730 52,583 172,545 35,748 136,797 3,782 2,255 1910 58,845 71,624 53,148 183.017 37.038 140,579 3.785 2,311 1911 58,707 79,121 52,904 190,852 30,478 154.374 3,790 2.335 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus avail- year operatmg and general operating income net charges able for revenue Way Equipment expense revenue nicome dividends 1900 $19,308 $2,552 $1,987 $7,548 $7,281 $1,074 $8,955 $6,010 $2,939 1905 22,812 2,645 3,507 9,730 0,924 1,728 8,052 5.893 2,758 1906 24,336 2,832 3,850 10,482 7,172 2,035 9,207 5,904 3,242 1907 26,009 3,295 3,919 12,828 5,907 3,034 9.001 0,070 2,931 1908 23.498 2,848 3,549 10,904 0,197 2,742 8,939 0,539 2,400 1909 24,637 3,039 4,077 9,902 7.559 3.000 10,025 7,001 3,024 1910 20,390 3,714 4.479 11.382 0.821 4,080 10,901 7,130 3,771 1911 27,427 3,621 4,462 11.500 7.778 4,307 12,147 8,109 4,030 Fiscal year Divi- dends Other Surplu charges to in- Operating expenses to gross earnings Total mainte- Conducting transpor- tation to Fixed Gross charges earnings to gross to gross earnings capital _ Net income to net capital Per cent earned on capital stock $1,752 1,752 2,070 2,833 2,362 2,362 3,531 2,938 $406 340 $1,187 601 827 98 38 1,202 1,100 62.41% 23.3% 39.1% 31.1% 12.4% 69.65 70.53 77.00 73.03 09.33 74.15 71.63 27.4 27.8 27.2 28.8 31.0 29.4 42.7 43.1 49.3 40.4 40.5 43.1 42.2 25.8 24.5 23.3 27.8 28.4 27.0 29.6 15.6 15.4 15.6 13.7 14.1 14.2 14.3 8.1^ 8.0 7.8 7.3 6.9 7.7 7.4 7.8 Fiscal Train Maintenance Conducting Train Rate per mile Freight Train Freight Passenger, year mile per revenue transportation mile density load to all freight earnmgs (gross) trai n mile earnings Per Per revenue traffic and train mile (net) passenger ton tons company Way Equipment cars 1900 $1.61 $.213 $.166 $.629 $.60 $.0182 $.0056 2.171,062 360 63% 60,707 1905 1.93 .224 .297 .825 .59 .0173 .0001 2,231.435 399 59 70,671 1906 2.03 .236 .321 .876 .60 .0171 .0004 2.226.839 403 60 74,533 1907 2.06 .262 .310 1.019 .47 .0172 .0002 2,475,535 419 60 72,870 1908 1.99 .242 .301 .926 .52 .0176 .0004 2,059,531 384 57 68,674 1909 2.00 .246 .331 .808 .61 .0174 .0003 2,291,148 404 59 07,893 1910 2.04 .287 .346 .881 .53 .0175 .0003 2,460,620 417 59 70,990 1911 2.13 .281 .346 .897 .60 .0176 .0003 2,558,896 430 58 67,830 [475] BOND DESCRIPTIONS Following are descriptions of the bond issues of the New York Central & Hudson River Railroad System, together with the bases on which they have sold during the decade ending December 31, 1912: NEW YORK CENTRAL & HUDSON RIVER RAILROAD Mortgage Gold sJ^s Dated June 1, 1897 Maturing July 1, 1997 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Authorized $100,000,000 Outstanding $94,000,000 Per mile . . 116,770 Provisions of issue: Security : Of the $100,000,000 authorized, $94,000,000 are outstanding as above, and the balance, $11,000,000, is reserved for extensions, terminals, stocks or bonds of other companies, etc., at $1,000,000 per year. The above bonds are secured by a direct mortgage on 805.49 miles of the company's road, together with all the branches, extensions, terminals, rolling stock and other property and franchises now owned or hereafter acquired, but not including any stocks or bonds except those acquired with the proceeds hereof, pertaining to the above mileage. They are secured by a first collateral lien on three-quarters of the capital stock of the Hudson River Bridge Company, which owns two bridges in Albany, also leasehold interests in the Troy & Green- bush Railroad, Spuyten Duyvil & Port Morris Railroad, West Shore Railroad, Rome, Water- town & Ogdensburg Railway, New York & Harlem Railroad, Mohawk & Malone Railway, Carthage & Adirondack Railway, New York & Putnam Railroad, Gouverneur & Oswegatchie Railroad and the Beech Creek Railroad. Under the indenture the company agrees not to extend any of the existing bonds at maturity, and orders the trustee to release upon request, without restriction and limitation, (1) any real estate not necessary for the operation of the road whose value shall not exceed $1,000,000, (2) any real estate for which bonds secured hereby of any equal value, shall have been sur- rendered and cancelled, (3) certain other lots in New York City. Trustee: Central Trust Company, New York. These bonds sold in 1902 on a 3.20 to 3.35 basis 1903 3.35 3.70 1904 3.45 3.62 1905 3.45 3.55 1906 3.55 3.80 1907 3.70 4.15 1908 3.65 4.00 1909 3.70 3.95 1910 3.80 4.00 1911 3.90 4.10 1912 3.95 4.15 These bonds are considered a legal investment for savings banks in New England. [ 478 ] NEW YORK CENTRAL & HUDSON RIVER RAILROAD Lake Shore Collateral Trust 31^5 Dated February 4, 1898 Maturing February 1, 1998 Interest payable February 1 and August 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Authorized $100,000,000 Outstanding $90,578,400 Provisions of The unissued bonds may be issued at the rate of $200 in bonds for each additional $100 of issue: Lake Shore & Michigan Southern Railway Company stock deposited hereunder. Security: The above bonds are a direct obligation of the New York Central & Hudson River Railroad Company, and are secured by a deposit with the trustee of $45,289,200 capital stock of the Lake Shore & Michigan Southern Railway Company at the rate of $500 in stock for every $1,000 bond. In the indenture tlie Railroad Company will not hereafter make any mortgage upon its rail- road without also thereby including therein, in favor of every bond secured by this indenture, a lien prior and superior to the lien in favor of any other bond or debt secured by any such mortgage, except that any such mortgage may secure and provide for other bonds for the sum of not exceeding $22,000,000 equally with all of the bonds hereby secured. All dividends on the deposited stock shall be paid to the trustee. The Railroad Company, unless in default, shall have the right to vote upon all the shares jiledged with the trustee. Under no conditions shall the company or the trustee permit any increase in the capital stock of the Lake Shore & Michigan Southern Railway Company. The pledge of the above shares shall not prevent the consolidation or merger of the Lake Shore & Michigan Southern Railway Company with, or the sale, conveyance, or transfer of its property to the Railroad Company upon such terms as shall be approved by the holders of 75% in amount of the bonds secured by this indenture. Trustee: The Guaranty Trust Company, New York. These bonds sold in 1902 on a 3.57 to .3.80 basi.>^ 1903 3.70 4.05 1904 3.75 4.10 1905 3.75 3.95 1906 3.75 4.05 1907 3.95 4.80 1908 4.10 4.70 1909 4.10 4.50 1910 4.25 4.40 1911 4.35 4.70 1912 4.15 4.50 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [479 ] NEW YORK CENTRAL & HUDSON RIVER RAILROAD Michigan Central Collateral Trust 33^5 Dated April 13, 1898 Maturing February 1, 1998 Interest payable February 1 and August 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Authorized $"21,550,000 Outstanding $19,336,445 Provisions of The unissued bonds may be issued at the rate of $115 in bonds for each additional $100 of issue: Michigan Central Railroad Company stock deposited hereunder. Security: The above bonds are a direct obligation of the New York Central & Hudson River Railroad Companj% and are secured by deposit with the trustee of $16,819,250 of the capital stock of the Michigan Central Railroad Company, at the rate of $100 in INIichigan Central stuck for each $115 of these bonds. For every 200 shares of the par value of $100 deposited, the trustee shall issue $23,000 of bonds. The indenture of this mortgage makes the same provisions as the indenture of the Lake Shore Collateral S}is of 1998, substituting for the $22,000,000 additional bonds mentioned $100,000,000 in each case. Trustee: The Guaranty Trust Company, New York. These bonds so Id in 1902 on a 3.57 i to 3.80 basis 1903 3.75 4.10 1904 3.85 4.10 1905 3.85 3.95 1906 3.85 4.05 1907 4.05 4.95 1908 4.05 4.70 1909 4.15 4.50 1910 4.30 4.50 1911 4.40 4.70 1912 4.25 4.50 These bonds are considered a legal investment for savings banks hi New Hamp.shire and Rhode Island. NEW YORK CENTRAL & HUDSON RIVER RAILROAD Spuyten Duyvil & Port Morris Railroad First Mortgage s^/^s Dated June 1, 1909 Maturing June 1, 1959 Interest paj'able June 1 and December 1 at the Grand Central Station, New Yorlv. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000, and multiples of $50,000. Coupon and registered bonds are interchangeable. Authorized $20,000,000 Outstanding $"2,500,000 Provisions of Of the $20,000,000 authorized, $2,500,000 are outstanding, as above, and the balance, issire: $17,500,000, is reserved for extensions, iniprovements, equipment, etc., under the direction of the Public Service Commission. Security : Tiiese bonds are secured by a first mortgage on the railroad of the Spuyten Duyvil & Port Morris Railroad Company, extending from its point of connection with the New York Cen- tral & Hudson River Railroad in the Borough of Bronx to its pomt of connection with the New York & Harlem River 149th Street, in the same Borough, together with all property now owned or which may hereafter be acquired for use in connection with this railroad, and all income and revenue, secured by these bonds. Trustee: Central Trust Company, New York. The Spuyten Duyvil & Port Morris Railroad Company was chartered March 4, 1869, and opened for traffic April 7, 1872. In May, 1909, the company leased its property and franchises for the term of its cor]}orate existence to the New York Central & Hudson River Railroad Company, the lessee agreeing to pay as rental the interest on all the bonds and obligations of the lessor and 8% on its capital stock. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. NEW YORK CENTRAL & HUDSON RIVER RAILROAD Thirty-Year Debenture 4s Dated May 12, 1904 Maturing May 1, 1934 Interest payable May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000, $10,000 and $50,000. Coupon and registered bonds interchangeable. Authorized $50,000,000 Outstanding $48,000,000 Security : These bonds are a direct obligation of the New York Central & Hudson River Railroad Com- pany, but are not secured by a mortgage. In the indenture the company agrees to make no new mortgage upon its railroad, while any of these debentures are outstanding, without thereby including those outstanding. [481 ] Trustee: These bonds were issued to provide for improvements, additions and acquisitions, including the purchase of $5,000,000 preferred stock of the Geneva, Corning & Southern Railway. United States Trust Company, New York. bonds sold in 1905 ( yn a 3.85 to 4.00 basis 1906 3.87 4.12 1907 4.05 4.95 1908 4.25 4.60 1909 4.22 4.40 1910 4.30 4.55 1911 .4.37 4.55 1912 4.27 4.70 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. NEW YORK CENTRAL & HUDSON RIVER RAILROAD Three-Year 4H% Notes Dated March 1, 1911 Maturing March 1, 1914 Interest payable March 1 and September 1 at New York, Paris and London. Coupon notes of $1,000 and $10,000, registerable as to principal or fully registerable. Registered notes of $5,000, $10,000, $50,000 and $100,000. Coupon and registered notes interchangeable. (The notes are also issued in Pounds Sterling and French Francs.) Authorized $30,000,000 Outstanding $30,000,000 Security: Registrar: The above notes are a direct obligation of the New York Central & Hudson River Railroad ('ompany, but are not secured by a mortgage. The proceeds of this issue were used to provide for the requirements of the road for the fiscal year of 1911, including cost of construction work at the Grand Central Station and in the electric zone, providing extra tracks on the Hudson Division and new terminal facilities at Utica and Rochester, N. Y. Guaranty Trust Company, New York. These notes were offered in 1911 at 99% and interest. In July, 1912, a 4.50 basis was bid. [ 482 ] NEW YORK CENTRAL & HUDSON RIVER RAILROAD Three-Year 4,1^% Notes Dated May 1, 1912 Maturing May 1, 1915 Interest payable May 1 and November 1 at New York and in London. Principal and interest payable in London at the rate of $4.86J^ to the £. Coupon notes of $1,000. Authorized $30,000,000 Outstanding $20,000,000 Security: The above notes are a direct obligation of the New York Central & Hudson River Railroad Company, but are not secured by a mortgage. The above issue was authorized by the Public Service Commission late in 1911 to provide for the acquisition of the stock of the New York & Harlem Railroad, the Rome, Watertown & Ogdensburg Railroad, and the Utica & Black River Railroad Companies. Registrar: Guaranty Trust Company, New York. These notes were offered in May, 1912, at par. BEECH CREEK RAILROAD First Morgtage 4s Dated July 1, 1886 Maturing July 1, 1936 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Registered bonds of $1,000. Registered bonds exchangeable for coupon bonds. Authorized $5,000,000 Outstanding $5,000,000 Per mile . . 30,300 Security: The above bonds are secured by a first mortgage on the Beech Creek Railroad Company's lines from Jersey Shore to MahaflFey Junction, Pa., 112.34 miles, and on 52.35 miles of branches, totalling 164.69 miles; also on lands, buildings, rolling stock, franchises and incomes. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Trustee: Knickerbocker Trust Company, New York. The Beech Creek Railroad was chartered June 29, 1886, under the laws of Pennsylvania as a reorganization of the Beech Creek, Clearfield & Southwestern Railroad Company. It was leased to tiie New York Central & Hudson River Railroad Company for 999 years from October 1, 1890, at a rental ecjuivalent to the interest on the company's bonds, dividends of 4% upon the capital stock, [483 ] taxes and organization costs of not greater than $6,000 per annum. The Beech Creek Railroad was operated independently, however, until July 1, 1899. These bonds sold in 1903 on a 3.60 to 3.65 basis 1904 3.57 3.77 1905 3.60 3.70 1906 3.75 3.88 1907 3.87 4.10 1908 4.05 1909 4.00 1910 4.10 4.20 1911 4.10 1912 4.05 4.10 These bonds are considered a legal investment for savings banks in New England. BEECH CREEK RAILROAD Second Mortgage 5s Dated July 1, 1892 Maturing July 1, 1936 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, fully registerable. Registered bonds of $1,000. Authorized $1,000,000 Security : Outstanding $1,000,000 Per mile . . 6,000 The above bonds are secured by a second mortgage on the company's lines from Jersey Shore to Mahafley Junction, Pa., 112.34 miles, and 52.35 miles of branches, covered by the First Mortgage 4s of 1936. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company, by endorsement. Trustee : Union Trust Company, New York. These bonds were quoted in 1909 on a 4.55 basis (bid) 1910 4.62 1911 4.60 1912 4.55 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 484 ] BEECH CREEK EXTENSION RAILROAD First Mortgage aJ^s Dated May 1, 1901 Maturing April 1, 1951 Interest pajable April 1 and October 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $4,500,000 Outstanding $3,500,000 Per mile . . 60,300 By the terms of its lease to the New York Central & Hudson River Railroad Company, it is agreed that the issue of these bonds shall be limited to $3,500,000. Security: The above bonds are a first mortgage on the company's line from Keating to Clearfield, Pa., and branches, 58.31 miles, together with all lands and rights of way, buildings, roUing stock, franchises, rents and profits of the same, both present and future. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Trustee: Guaranty Trust Company, New York. Tlie Beech Creek Extension Railroad Company was chartered March 31, 1905, under the laws of Pennsylvania, as a consolidation of a road of the same name, and the Curwensville & Bower Railroad, the Pittsburgh & Eastern Railroad and the Clearfield & Southern Railroad Companies. It was leased to the New York Central & Hudson River Railroad Company for 999 years from June 1, 1905, the lessee guaranteeing by endorsement both principal and interest on the company's bonds. The New York Central & Hudson River Railroad Company owns the entire capital stock of the Beech Creek Extension Railroad Company. These bonds were quoted in 1909 on a 4.30 basis (bid) 1910 4.20 1911 4..30 1912 4.35 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 485 ] BEECH CREEK EXTENSION RAILROAD Consolidated Mortgage 4s Dated May 1, 1905 Maturing April 1, 1955 Interest payable April 1 and October 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000. Coupon and registered bonds interchangeable. Authorized $20,000,000 Outstanding $3,964,000 Per mile . . 31,200 Provisions of Of the total amount authorized, $3,964,000 are outstanding, as above, and the balance, issue: $16,036,000, is reserved for extensions and construction and to retire $3,500,000 First Mort- gage 3^8 of 1951. Security : Trustee: The above bonds are secured by a direct mortgage on 127.46 miles of road together with all lands, buildings, appurtenances, rolling stock and franchises, now owned or hereafter acquired, and all incomes. They are secured by a first mortgage on 69.15 miles of road, and by a second mortgage on 58.31 miles of road covered by the first lien of the First Mortgage 3Hs of 1951. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Guaranty Trust Company, New York. These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. CARTHAGE & ADIRONDACK RAILWAY First Mortgage 4s Dated December 1, 1892 Maturing December 1, 1981 Interest payable June 1 and December 1 at the (iraiid Central Station, New York. Coupons bond of $1,000, registerable as to principal. Authorized $1,600,000 Outstanding $1,100,000 Per mile . . 23,900 Security : Trustee : The above bonds are secured by a first mortgage on the company's line from Carthage to Newton Falls, N. Y., 45.86 miles, together with all lands, buildings, equipment and fran- chises except the franchise to exist as a corporation. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Union Trust Company, New York. 480 ] The Carthage & Adirondack Railway Company was chartered March 28, 1883, under the laws of New York. Its line was opened for traffic throughout August 22, 1889. Its property was leased to the New York Central & Hudson River Railroad Company January 9, 1893, for the term of the lessor's existence, the lessee agreeing to pay as rental interest on the above bonds, all taxes and as- sessments, maintenance expenses and costs of organization. The Carthage & Adirondack Railway Company's entire capital stock is owned by the New York Central & Hudson River Railroad Company. These bonds sold iu 1909 on a 4.10 basis 1910 4.50 (bid) 1911 4.50 (bid) December, 1912 4.60 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. PINE CREEK RAILWAY First Mortgage Currency 6s Dated Deceml)cr 9, 1882 . Maturing December 1, 1932 Interest payable June 1 and December 1 at the Grand Central Station, New York. Registered bonds of $1,000. Authorized $3,500,000 Outstanding $3,500,000 Per mile . . 46,000 Security: The above bonds are secured by a first mortgage on tlie company's main and brancli lines, totalling 75.91 miles, including the line from Stokesdale to Newberry Junction, Pa., together with all buildings, equipment and corporate franchises. These bonds were ASSUMED by the Geneva, Corning & Southern Railway Company, and are GUARANTEED as to PRINCIPAL and INTEREST, jointly and severally by the Philadelphia & Reading Railroad Company and the New York Central & Hudson River Railroad Company. An e(jual amount of New York Central & Hudson River Railroad Conii)any, Geneva, Corn- ing & Southern Railway Refunding 4s of 1959 have been reserved to retire this issue at maturity. The Pine Creek Railway was organized June 6, 1884, as the successor to the Jersey Shore, Pine Creek & Buffalo Railway Company. It was the latter that executed the above mortgage. From May 1, 1899, it was leased for 999 years to the New York Central & Hudson River Railroad Company at an annual rental of $35,000 and interest on its outstanding bonds. On x\pril 1, 1909, the Pine Creek Railway consolidated with the Syracuse, Geneva & Corning Railway and the Fall Brook Railway Companies, forming the Geneva, Corning & Southern Railway Company, which assumed the above bonds. The latter road was leased from April 1, 1909, for the term of its corporate existence to the New York Central & Hudson River Railroad Company at a rental sufficient to cover operating expenses, interest on all outstanding obligations, taxes, and assessments, 4% yearly dividends on preferred stock, 3'^% on common stock and dividends on any second preferred stock which may be issued. [487 ] These bonds sold in 1907 on a 5.50 basis 1909 3.90 1910 4.55 (bid) 1911 4.50 (bid) December, 1912 4.55 (bid) These bonds are considered a legal investment for savings banks in Maine and New Hampshire. GOUVERNEUR & OSWEGATCHIE RAILROAD First Mortgage 5s Dated June 1. ISO'-i Maturing June 1, 1942 Interest payable June 1 and December 1 at the Grand Central Station, New York. Coupon bonds of ,$1,000. Authorized $300,000 Outstanding $300,000 Per mile . . 23,000 Security: The above bonds are secured by a first mortgage on the company's road from Gouverneur to Edwards, N. Y., and branches, totalling 13.07 miles, together with lands, buildings, leases, equipment and all franchises. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Trustee: Union Trust Company, New York. The Gouverneur & Oswegatchie Railroad Company was chartered April 13, 1892, under the laws of New York. Its line was open for traffic July 18, 1893. Under an agreement dated July 8, 1892, the New York Central & Hudson River Railroad Company, which owns all the capital stock of the Gouverneur & Oswegatchie Railroad Company, took over the operation of the latter, guaran- teeing its bonds as to principal and interest. These bonds were quoted in 1909 on a 4.. 50 basis (bid) 1910 4.55 1911 4..50 December, 1912 4.50 These bonds are considered a legal investment for sa\'ings banks in Maine, New Hampshire and Rhode Island. [ 488 MOHAWK & MALONE RAILWAY First Mortgage 4s Dated July 1, 1892 Maturing September 1, 1901 Interest payable March 1 and September 1 at the Knickerbocker Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 13,700 Security: The above bonds are secured by a first mortgage on the company's line from Herkimer to Malone Junction, N. Y., and branches, totalling 182.18 miles, together with all lands, build- ings, equipment, franchises and incomes. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement under terms of lease. Equity: The above bonds are prior in lien to $3,900,000 Consolidated Mortgage S^/^s of 2002, a suffi- cient number of which have been reserved to retire this issue at maturity. Trustee: Knickerbocker Trust Company, New York. Tlie Mohawk & Malone Railway Company was chartered June 23, 1892, under the laws of the State of New York as a consolidation of the Herkimer, Newport & Poland Railway, the Herkimer, Newport & Poland Extension Railway, and the St. Lawrence & Adirondack Railroad Companies. The road was completed throughout in No\'ember, 1892, and on May 1, 1893, was leased to the New York Central & Hudson River Railroad Company. A second lease was arranged, dated April 17, 1902, to rim diu'ing the corporate existence of the company at an annual rental equivalent to the interest on the company's bonds, a dividend of 4% on the company's capital stock and organization expenses. These bonds sold in 1905 on a 3.85 basis 1906 3.87 1907 4.10 1908 4.10 1909 4.00 1910 4.00 to 4.05 1911 4.05 1912 4.05 These bonds are considered a legal investment for savings banks in New England. [ 489 MOHAWK & MALONE RAILWAY Consolidated Mortgage i^is Dated March 1, 1902 Maturing March 1, 2002 Interest payable Marcli 1 and September 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $10,000,000 Outstanding $.S,900,000 Per mile . . 21,400 Provisions of Of tlie total amount authorized, $3,900,000 are outstanding as above, $2,500,000 have been issue: reserved to retire the Mohawk & Malone First 4s of 1991, and the balance, $3,600,000, has been reserved to complete, furnish and operate the railroad at the company's request, with restrictions. Security: The above bonds are secured by a second mortgage on the company's road from Herkimer to Malone, N. Y., including branches, 182.18 miles, covered by the first lien of the First 4s of 1991. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement under the terms of the lease. Trustee: Guaranty Trust Company, New York. These bonds are considered a legal investment for savings banks in New Hampshire, Connecticut and Rhode Island. NEW YORK & HARLEM RAILROAD First Mortgage 33^5 Dated June 1, 1897 Maturing May 1, 2000 Interest payable May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and $10,000. Authorized $12,000,000 Outstanding $12,000,000 Per mile . . 88,200 Security: The above bonds are secured by a first mortgage on the company's road from the Grand Central Station, New York, to Chatham, N. Y., including branches, totalling 136.48 miles, also on the Grand Central Station, and the Terminal at Chatham, N. Y., including realty north of the Harlem River, equipment, franchises and all incomes. [ 490 ] These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York- Central & Hudson River Railroad Company under the terms of its lease. Trustee: Guaranty Trust Company, New York. The New York & Harlem Railroad was chartered April 25, 1831, under the laws of New York. Its corporate existence was extended for 500 years from April 16, 1869. As a steam road it was com- pleted throughout in 1852 and was leased April 1, 1873, for 401 years to the New Y^'ork Central & Hudson River Railroad Company at a rental equivalent to 8% on the company's stock (increased to 10% from 1900) and interest on the company's bonds. These bonds sold in 1903 on a 3.50 basis 1905 3.30 1906 3.45 1908 3.65 1909 3.85 (bid) 1910 3.77 1911 3.90 1912 3.95 to 4.00 These bonds are considered a legal investment for savings banks in New England except in Vermont. NEW YORK & NORTHERN RAILWAY First Mortgage 5s Dated October 1, 1887 Maturing October 1, 1927 Interest payable April 1 and October 1 at the (irand Central Station, New York. Coupon bonds of $1,000. Authorized $1. 200,000 Outstanding $1,200,000 Per mile . . 21,000 Security: Tliese bonds are a direct obligation of the New York & Putnam Railroad Company. They are secured by a first mortgage on 56.83 miles of railroad, including the 53.73 miles from a junction with the Manhattan Railway Company at 155th Street, New York, to Brewster, N. Y., a bridge over the Harlem River and the branch from Van Cortlandt Station to Yonkers, N. Y.; also on real estate, building, piers, franchises, rolling stock, now owned or hereafter acquired, and all incomes. Equity: This issue is prior in lien to the New York & Putnam First Consolidated 4s of 1993, a suf- ficient number of which have been reserved to provide for tlie retirement of this issue. Trustee: Central Trust Company, New York. The New York & Northern Railway was organized February 18, 1878, as the New York City & Northern Railroad Company. After two receiverships in 1882 and 1893, the company was re- organized Jamuiry 12, 1894, as thS New Y'ork & Putnam Railroad Company. The latter was leased on January 30, 1894, to the New York Central & Hudson River Railroad Company for the term of its corporate existence at a rental equal to the interest on its bonds. [ 491 ] These bonds sold in 1902 on a 3.70 to 3.80 basis 1903 4.00 1904 3.95 4.12 1905 3.70 3.80 1907 4.17 4.22 1908 4.40 1909 4.38 1910 4.30 (bid) 1911 4.45 (bid) % 1912 4.45 (bid) These bonds are considered a legal investment for savings banks in Maine. NEW YORK & PUTNAM RAILROAD First Consolidated Mortgage 4s Dated January 15, 1894 Maturing October 1, 1993 Interest ])ayable April 1 and October 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal or fully regi.sterable. Authorized $0,200,000 Outstanding $4,025,000 Per mile . . 70,()00 Provisions of In addition to the $4,025,000 bonds outstanding as above, $975,000 are reserved for improve- issue: ments, and the balance, $1,200,000, is reserved to retire the New York & Northern 5s of 1927. Security: These bonds are secured by a second mortgage on the 56.83 miles of main line, branch and bridge, which are covered by the first lien of the First 5s of 1927. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Trustee: Union Trust Company, New York. The New York & Putnam Railroad Company was incorporated under the laws of New York in 1894 as successor to the New York & Northern Railroad. The property was leased on January 13, 1894, to the New York Central & Hudson River during its corporate existence, the lessee to pay as annual rental interest at 4% on bonds secured by the above mortgage, operating, organization and maintenance expenses, taxes and assessments. The entire capital stock of the New York & Put- nam Railroad Company is owned by the New Y'ork Central & Hudson River Railroad Company. These bonds sold in 1905 on a 3.72 to 3.875 basis 1906 3.85 4.00 1908 4.00 1909 4.05 (bid) 1910 4.05 4.20 1911 4.10 December, 1912 4.15 (bid) * These bonds are considered a legal investment for savings banks in New Hamjjshire and Rhode Island. [ 492 ] NEW JERSEY JUNCTION RAILROAD First Mortgage Currency 4s Dated June 30, 1886 Maturing February 1, 198C Interest payable February 1 and August 1 at the Grand Central Station, New York. Coupon bonds of $1,000, fully registerable. Registered bonds of $1,000. Authorized $4,000,000 Outstanding $1,700,000 Security: The above bonds are secured by a first mortgage on 4.78 miles of road, including the line from Weehawken to Jersey City and the Harsimus Branch; also on floating equipment, rolling stock, lands, water rights, structures, leases, franchises and income, subject to the right to abandon anj' part of the main line south of the connection with the Pennsylvania Railroad. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Trustee: Guaranty Trust Company, New York. The New Jersey Junction Railroad Company was organized in New Jersey on February 25, 1886, for the purpose of providing connections and facilities for interchange of traffic between the railway systems terminating at Jersey City, Hoboken and Weehawken. The property and futine acquisitions were leased to the New Y^ork Central & Hudson River Railroad Company on June 30, 1886, for 100 years, the lessor guaranteeing payment of principal at maturity and interest ujjon all bonds. The entire capital stock of the New Jersey Junction Railroad Company is owned by the New York Central & Hudson River Railroad Companj^ These bonds sold in 190'i on a 3.80 basis These bonds were quoted in 1909 3.95 (bid) 1910 4.30 1911 4.20 December, 191"^ 4.15 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 493 WEST SHORE RAILROAD First Mortgage Currency 4s Dated December 5, 1885 Maturing January 1, 2361 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, fully registerable. Registered bonds of $500, $1,000, $10,000 and $50,000. Authorized $50,000,000 Outstanding $50,000,000 Per mile . . 104,400 Security: These bonds are secured by a first mortgage on 479.11 miles of road, together with lancls, water rights, tracks, bridges, piers, depots, elevators, rolling stock, floating equipment, etc. They are secured by first mortgage on the road from Weehawken, N. J., to Buffalo, N. Y., 423.67 miles, and from Syracuse to Earlville, N. Y., 42.72 miles. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Trustee: Union Trust Company, New York. The West Shore Railroad Company was chartered under the laws of New York on December 5, 1885, as successor to the New York, West Shore & Buffalo Railway Company. The property is leased to the New York Central & Hudson River Railroad for 475 years from January 1, 1886, with the privilege of a 500-year extension. The lessee pays as annual rental an amount equal to interest on bonded debt. The entire capital stock of the West Shore Railroad Company is owned by the New York Central & Hudson River Railroad. These bonds are considered a legal investment for savings banks in Maine, New Ham]).shire and Rhode Island. ROME, WATERTOWN & OGDENSBURG RAILROAD First Consolidated Mortgage 5s, 4s and 33.^3 Dated July 1, 1874 Maturing July 1, 1922 Interest payable A])ril 1 and October 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $10,000,000 Outstanding 5s $9,076,000 33^s 500,000 4s 419,000 Per mile . . 24,100 Security: The above bonds are secured by a direct mortgage on 414.87 miles of road, equipment and future acquisitions. They are secured by a first mortgage on 377.5 miles of road, including the lines between Richland and Norwood, and Niagara Junction and Oswego, N. Y. They are further secured by a second mortgage on 37.38 miles of road subject to $130,000 Nor- [ 494 ] wood & Montreal First 5s of 1916, $175,000 Syracuse, Phoenix & Oswego First 6s of 1915, $375,000 Rome, Watertown & Ogdensburg Terminal Railroad First 5s of 1918 and $100,000 Oswego Railroad Bridge 6s of 1915. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad under the terms of its lease. Extension: These bonds originally were payable July 1, 1904, but by an agreement with the holders this date was extended from November 4, 1891, to July 1, 1922, the rate of interest being reduced from 7%. Trustee: Farmers' Loan & Trust Company, New York. The Rome, Watertown & Ogdensburg Railroad Company was chartered in New York in July, 1861, as the consolidation of the Watertown & Rome Railroad and the Potsdam & Watertown Rail- road Companies. As the result of consolidations of smaller lines, the company had developed by 1890 into a system of 643 miles, owned, leased and operated. On March 14, 1891, its entire property was taken over under lease in perpetuity by the New Y^ork Central & Hudson River Railroad Com- pany, the lessee guaranteeing the rentals of the leased lines of the lessor, 5% on the company's out- standing capital stock, and assuming all the funded obligations outstanding. On April 9, 1912, the Public Service Commission granted the application of the company to purchase the capital stock of the Rome, Watertown & Ogdensburg Company, together with the capital stock of the LHica & Black River Railroad Company, and to issue therefor $16,429,000 4% 30-year debentures. The First 5s of 1922 sold in 1902 on a 3.12 to 3.70 basis 1903 3.40 3.75 1904 3.50 3.80 1905 3.45 3.70 1906 3.50 4.00 1907 3.75 4.75 1908 3.87 4.15 1909 3.90 4.15 1910 3.95 4.25 1911 3.87 4.20 1912 4.05 4.25 The 33^s, 4s and 5s of 1922 are considered a legal investment for savings banks in New Hampshire, Massachusetts, Connecticut and Rhode Island. [ 495 ] NORWOOD & MONTREAL RAILROAD First Mortgage 5 s Dated March 6, 1886 Maturing Ajjril 1, 191G Interest payable AiJiil 1 and October 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Authorized $360,000 Outsta;nding $130,000 Per mile . . 10,000 Security: These bonds are secured by a first mortgage on the company's line from Norwood to the boundary line of New York, 13.0 miles, also upon all lands, buildings, eciuipment, franchises and incomes of the company. The bonds were ASSUMED by the Rome, Watertown & Ogdensburg Railroad Conipanv, and have been GUARANTEED as to PRINCIPAL and INTEREST by the New ^'ork Central & Hudson River Railroad Company under the terms of its lease. Equity: These bonds are prior in lion to the Rome, Watertown & Ogdensburg First Consolidated 3' is. 4s and 5s of 1922. Trustee: New York Trust Company, New York. The Norwood & Montreal Railroad Company was organized March 1, 1884, and its road (as above) was opened for traffic September 27, 1886. It was leased in that year to tlie Rome, Water- town & Ogdensburg Raih-oad Company, the rental being interest on its bonds. It was merged with the latter company in 1889, and became subject with it to the New York Central & Hudson River Railroad Company lease of INIarch, 1891. These bonds are considered a legal investiiieiit for savings bauks in Maine, New Hampshire, Massa- chusetts and Connecticut. OSWEGO RAILROAD BRIDGE COMPANY First Mortgage 6s Dated January 31, 1885 Maturing February 1, 1915 Interest payable Februnry 1 and August 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Authorized $100,000 Outstanding $100,000 Security: These bonds are secured by a first mortgage on the railroad bridge in the city of Oswego, together with all the real and personal property, incomes and franchises of the company . These bonds have been ASSUMED by the Rome, Watertown & Ogdensburg Railroad Com- pany, and have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company under the terms of its lease. [ 496 ] Equity: The above bonds are prior in lien to the Rome, Watertown & Ogdensburg Railroad First ConsoUdated 3J-2S, 4s and 5s of 1922. The Oswego Railroad Bridge Company was chartered in 1872 to construct tlie above-mentioned bridge. It was consolidated with the Rome, Watertown & Ogdensburg Railroad Company on April 15, 1885, and became subject with it to the New York Central & Hudson River Railroad Company's lease of 1891. These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massa- chusetts and Connecticut. SYRACUSE, PHOENIX & OSWEGO RAILROAD First Mortgage 6s Dated February 15, 188.5 INIaturing February 1, Ifll.'S Interest ])ayable February 1 and August 1 at the Grand Central Station, New York. Coupon bonds of $100 and $1,000. Authorized $400,000 Outstanding $175,000 Per mile . . 10,300 Seciuity : The above bonds are secured by a first mortgage on the company's line, extending from Wood- ward to Fulton, N. Y., 17.08 miles, together with lands, buildings, equipment, franchises and incemes, also an extension to Fulton belonging to the Fulton & Oswego Railroad Company. These bonds were ASSUMED l>y the Rome, Watertown & Ogdensburg Railroad Company, and have been GUARANTKKl) as to PRINCIPAL and INTEREST by the New York Central & Hudson River Ruilroad Company under tlie terms of its lease. Equity: These bonds are prior in lien to the Rome, Watertown & Ogdensburg First (Consolidated 3i'2S> 4s and 5s of 1922. Trustee: Bankers Trust Company, New York. The Syracuse, PhoenLx & Oswego Railroad Company was chartered November 29, 1871, to construct a road from Woodward to Fulton and the Syracuse Northwestern Railroad Company was chartered September 19, 1874, to build from Woodward to Syracuse. The two were consoli- dated under the name of the former Jime 10, 1875. After a reorganization in 1885 the property of the former was leased to the Rome, Watertown & Ogdensburg Railroad Company for 450 years. In 1889 the company was consolidated with the latter and became subject with it to the New York Central & Hudson River Railroad Company's lease of 1891. These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massa- chusetts and Connecticut. 497 ROME, WATERTOWN & OGDENSBURG TERMINAL RAILROAD First Mortgage 5s Dated March 12, 1888 Maturing May 1, 1918 Interest payable May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $1,000. Authorized $375,000 Security : Outstanding $375,000 Per mile . . 53,550 Equity : Trustee : The above bonds are secured by a first mortgage on the company's line from Rochester to Winsor Beach, N. Y., 7.3 miles, together with lands, buildings, rolling stock, leases, franchises and incomes. These bonds were ASSUMED by the Rome, Watertown & Ogdensburg Railroad Company, and have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company under the terms of its lease. These bonds are prior in lien to the Rome, Watertown & Ogdensburg First Consolidated 3i^s, 4s and 5s of 1922. Farmers' Loan & Trust Company, New York. These bonds were sold in 1909 on a 4.10 basis 1910 4.40 1911 4.30 (bid) December, 1912 4.70 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massa- chusetts and Connecticut. CARTHAGE, WATERTOWN & SACKET'S HARBOR RAILROAD Consolidated Mortgage 5s Dated July 1, 1891 Maturing July 1, 1931 Interest payable January 1 and July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $300,000 Security : Outstanding $300,000 Per mile . . 10,300 Trustee: These bonds are secured by a first mortgage on the company's road from Carthage to Sacket's Harbor, N. Y., via Watertown, including the terminals, lands, buildings, equipment and franchises of the same. The mileage covered is 28.96 miles. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. Guaranty Trust Company, New York. [ 498 ] The Carthage, Watertown & Sacket's Harbor Railroad was organized February 5, 1869, and opened for traffic in 1872. It was leased on February 1, 1872, to the Utica & Black River Railroad Company for the term of its corporate existence. The latter agreed to keep the property in repair and pay as rent 37 ^ 2'^7) of gross earnings. In 1886 the Utica & Black River Railroad Company was leased for the term of its corporate existence to the Rome, Watertown & Ogdensbui-g Railroad Company, the latter assuming all its obligations including its leases. The New York Central & Hudson River Railroad Company leased the entire property and rights of the Rome, Watertown & Ogdensburg Railroad Company in 1891. These bonds are considered a legal investment for savings banks in New Hampshire, Massachusetts and Rhode Island. OSWEGO & ROME RAILROAD First Mortgage 7s Dated May i-Z, 1865 Maturing May 1, 1915 Interest payable May 1 and November 1 at the Grand Central Station, New York. Coupon bonds of $500 and $1,000. Authorized $350,000 Outstanding $350,000 Per mile . . 13,000 Security : The above bonds are secured by a first mortgage on the company's line from Oswego to Rich- land, N. Y., 26.63 miles, together with buildings and equipment. This mortgage is prior in lien to any claim of the Rome, Watertown & Ogdensburg Railroad. These bonds were GUARANTEED as to INTEREST by the Rome, Watertown & Ogdens- burg Railroad Company. This guarantee has been ASSIJMED by tiie New York Central & Hudson River Railroad Company under the terms of its lease. Equity: These bonds are prior in lien to $400,000 Oswego & Rome Second Mortgage 5s of 1915. The Oswego & Rome Railroad was organized in April, 1863, and was opened for traffic January 1, 1866, at which time it was leased to the Rome, Watertown & Ogdensburg Railroad Company at an annual rental equal to the interest on the company's bonds and 8% on its outstanding capital stock. The Rome, Watertown & Ogdensburg Railroad Company was leased, in turn, to the New York Central & Hudson River Railroad Company for the term of its corporate existence in 1891. These bonds are considered a legal investment for savings banks in Maine. [ 499 J OSWEGO & ROME RAILROAD Second Mortgage ss Dated April 1, 1S!»1 Maluring Mny 1, 1915 Iiileresl payable Fehru.ary 1 uiid August 1 ai the Grand Ceiilial Slaliuu, New York. Coupon bonds of $1,000. Aulhorized $100,000 Outstanding $100,000 Per mile . . 14,800 Security: The above bonds are secured by a second mortgage on the comjjany's property covered by the first lien of the First Mortgage 7s of 1915. These bonds were GUARANTEED as to PRINCIPAL and INTEREST by the Rome, AVatertown & Ogdensburg Railroad Company by endorsement. This guarantee has been ASSUMED by the New York Central & Hudson River Railroad Company under the terms of its lease. Trustee: Central Trust Company, New York. These bonds sold in 1907 on a 4.55 basis 1908 4.15 1909 4.05 (bid) 1910 4.55 (asked) 1911 5.00 (bid) 1912 4.62 UTICA & BLACK RIVER RAILROAD First Mortgage 4s Y>nXiid May 1, 1890 Matining July 1, 1922 Interest ])ayablo .lanuary 1 and .July 1 at the Grand Central Station, New York. Coupon bonds of $1,000, registerable as to i)rinci])al. Autliori/.cd .$2,()(t(),()0(t Ont-stauding $ J, 050,000 Per mile . . l.S,000 Security: The above bonds are secured by a first mortgage on tlic (•()m|)any".s line from Utica to Ogdens- burg, N. Y., and branch to Clayton, totalling 150. l(j miles, together with all the lands, build- ings, equipment, leases and franchises belonging to the same. These bonds were GUARANTEED as to PRINCIPAL and INTEREST by the Rome, Watertown & Ogdensburg Railroad Company by endorsement. This guarantee is GUAR- ANTEED by the New York Central & Hudson River Railroad Company under the terms of its lease. Tru.stee: Central Trust Company, New York. [ 500 ] The Utica & Black River Railroad Company was chartered in New York January 31, 1853, as the Black River & Utica Railroad Company. The line was opened for traffic December 15, 1855. It was sold under foi-eclosure INIarch 31, 1860, and i-eorganized imder its jiresent name. Its entire property and leasehold interests were leased to the Rome, Watertown & Ogdensbm-g Railroad Com])any in 1886. The latter company was in turn leased by the New York Central & Hudson River Railroad Company in 1891. Tiicsc I)oik1s sold ill 1902 on a 3.33 to 3.47 basis 1903 3.45 3.70 1904 3.70 1905 3.40 1906 3.70 1907 3.75 1908 3.70 4.05 1909 3.77 1910 3.80 4.00 1911 4.00 December, 1912 4.62 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massa- chusetts and Connecticut. DUNKIRK, ALLEGHENY VALLEY & PITTSBURGH RAILROAD First Mortgage 41^5 Dated August 1, 1910 Maturing August 1, 1960 Interest payable February 1 and August 1 at New York. Coui)ou Iwnds of $1,000, registerable as to principal or fully rcgistcrable. Registered bonds of $1,000 and nuiltiples. Coupon and registered bonds interchangeable. Aulliorized $5,000,000 Outstanding $'2,900,000 Per mile . . 32,000 Provisions of Of the total amount authorized, $2,900,000 is oulslanrling as above, and the balance, issue: $2,100,000, has been reserved for extensions and betterments with rcsirictio'ns. Security: The above bonds are secured by a first mortgage on the company's road from Dunkirk, N. Y., to Titusville, Pa., 90.5 miles, together with lands, buildings, equipment and future acquisitions. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company under the terms of its lease. Trustee: Guaranty Trust Company, New York. The Dunkirk, Allegheny Valley & Pittsburgh Railroad Company was organized December 1, 1872, as a consolidation of the Dunkirk. Warren & Pittsburgh Railroad and the Warren & Venango Railroad Companies. The property of the company is leased to the New York Central & Hudson [ 501 ] River Railroad Company, but operated independently, the lessee paying as rental interest on the company's bonds and 3% on one-half the company's capital stock. These bonds are considered a legal investment for savings banks in Maine and New Hampshire. BOSTON & ALBANY RAILROAD Debenture 4s Dated October 1, 1893 Maturing October 1, 1913 Interest payable April 1 and October 1 at the Terminal Station, Boston. Coupon bonds of $1,000. Authorized $3,627,000 Outstanding $3,627,000 Security : These bonds are a direct obligation of the company, but are not secured by a mortgage. The indenture provides that no other mortgage shall be placed upon the property without jointly including the above issue under it. The above bonds have been GUARANTEED as to INTEREST by the New York Central & Hudson River Railroad Company under the terms of its lease. These bonds sold in 1902 on a 3.20 to 3.25 basis 1905 4.10 1906 3.75 1908 4.00 4.70 1909 4.25 (bid) 1910 4.45 (bid) 1911 4.45 (bid) These bonds are considered a legal investment for savings banks in New England except in Maine. BOSTON & ALBANY RAILROAD Debenture iHs Dated January 1, 1901 Maturing January 1, 1951 Interest payable January 1 and July 1 at Terminal Station, Boston. Coupon bonds of $1,000. Authorized $2,500,000 Outstanding $1,000,000 Security: The above bonds are a direct obligation of the Boston & Albany Railroad Company, but are not secured by a mortgage. The indenture provides that no other mortgage shall be placed upon the property of the company without jointly including the above issue under it. These bonds have been GUARANTEED as to INTEREST by the New York Central & Hudson River Railroad Company under the terms of its lease. [ 502 ] These bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.15 1911 4.20 December, 1912 4.40 These bonds are considered a legal investment for savings banks in New England except in Maine. BOSTON & ALBANY RAILROAD Debenture 3Hs Issued in 1882 under a Special Act of the Massachusetts Legislature Maturing April 1, 1952 Interest payable April 1 and October 1 at Terminal Station, Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Authorized $3,858,000 Outstanding $3,858,000 Security: The above bonds are a direct obligation of the Bo.ston & Albany Railroad Company, but are not secured by a mortgage. The indenture provides that no mortgage shall be placed on the property of the company without jointly including the above issue thereunder. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. These bonds were extended April 1, 1902, to the above maturity. At the same time the interest rate was reduced from 5% to 3}/^%. These bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.15 1911 4.15 December, 1912 4.40 These bonds are considered a legal investment for savings banks in New England except in Maine. BOSTON & ALBANY RAILROAD Debenture 4s Dated May 1, 1908 Maturing May 1, 1933 Interest payable May 1 and November 1 at Terminal Station, Boston. Coupon bonds of $1,000, registerable as to principal. Coupon and registered bonds interchangeable. Authorized $7,000,000 Outstanding $7,000,000 Security: The above bonds are a direct obligation of the Boston & Albany Railroad Company, but are not secured by a mortgage. The indenture provides that no mortgage shall be placed on the company's property without jointly including this issue thereunder. [ 503 ] These I)oml.s have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. These bonds were quoted in 1909 on a 4.00 to 4.12 basis 1911 4.15 (bid) December, 1912 4.45 (bid) These bonds arc considered a h-gal investment for savings banks in New Enghuid except in Maine. BOSTON & ALBANY RAILROAD Debenture 4s Dated May 1, 1909 Maturing May 1, 1934 Interest i)ayable May 1 and November 1 at Terminal Slalioii, Boston. Coupon bonds of $1,000. Registered bonds of $1,000, $5,000 and $10,000. Coupon and registered bonds interchangeable. Authorized $4,500,000 Outstanding $4,500,000 Security: The above bonds are a direct obligation of the Boston & Albany Railroad Company, but are not secured by a mortgage. The indenture further provides that no mortgage shall be placed on the company's property without including the above issue thereunder. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. These bonds are considered a legal investment for savings banks in New England except in INIainc. BOSTON & ALBANY RAILROAD Debenture 4s Dated May 1, 1910 Maiming M;iy 1, 1935 Jiilerc.sl i)ayal)le May 1 and November 1 at Buslon. Coupon ])onds of $1,000. IJegistered bonds of $1,000. ('(iiipoii and registered bonds iiiten'iiaiigcable. Authorized .$2,000,000 Oulslaiiding $2,000,000 Security: The above bonds are a direct obligation of the Boston & Albany Railroad Company, but are not secured by a mortgage. The indenture further provides that no mortgage shall be placed on the company's property without including the above issue thereunder. These bonds have been GUAR.iNTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. These bonds are considered a legal investment for savings banks in New England except in Maine. [504 ] BOSTON & ALBANY RAILROAD Debenture 43^s Dated July 1, WU Maturing July 1, 19^7 Interest payable January 1 and July 1 at the tJld Colony Trust Company, Boston. Coupon bonds of $1,000. Authorized $1,000,000 Outstanding $1,000,000 Security: The above bonds are a direct obligation of the Boston & Albany Railroad Company, but are not secured by a mortgage. The indenture further jirovides that no mortgage shall be placed on the company's property without including the above issue thereunder. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the New York Central & Hudson River Railroad Company by endorsement. These bonds are considered legal for saving banks in New England except Maine. NEW YORK CENTRAL & HUDSON RIVER RAILROAD Boston & Albany Equipment Trust 4J^s Dated October 1, VJVi Maturing $348,000 each Octolier 1 to October 1, 19!27 Lilcrest payable Ai)ril 1 and October 1 in New York. Coupon bonds of $1,000, rcgisterable as to principal. Authorized $7,500,000 Outstanding $5,'220,000 Provisions of Of the total amount authorized, $5,220,000 arc outstanding as above and the balance, issue: $2,280,000, has been reserved for additional equipment, which shall be issued up to 90% of the actual cost of equipment delivered to and held by the trustee. Security: Tlie abo\'e bonds were issued under a Trust Agreement between the New York Central & Hudson River Railroad Company and the trustee whereby the title of the equipment re- mains with the trustee as security for payment of principal and interest of the outstanding bonds. The title shall so remain until the railroad company has retired all of the same. Trustee: (iuaraiity Trust Company, New York. In regard to the abo\'e issue. The New York, New Haven & Iliulford Railroad Company has entered into an agreement to pay the New York Central & Hudson River Railroad Company one- half the money required to meet the obligations of this trust. Having done so, each of the two companies will, at its expiration, become the owner of one-half of this equipment. [ 505 ] NEW YORK CENTRAL & HUDSON RIVER RAILROAD Thirty-Year Debenture Gold 4s Dated January 1, 191'2 Maturing January 1, 1942 Interest payable January 1 and July 1 at New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000, $5,000, $10,000 and multiples of $10,000. Coupon and registered bonds are interchangeable. Authorized $50,000,000 Outstanding $8,995,000 Provisions of Of the total amount authorized, $8,995,000 are outstanding as above, and the balance, issue: $41,005,000, has been reserved for e.xtensions subject to the limitations indicated by the indenture. Security: The above bonds are a direct obligation of the New York Central & Hudson River Railroad, but are not secured by a mortgage. The company agrees in its indenture not to create any further mortgage without securing these bonds equally thereunder. This provision, however, shall not prevent the renewal or extension of any existing mortgage, nor does it apply in regard to the New York Central Collateral Trust Sj^s of 1998. Trustee : Guaranty Trust Company, New York. These bonds were issued for the purpose of acquiring the stock of the New York & Harlem Railroad Company, the Rome, Watertown & Ogdensburg Railroad Company and the Utica & Black River Railroad Company. They were offered in 1912 at 92 and interest through J. P. Morgan & Company to the stockholders of the above railroad companies. These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. NEW YORK CENTRAL LINES Equipment Trust 5s Dated November 1, 1907 Maturing $2,000,000 annually until November 1, 1922 Interest payable May 1 and November 1 at the Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $5,000, $10,000 and $50,000. Authorized $30,000,000 Outstanding $20,000,000 $10,000,000 of this issue had been redeemed to January 1, 1913. Security : The above bonds are a joint and several obligation of the New York Central & Hudson River Railroad, the Lake Shore & Michigan Southern Railway, the Michigan Central Railroad, the Cleveland, Cincinnati, Chicago & St. Louis Railway, and the Chicago, Indiana & Southern Railroad Companies. They are secured by equipment against which these certificates were issued at 90% of the cost of the equipment furnished. The indenture provides that the title to the equipment shall remain in the name of the trustee until the notes are fully paid. [ 506 ] These bonds are GUARANTEED as to PRINCIPAL and INTEREST by each of the several companies party to the trust agreement. Guaranty Trust Company, New York. NEW YORK CENTRAL LINES Equipment Trust 4J^s Dated January 1, 1910 Maturing $2,000,000 annually to January 1, 1925, inclusive Interest payable January 1 and July 1 at the Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $5,000, $10,000 and $50,000. Authorized $30,000,000 Outstanding $24,000,000 $6,000,000 of this issue had been redeemed to January 2, 1913. Security : The above bonds are a joint and several obligation of the New York Central & Hudson River Railroad, the Lake Shore & Michigan Southern Railway, the Michigan Central Railroad, the Cleveland, Cincinnati, Chicago & St. Louis Railway, and the Chicago, Indiana & Southern Railroad Companies. They are secured by equipment against which these certificates were issued at 90% of the cost of the equipment furnished. The indenture provides that the title to the equipment shall remain in the name of the trustee until the notes are fully paid. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by each of the companies represented in the trust agreement. Trustee: Guaranty Trust Company, New York. NEW YORK CENTRAL LINES Equipment Trust 4)^s Dated January 1, 1912 Maturing $1,000,000 annually from January 1, 1913, to January 1, 1927, inclusive Interest payable January 1 and July 1 at Guaranty Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $5,000, $10,000 and $50,000. Authorized $15,000,000 Outstanding $14,000,000 $1,000,000 of this i.ssue have been redeemed to January 1, 1913. Security : The above bonds are a joint and several obligation of the New York Central & Hudson River Railroad, the Lake Shore & Michigan Southern Railway, the Michigan Central Railroad, the Cleveland, Cincinnati, Chicago & St. Louis Railway, and the Chicago, Indiana & South- ern Railroad Companies. They are secured l)y <'(iui])ment against which these certificates were issued at 90% of the cost of the equipment furnished. The indenture provides that the title to the equipment shall remain in the name of the trustee until the notes are fully paid. [507 ] These bonds are GUARANTEED as to PRINCIPAL and INTEREST by each of the com- panies represented in the trust agreement. Trustee: Guaranty Trust Company, New York. NEW YORK CENTRAL LINES Equipment Trust 43/^s Dated January 1, 1913 Maturing $1,600,000 annually from January 1, 1914, to January 1, 1928, inclusive Inlcrest payable January 1 and July 1 in New York and London. Coupon bonds of $1,000, registerable as to jirincijial. Registered bond.s of $1,000, $5,000, $10,000 and $.>0,()00. Authorized $24,000,000 Outstanding $12,547,000 Security: The above bonds are a joint and several obligation of the New York Central & Hudson River Railroad, the Lake Shore & Michigan Southern Railway, the Michigan Central Railroad, the Cleveland, Cincinnati, Chicago & St. Louis Railway, the Pittsburgh & Lake Erie Railroad and the Toledo & Ohio Central Railroad Companies. They are secured by an equipment against which these certificates were issued at 90% of the actual cost of the equipment fur- nished. The indenture provides that the title to the equipment shall remain with the trustee until all the outstanding obligations are paid. These bonds are GUARANTEED as to PRINCIPAL and INTEREST jointly and sever- ally by each of the companies represented in the trust agreement. Trustee: (iuaranty Trust Company, New York. BOND DESCRIPTIONS OF CONTROLLED ROADS Following are de.scri])tions of bond issues of comiianies operated independently but controlled through stock ownersliij) h.y the New York Central & Hudson River Railroad Com])any: ST. LAWRENCE & ADIRONDACK RAILWAY First Mortgage 5s Dated July 1. 1896 Maturing July 1, 1990 Interest payable January 1 and July 1 at the New York Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $800,000 Outstanding $800,000 Per mile . . 18,600 Security: The above bonds are secured by a first mortgage on the company's line from Malone, N. Y., to Valleyfield, Can., and the line from JJeauhariiois to Adirondack Junction, Can., totalling 1 508 ] 43.07 miles, together with all lands, buildings, and franchises now owned or hereafter ac- quired, and all incomes. Equity: These bonds are prior in lien to $400,000 St. Lawrence & Adirondack Second 6s of 1996. Trustee: New York Trust Company, New York. The St. Lawrence & Adirondack Railway was organized July 2, 1892, under the laws of New York and the Dominion of Canada. On November 18, 1895, the company consolidated with the Malone & St. Lawrence Railway Company, and on July 2, 1896, with the Southwestern Railway Company. The entire capital stock of the St. Lawrence & Adirondack Railway Company is owned by the New York Central & Hudson River Railroad Company, wliich acquired its control in Jan- uary, 190.-). These bonds sold in 1906 on a 4.10 basis 1908 4.45 1909 4.35 1910 4.60 (bid) 1911 4..'50 (bid) 1912 4.60 (bid) ST. LAWRENCE & ADIRONDACK RAILWAY Second Mortgage 6s Dated October 1, 1896 Maturing October 1, 1996 Interest payable April 1 and Octolier 1 at the Equitable Trust Company, New York. Coupon bonds of $1,000, regislerabie as to jirincipal. Authorized $400,000 Outstanding $400,000 Per mile . . 9,300 Security: The above bonds are secured by a second mortgage on the company's proj)erty covered by the first lien of the First Mortgage 5s of 1996 (which see). Trustee: New York Trust C'ompany, New York. LITTLE FALLS & DOLGEVILLE RAILROAD First Mortgage 3 s Dated July 1, 1902 Maturing July 1, 1932 Interest payable January 1 and July 1 at American Exchange National Bank, New York. Coupon bonds of $100, $500 and $1,000. Authorized $250,000 Outstanding $250,000 Per mile . . 25,000 Security: The above bond.s are secured by a first mortgage on tiie company's road from Little Falls to Dolgeville, N. Y., 10.08 miles. [ 509 ] Trustee: United States Mortgage & Trust Company, New York. The Little Falls & Dolgeville Railroad was organized December 29, 1902, as a reorganization after foreclosure of a company of the same name. Almost the entire capital stock of the company is owned by the New York Central & Hudson River Railroad Company. These bonds are considered a legal investment for savings banks in Maine. RAQUETTE LAKE RAILWAY First Mortgage 5s Dated January 1, 1900 Maturing January 1, 1»50 Interest payable May 1 and November 1 at the Trustee's office, 15 Broad Street, New York. Coupon bonds of $1,000. Authorized $250,000 Outstanding $250,000 Per mile . . 13,900 Security: These bonds are secured by a first mortgage on the company's lines from Clearwater Junc- tion to Raquette Lake, N. Y., 18.1 miles. Trustee: T. P. Floyd, Esq., 15 Broad Street, New York. The Raquette Lake Railway Company was chartered February 7, 1899, under the laws of New York. The road was opened for traffic July 1, 1900. The company has a street railway charter, but the motive power is steam. It is operated by the New York Central & Hudson River Railroad Company as agent for the owners, under an agreement dated January 1, 1901. These bonds are considered a legal investment for savings banks in Maine. TORONTO, HAMILTON & BUFFALO RAILWAY First Mortgage 4s Dated June 1, 1896 Maturing June 1, 1946 Interest payable June 1 and December 1 at the Lincoln National Bank, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Coupon and registered bonds interchangeable. Authorized $3,280,000 Outstanding $3,280,000 Per mile . . 39,000 Security: The above bonds are secured by a first mortgage on 83.67 miles of the company's road, all in Ontario, together with etjuipment and future acquisitions. [ 510 ] Equity: These bonds are prior in lieu to $1,000,000 Toronto, Hamilton & Buffalo Railway Second Mortgage 4s of 1946. Trustee: American Trust Company, Boston. The Toronto, Hamilton & Buffalo Railway Company was chartered December 1, 1892, under the laws of the Dominion of Canada, as the successor to the Brantford, Waterloo & Lake Erie Railway Company. At present it is controlled Ijy the New York Central & Hudson River Raih-oad, the Canada Southern Railway, the Michigan Central Railroad and the Canadian Pacific Railway Companies. These bonds sold in 1902 on a 4.05 to 4.15 basis 1903 4.10 1904 4.25 4.30 1905 4.05 4.15 1906 4.25 1909 4.45 1910 4.50 4.75 1911 4.55 4.75 1912 4.55 4.65 TORONTO, HAMILTON & BUFFALO RAILROAD Second Mortgage 4s Dated June 1, 1904 Maturmg June 1, 1946 Interest payable June 1 and December 1 at the Lincoln National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 11,900 Security : The above bonds are secured by a second mortgage on the property covered by the first lien of the First Mortgage 4s of 1946 (which see). Guaranty The New York Central & Hudson River Railroad, the Michigan Central Railway, the Canada fund: Southern Railway and the Canadian Pacific Railway Companies have agreed to set aside, if necessary, 25% of their gross earnings upon the traffic delivered to and received from the Toronto, Hamilton & Buffalo Railway Company as a fund to meet (1) the interest on the First Mortgage 4s, (2) the interest on the above Second Mortgage 4s. For history, see above. [ 511 THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD COMPANY THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD COMPANY HISTORY The present New York, New Haven & Hartford Railroad was chartered August 6, 1872, under the laws of Connecticut, Massachusetts and Rhode Island, as the result of a consolidation of the New Y'ork Railroad Company and the New Haven Railroad Company. The New York Railroad Company had been chartered in Connecticut as early as 1844, and was opened in 1849. The New Haven Railroad Company was chartered in Connecticut even earlier, 1833, and was opened for traffic in 1839. Since the above-mentioned consolidation in 1872, the following companies have been merged and their obligations assumed by The New Y'ork, New Haven & Hartford Railroad Company: Company Date of merger 1. Stamford & New Canaan Railroad October 1, 1890 2. Hartford & Connecticut Valley Railroad December 21, 1892 3. New York, Providence & Boston Railroad February 13, 1893 4. Union Wharf Company October 18, 1895 5. Shore Line Railway March 18, 1897 6. Housatonic Railroad March 28, 1898 7. Shepang, Litchfield & Northern Railroad July 9, 1898 8. Danbury & Norwalk Railroad October 26, 1905 9. Providence & Springfield Railroad October 30, 1905 10. Rhode Island & Massachusetts Railroad (R. I.) November 3, 1905 11. Woonsocket & Pascoag Railroad November 3, 1905 12. Middletown, Meriden & Waterbury Railroad November 3, 1905 13. New Haven & Derby Railroad November 3, 1905 14. Rockville Railroad November 6, 1905 15. Colchester Railway December 16, 1905 16. Naugatuck Railroad January 31, 1906 17. Providence Terminal Company December 29, 1906 18. Boston & New York Air Line Railroad January 30, 1907 19. Pawtuxet Valley Railroad April 16, 1907 20. Waterbury & Pomerang Valley Railway April 22, 1907 21. Manufacturers' Railroad April 30, 1907 22. Torrington & Winchester Street Railway June 28, 1907 23. Meriden, Southington & Compounce Tramway June 28, 1907 24. Village Water Company January 31, 1908 25. The New England Railroad April 1, 1908 26. The Stafford Springs Street Railway June 30, 1908 27. The Consolidated Railway May 31, 1907 28. Newport & Wickford Railroad & Steamboat Company .... October 28, 1909 29. Farmington Street Railway December 10, 1909 {Contintjed on next page) [515 ] Company Date of merger 30. New Haven & Northampton Company October 26, 1910 31. Berkshire Railroad October 26, 1910 32. Rhode Island & Massachusetts Railroad (Mass.) October 26, 1910 33. Milford, Franklin & Providence Railroad December 19, 1910 34. Milford & Woonsocket Railroad December 19, 1910 35. Plymouth & Middleborough Railroad November 28, 1911 CONTROLLED RAILROADS The New York, New Haven & Hartford Railroad controls the Central New England Railway Company through a majority ownership of its capital stock and general mortgage income bonds. The New York, Ontario & Western Railway Company is also controlled through ownership of 22 of the 40 shares of preferred stock outstanding and 291,600 of the 581,140 shares of common stock outstanding June 30, 1912. By means of the Boston Railroad Holding Company, the entire common stock and $24,254,000 of the $27,054,000 preferred stock of which it owns. The New York, New Haven & Hartford Rail- road controls the Boston & Maine Railroad and its subsidiaries. The Boston Railroad Holding Company at present owns 6,543 shares of preferred stock out of a total of 31,498, and 219,189 shares of common stock out of a total of 395,050 of the Boston & Maine Railroad. The Main Central Railroad is, therefore, a part of the New Haven System, since it is, in turn, controlled by a majority ownership by the Boston & Maine Railroad. During the fiscal year of 1911 one-half of its holdings of preferred stock of the Rutland Railroad, amounting to 23,5203-^ shares, was acquired from the New York Central & Hudson River Railroad Company. Holdings of the two companies at ])resent constitute a majority of the total capital stock of the Rutland Railroad. In December, 1911, the New Haven applied for permission to pur- chase the balance of the Rutland Stock held l>.y the New York Central. The New York Pul)lic Service Commission granted the New Haven this privUege in May, 1912, but upon an appeal of the minority stockliolders, the New York Supreme Court remanded this privilege, maintaining that the Rutland Railroad is a competitor of the New Haven. Also, on July 1, 1911, an agreement between The New York, New Haven & Hartford Railroad Company and the New York Central Railroad Company went into effect, whereby the former is to share eqiuilly in the net results of the operations of the Boston & Albany Railroad, which was leased to the latter for a term of 99 years from July 1, 1900. In addition to the above holdings. The New York, New Haven & Hartfonl Railroad is and has been from its inception a half owner with the Pennsylvania Railroad in the construction of the New York Connccling Railroad, which is designed to be a new route for the interchange of traflic between the Pennsylvania and the New Haven Systems, instead of the present passenger and freight ferry service. The present investment of the former in the New York Connecting Railroad Company amounts to over $2,500,000, and by the time the railroad has been completed, it will cost approxi- mately $20,000,000. One other important controlling interest which The New York, New Haven & Hartford holds is in the New York, Westchester & Boston Railway Company, which was incorporated January 18, 1910, under the laws of New York. The railway extends from Harlem River at Willis Avenue, New York, through the Borough of the Bronx, and Westchester County, to Mt. Vernon, where the lines diverge, one extending north to White Plains, the other extending east to the Connecticut State Line at Port Chester, a total of 74.57 miles of track. The property of the railway is of high-grade con- struction, and it runs through a territory which includes some of the ra])idly growing residential sections adjacent to New York City. At the close of the fiscal year of 1912, nearly $30,000,000 had been spent on this property and upon this investment no return has as yet been realized. To be sure, tlie New Haven has been reimbursed to the extent of $17,200,000 of this amount through 1516 j the sale of First Mortgage Bonds of the New York, Westchester & Boston Railway Company. These bonds are guaranteed by the New Haven, and until the Westchester property is on a substantial earning basis, interest on the same will be charged against the earnings of the former. LEASED LINES At the close of the company's fiscal year, June 30, 1912, there were eight railroads included in the group of leased lines for which the company paid an annual rental of $4,474,347. A brief de- scription of each of these properties follows: 1. Old Colony Railroad The Old Colony Railroad was chartered in March, 1844, in Massachusetts. From the date of the opening of the company's original line in 1845, when thirty-seven miles were put into commission between Boston and Providence, to 1893, when its properties were leased to the New Haven, the Old Colony Railroad had grown, by various consolidations, extensions and leases, into a system of over 600 miles. In February, 1893, the Old Colony Railroad was leased for 99 years effective from March 1 of that year. By the terms of the lease, which expires March 1, 1992, The New York, New Haven & Hart- ford Railroad assumed all the liabilities of the Old Colony Railroad Company and agreed to pay as rental 7% dividends on its capital stock outstanding. It also provided for the exchange of stock on the basis of 9 shares of the parent company's stock for 10 shares of the subsidiary. The New York, New Haven & Hartford Railroad began operating this property on July 1, 1893. The obligations of the Old Colony Railroad Company, on account of the lines leased by it, are assumed by The New York, New Haven & Hartford Railroad only during the continuance of its lease of the parent road. 2. Boston & Providence Raikoad The Boston & Providence Railroad was chartered in July, 1831. Its line was opened in August, 1835, between Boston & Providence. It was leased to the Old Colony Railroad from April 1, 1888, for 99 years, at an annual rental of 10% on the capital stock outstanding, and a cash bonus of $1,300,000. From this cash bonus, a $32.50 dividend per share was paid May 2, 1888. The above lease will expire April 1, 1987. 3. Providence & Worcester Railroad The Providence & Worcester Railroad was chartered in November, 1845, as a consolidation of two companies of the same name, both chartered in 1844. Its main line from Providence to Wor- cester was open for traffic in 1847. Its property was leased to The New York, New Haven & Hartford Railroad for 99 years from July 1, 1892. The annual rental was fixed at 10% of the capital stock, interest on the company's funded debt and nominal charges for organization expenses. The above lease expu-es July 1, 1991. 4. Norwich & Worcester Railroad The Norwich & Worcester Railroad was chartered in June, 1836, under the laws of Connecticut and Massachusetts, as a consolidation of the Boston, Norwich & New London Railroad, and the Worcester & Norwich Railroad Companies. Its property was leased to The New England Railroad for 99 years from February 9, 1869. This lease was assumed by The New York, New Haven & Hart- [517] ford Railroad upon the merging of The New England Railroad in 1908. The annual rental is equal to interest on the company's bonds and 8% on its preferred stock. 5. Harlem River & Port Chester Railroad The Harlem River & Port Chester Railroad was constructed from cash advanced by The New York, New Haven & Hartford Railroad Company, for which they received $2,000,000 First Mortgage 7% Bonds dated October, 1873, on which they guarantee the principal and interest. The road was open for business November 24, 1873, and leased for 99 years subject to direct operation by The New York, New Haven & Hartford Railroad. 6. Holyoke & Westfield Railroad The Holyoke & Westfield Railroad was opened for business in October, 1871, and leased at that time to the New Haven & Northampton Company, which was merged into the New Haven System October 26, 1910. By the terms of the above lease, the New Haven & Northampton Company paid as rental 50% of gross earnings with a minimum guaranty of $8,000 a year, but on June 30, 1908, the lease was amended so as to provide in perpetuity for a fixed rental of $46,000 and taxes. 7. Providence, Warren & Bristol Railroad The Providence, Warren & Bristol Railroad was leased to the Old Colony Railroad for 95 years and 9 months from July 1, 1891, at an annual rental of 5% on the common stock of the company, 5% on the preferred stock for ten years and 6% for each year during the remainder of the lease, also all interest charges and taxes, and $500 for organization expenses. This lease should expire February 1, 1997. 8. Chatham Railroad The Chatham Railroad was open for business November 21, 1887, and was leased to the Old Colony Railroad at an annual rental equivalent to interest on the company's funded debt, taxes and organization expenses. The date of this lease was January 5, 1888. A new lease of the property of the Chatham Railroad was made effective as of January 1, 1911, for a term of 81 years and 2 months. This lease, with The New York, New Haven & Hartford Rail- road, supersedes the original one made with the Old Colony Railroad in 1888. ELECTRIC RAILWAYS When President Mellen assumed the direction of The New York, New Haven & Hartford Railroad, the trolleys of New England were developing in a most haphazard fashion. Upon the New Haven advent on the scene of action, it determined to convert these independent trolley lines to a function of greater usefulness, that of being tributary to the steam roads. The carrying out of this policy led to the creation of holding companies by means of which the New Haven might indirectly at least carry out its ultunate plans. Through the agency of these holding companies not only in Massa- chusetts, but also in Connecticut and Rhode Island, comparative order was brought out of chaos, and electric traction service was so organized and extended that transportation facilities were materially increased. The holding company created to operate the New Haven trolley lines in Massachusetts was the New England Investment & Security Company, a voluntary association organized in June, 1906. This company took over the street railway properties in Massachusetts, which had [ 518 ] ])revionsly l)een controlled by The Consolidated Railway Company (which was merged into The New York, New Haven & Hartford System May 31, 1907). The New England Invest- ment & Security Company controlled, October 1, 1909, through ownership of all or a majority of their stocks, the following companies : — Hartford & Worcester Street Railway Company Central Massachusetts Electric Company Marlborough & Westborough Street Railway Company Milford, Attleborough & Woonsocket Street Railway Company Springfield Railway Companies Springfield Street Railway Company Worcester & Blackstone Valley Street Railway Company Worcester Consolidated Street Railway Company Worcester & Holden Street Railway Company Worcester Railways & Investment Company Worcester & Southbridge Street Railway Company Uxbridge & Blackstone Street Railway Company The Supreme Judicial Court of Massachusetts handed down a decree in May, 1908, enjoining The New York, New Haven & Hartford Railroad Company from holding directly or indirectly the stocks of any Massachusetts Street Railway after July 1, 1909. The New Haven thereupon disposed of its holdings in the New England Investment & Security Company, and for the time being its trolley amalgamations in that Conamonwealth ceased. In July, 1910, The New York, New Haven & Hartford Railroad acquired by special authority of the Massachusetts Legislature the control of the Berkshire Street Railway, which but two months before had absorbed the Pittsfield Electric Street Railway. In January, 1912, authority was asked from the Massachusetts Legislature to form a new corporation to be known as the Worcester, Spring- field & Berkshire Street Railway Company to take over, consolidate and operate all street railways formerly controlled by the New Haven, but of late (owing to the above-mentioned decree of the Supreme Court of Massachusetts in May, 1908) held by the New England Investment & Security Company and the Berkshire Street Railway Company. The New York, New Haven & Hartford Railroad proposed to hold all the common stock of the new company and guarantee its dividends, the liqviidation value of the preferred shares, and the principal and interest of bonds and other obligations. Up to the date of publication this authority had not been given by the Legislature. The Connecticut properties of the New Haven System are held and operated by the Connecti- cut Company, incorporated in 1907, whose $40,000,000 capital stock is all owned by The New York, New Haven & Hartford Railroad and the Housatonic Power Company. In December, 1911, the New Haven divested itself of all its electric properties except those used for railway power purposes, by subleasing all its large electric and gas companies in Connecticut for 994 years from October 1, 1911, at an annual rental of $365,000, to a new corporation called the United Electric Light & Water Company of Connecticut, which it has been said represents the United Gas Improvement Company of Philadelphia. The New Haven's operating company in Rhode Island is known as the Rhode Island Company, which was organized in June, 1902. for the pin-pose of uniting under a single management the street railway, gas and electric properties of Providence and vicinity. The lines it operates serve the cities and towns of Providence, Warwick, Johnston, Smithfield, Cumberland, Barrington, Coventry, Warren, Bristol, East Greenwich, the Kingstons, and Narragansett. On June 30, 1911, the com- pany leased the properties of the Providence & Danielson Railway, the Sea View Railroad and the Narragansett Pier Railroad Companies. The Rhode Island Company, in turn, is controlled by The New York, New Haven & Hartford Railroad Company through the ownership of almost its entire capital stock. A company known as the Vermont Company has been formed to operate traction lines in the [519] State of Vermont. Its capital stock is owned by the New Haven. This company on June 30, 1911, operated 21 miles of road in and near Bennington, Vermont, and in March 1912 its property was leased to the Berkshire Street Railway Company for 99 years. ELECTRIFICATION Since 1895, when electric traction was substituted for steam power on the Nantasket Beach Railroad, the company has l)rcn gradually extending the use of electricity to those lines which could be advantageously oi)ci;ilf(l thereby. An overhead trolley system has been installed on the Provi- dence, Warren & Bristol Railroad, 22 miles, and the New Canaan Branch of The New York, New Haven & Hartford Railroad, 8 miles. The third-rail system is employed on the Berlin Branch, 4 miles, and the electric section of The New England Railroad. The complete electrification of the New York Division between New York and Stamford was effected in Jime, 1908, and in December, 1911, the Directors of the New Haven voted to authorize the electrification of the main line between Stamford and New Haven, a distance of 39 miles. This work is in the process of construction at the present time and when completed will mean the complete electrification of the main line between New York City and New Haven. STEAMSHIP LINES The holdings of the New Haven in steamboat properties have been, until lately, vei\y extensive, through the New England Na\'igation Company (whose entire stock is owned by the former) and the Hartford & New York Transportation Company. These holdings have changed hands so much that the situation is a somewhat complicated one. The New England Navigation Comi)any was incori)orated in Connecticut in 1904 as the Colonial Commercial Company. In 1905 it acquired control of the Old Colony Steamboat Company. In October, 1906, it purchased a majority of the capital stock of the Hartford & New York Transportation Company, and early in 1907 it acquired the entire capital stock of the Boston & Pliiladelijliia Steam- ship Company, operating a line of steamers between Boston, Providence and Philadelphia, in con- nection with the rail lines of The New York, New Haven & Hartford Railroad Company. Shortly after this (March, 1907) an agreement was entered into with the Merchants & Miners Transporta- tion Company for the acquisition of a half interest in the stock of that company, and since then close traffic relations have been maintained between these two companies. On January' 31, 1908, the New England Navigation Company purchased the assets and property of the Providence Seciu'ities Company, a holding company in Rhode Island, and early in 1911 the New Bedford, Martha's Vineyard & Nantucket Steamboat Company was acquired by the New Haven interests and put under operation by the New England Navigation Company. The New England Navigation Companj', imtil recently, owned a fleet of upwards of 30 steamers (among those the palatial steamers "Commonwealth," "Priscilla," "Puritan," "Plymouth," "Pil- grim," etc.) with a gross tonnage of approximately 90,000 tons. Its entire physical property was sold July 1, 1912, owing to legislation passed by Congress, to the New England Steamship Com- pany, whose capital stock and First Mortgage Bonds were tendered in payment for the same. The routes covered include the Fall River Line, the Providence & Block Island Line, the Norwich Line (between New York and New London) , the New York-New Haven Line, the New York & Bridge- port Line and the New York & Providence Line. The Hartford & New York Transportation Company, owned l)y the New England Navigation ('ompany, was incorporated in Connecticut in February, 1877. The company owns 7 steamboats, 7 tow boats and 30 barges, with a capacity of from 300 to 1,500 tons, and operates a line between Hartford and New York. In March, 1908, the company acquired the property of the United States Transportation Company, which was also a holding company of The New York, New Haven & [ 520 ] Hartford Railroad. The former company controls the Joy Line and the Neptune Line, and until recently controlled the INIaine Steamship Company, which was included in the consolidation plans of the Eastern Steamship Corporation. PROPERTY At the close of the company's fiscal year ending June ^50, 1012, The New York. New Haven & Hartford Railroad Company operated 2,091.5)0 miles. Of this amount l.'JlJS.o^ miles were owned in fee, 757.84 miles represented road operated under leases, and 95.54 miles operated under trackage rights. The main lines of the railroad extend from Woodlawn Jiniction, New York, to Providence, and from Boston, Massachusetts, to Hopewell Jiniction, New Y'ork. Many important branches connect with these main lines, and tap practically all the railroad territory of the States of Con- necticut, Rhode Island and Southern and Central IMassachusetts. Together with the New York, Ontario & AVesteru Railroad, whose lines connect New York with the Great Lakes at Oswego, the Boston & INIainc Railroad and the Maine Central Railroad which serve the territory of INIaine, New Hampshire and Northern Massachusetts, and the Rutland Rail- road in Vermont, the New Haven System, embracing its leased and controlletl lines, does practically the entire railroad transportation business of New England. The above roads, although controlled by the New Haven, are operated independently. CAPITALIZATION Taken from the official report of the company for the year i-nded June 30, 1912, we find the following capital figures for The New York, New Haven & Hartford Railroad and leased roads: Capital stock $179,583,100 Total funded debt 205,067,104 $384,650,204 Rentals capitalized at 5% 145,190,800 Gross capitahzation $529,841,004 Less securities owned 221,487,967 Net capitalization $308,353,037 Net capital per mile operated $147,466 Average miles operated 2,091.90 Net income to net capital 11-2% Fixed charges to net income 61.2% Margin of safety 38.8% As will be seen by the foregoing, the total capital outstanding of The New York, New Haven & Hartford Railroad proper is nearly $385,000,000. Based on the number of miles owned in fee, the amount of capital outstanding per mile amounts at the present time to nearly $311,000. This com- pares with the same relative figure of the following roads: New Y^ork Central & Hudson River Railroad . . . $502,359 Boston & Maine Railroad 122,348 During the past fiscal year rental charges consumed $7,259,540 of income. Capitalizing this at tlie rale of 5%, the resultant amount is in excess of $145,000,000, which brings the total gross [m J capitalization of the New Haven proper and leased roads up to approximately $530,000,000, or nearly $253,390 per mile of road actually operated. Assets in the shape of investment securities carried on the company's balance sheet at over $221,000,000, have tended to offset this enormous item. The net capital per mile of road operated was $147,466, as compared with $79,119 per mile, the net capitalization of the Boston & Maine, $154,374 (1911) of the New York Central, and $145,150 of the New York, Ontario & Western Railroad. From the above comparative figures, it would seem that The New York, New Haven & Hartford Railroad was more heavily capitalized than other systems of the same class, but when considered on the basis of its earnings, the showing is much better. For the fiscal year of 1912, The New York, New Haven & Hartford reported gross earnings of over $31,000 per niUe, a record for the system. The New York Central's gross earnings were $27,427 per mile, while the Boston & Maine was able to show but $20,495, and the Ontario & Western slightly over $15,000. The fact is further attested by the percentage of net earnings to net capitalization. In 1912 the net earnings of The New York, New Haven & Hartford Railroad amounted to 11.2% on its net capitalization as against approximately 7.8% for the New York Central, 6.6% for the Boston & Maine, and less than 3% in the case of the New York, Ontario & Western. In 1912 fixed charges of the New Haven consumed 61% of the total net income, leaving a factor of safety on the underlying securities and guarantees of the road of 39%. The margin of safety on the underlying securities of the New York Central, as shown by its 1911 figures, is approxi- mately 33%, and while the New York, Ontario & Western shows an average margin of safety over ten years of 43%, the Boston & Maine presents barely a 20% margin. In regard to the capitalization of the New Haven, a word ought to be said about the remark- able increase which has obtained in the same since 1906. The following shows the increase in capitalization : Fiscal year Stock Funded debt Notes 1912 $179,583,100 $205,067,104 $30,000,000 1906 83,357,100 112,543,725 Increase $96,226,000 $92,523,399 $30,000,000 Totalling the increase in capital stock, funded debt and notes outstanding, we find that the capital account of the system has been augmented by over $218,700,000. That this enormous in- crease in capital charges is primarily due to the expansion policy of the road which has been carried on in the past, will be shown by an analysis of the balance sheet of the system during the five years in question. Aside from over $63,000,000, which has gone from year to year into betterments and additions to the steam railroad, and which has been charged to capital, about $170,000,000 has been spent in outside enterprises since 1906. These comprise electric trolley lines, gathered into the Con- necticut and Rhode Island holding companies; expansion of water traffic in the hands of the New England Navigation Company, investments in the Boston Railroad Holding Company, which means the ownership of the Boston & Maine and the Maine Central Railroad Companies and their sub- sidiaries; large outlays on the New York, Westchester & Boston Railway now nearing completion; part ownership of the Rutland Railroad Company; and various other minor undertakings. A large part of the amount thus expended is being carried at the present time with no income returns. This is proving a heavy burden and yet it has been shouldered by the system as a whole with but a small deficit in 1911 and an actual surplus in 1912. The load has been further increased by the fact that investments which are showing earning power are not paying for themselves in interest returns — as is the case with the New York, Ontario & Western and the Boston & Maine holdings. The total return on all the investments of the system amounted to but a little over $6,750,000 in 1912, which is less than 4% on the capital invested, and the money so invested costs the company probably more than ^Yf/o- Furthermore the capital stock has paid an 8% dividend, up to June, 1913 (when the rate was reduced to 6%), and in six years this stock has been increased over $96,000,000. [522] CHARACTER OF TRAFFIC The most noteworthy fact about the New Haven System, and one which differentiates it from most of the large systems, is that its passenger earnings nearly equal its freight earnings; in other words, the freight business has averaged for the past ten years but 49% of the total traffic of the system. The steady increase in passenger traffic can be shown by a comparison of the earnings and pas- senger density over the past decade. In 1900 passenger earnings amounted to $16,750,000. In 1910 they had risen to $24,825,000, and, during the fiscal year of 1912, they still further increased to over $26,800,000. The passenger density showed a proportional increase, rising from 464,182 in 1900 to 745,531 in 1912. No other large railroad system in the country has ever reported a similar volume of passenger business; even the New York Central and the Pennsylvania Systems, which are large passenger carriers, showed, with record figures in 1911, passenger densities of only 513,532 and 428,777 respectively. Freight traffic, likewise, increased steadily and at about the same proportion as passenger traffic. Total freight earnings in 1900 were approximately $19,450,000. In 1910 they had increased to slightly over $30,000,000, and during the fiscal year of 1912 bettered the high figure of 1910 by over $2,000,000. Freight density increased from 657,709 in 1900 to 1,120,535 in 1912. In this respect the figures of the New Haven compare at a disadvantage with the New York Central and Pennsylvania Systems, which have averaged since 1900 better than 2,300,000 and 4,400,000 respectively. The annual reports of the company do not classify its freight tonnage, but it is well known that this is widely diversffied. Manufactured and miscellaneous articles make up the largest proportion of the total, and as manufacturing interests grow in the New England States there should be a cor- responding growth in that item of traffic. The fact that a large proportion of the freight traffic is made up of miscellaneous articles, the cost of handling which is liigh, results in an extremely high freight rate. The average for the ten years, ending Jime 30, 1912, is 1.41 cents per ton mile, while the Boston & Maine average, considered high, is only 1.11 cents. The Boston & Albany reports .63 cents per ton mile, and the Pennsylvania but .59 cents. EARNINGS Hand in hand with the steady increases shown in passenger and freight density, has gone a re- markable record of earnings during the past few years. Below is a statement of the gross and net earnings of the company based on the average miles operated for the years 1906 to 1912 inclusive: Fiscal Average Gross Per mile Net Per mile year miles earnings earnings 1906 . . . 2,062 52,984,332 $25,695 $17,761,736 $8,614 1907 2,060 55,601,936 26,991 17,751,855 8,617 1908 2,047 53,050,147 25,915 14,836,590 7,247 1909 2,043 54,347,631 26,602 18,267,324 8,941 1910 2,043 60,693,668 29,708 22,004,452 10,771 1911 2,041 62,153,435 30,452 21,254,802 10,417 1912 2,091 64,933,065 31,053 22,829,047 10,918 As will be seen by the foregoing figures, every year with the exception of 1908, when there was only a nominal set back, has been marked by an increase in gross earnings. During the fiscal year of 1912 the largest business in the company's history was reported. It is also gratifying to note that this increase in gross earnings was not so much the result of increasing rates (in fact they have tended to decrease rather than increase) as an increase in the volume of business done. [523] MAINTENANCE Maintenance Way Equipment $5,614,978 $5,668,524 5,479,089 5,638,784 5,983,826 6,913,169 6,130,606 5,906,357 7,132,376 6,461,772 6,980,036 7,193,424 6,829,361 8,046,992 Total Total maintenance maintenance per mUe $11,283,502 $5,472 11,117,873 5,397 12,896,995 6,300 12,036,963 5,892 13,594,148 6,654 14,173,450 6,940 14,876,353 7,114 The maintenance records of the company indicate that during the past six years the New Haven has followed a liberal policy in the maintenance of its property. Tabulated below are the amounts spent for maintenance of way and equipment, also based on the average miles operated for the years 1906 to 1912 inclusive: Fiscal year 1906 1907 1908 1909 1910 1911 1912 The above figiu-es show a general increase from year to year, the only curtailment appearing in 1909. The figures of 1908 and 1909, in the face of a general depression, were more than covered by maintenance charges during 1911 and 1912. These latter figines are high records of the company, and if maintained would place the company in the first rank among roads that spend large amounts for upkeep. ADDITIONS AND BETTERMENTS Din-ing the seven years ending 1912, $78,000,000 have ])een spent by The New York, New Haven & Hartford for additions and betterments, as follows: Year Equipment Betterments Total 1906 $3,711,731 $4,852,685 $8,564,416 1907 4,062,561 10,688,679 14,751,241 1908 16,070,962 5,417,411 21,488,373 1909 7,186,813 1,484,039 8,670,852 1910 3,019,806 1,177,264 4,197,070 1911 5,987,555 9,456,085 15,443,640 1912 3,389,163 1,464,033 4,853,196 Below is a statement of the various accotmts against which the above-named betterments were charged during the years in question: Year 1900 1907 1908 1909 1910 1911 1912 Income $3,000,000 Pro6t and Loss $5,564,416 3,000,000 1,579,264 Equipment $4,062,561 15,555,525 7,182,974 1,953,476 5,600,361 3,389,163 Replacement $1,066,330 387,195 Property $7,688,679 4,353,584 1,487,878 1,177,264 9,456,085 1,464,033 $3,000,000 $10,143,680 $37,744,060 $1,453,525 $25,627,523 Income $3,000,000 Profit and Loss 10,143,680 Equipment 37,744,060 Replacement 1,453,525 Property 25,627,523 Total 77,968,788 [624] Combining the amount charged for the purchase of new equipment with that which was spent upon property, shows that over $63,370,000 was charged during the above period to capital. As a result, the New Haven now owns 1,238 miles of railroad and 2,641 miles of track, as compared with 628 miles of railroad and 1,393 miles of track in 1906. It has electrified the system between Woodlawn and Stamford, purchased new electric equipment and built power houses. It actually owns nearly 38,000 freight and other cars, over 2,100 passenger service cars, and 1,098 locomotives as compared with 15,500 freight cars, 1,500 passenger service cars and 808 locomotives which were owned in 1906. It has eliminated grade crossings, made a tunnel at Providence and a cut at New Haven, completed the Harlem River & Port Chester, a six-track railroad now being electrified, and spent over $2,600,000 on new bridges. DIVIDENDS The New Haven has had an enviable dividend record. After its consolidation and reorganiza- tion in 1872, it paid 10%, and this rate was continued with but one exception — the passing of one quarterly payment in 1890 — through the depression of 1873-77 down to 1895. From that time up to June, 1913, 8% was paid. The present rate is 6%. This record has been maintained in the face of large increases in capital stock and in spite of the large amount of investment which is being carried in the capital account without return . STATISTICS On the following page are given capitalization, earnings and traflBc statistics of The New York, New Haven & Hartford Railroad, based on the average miles operated, for the year 1900, and the years 1905 to 1912 inclusive: [ 525 ] THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD Fiscal Capital Funded Rentals Gross Owned by Net Average Extra year stock debt @5% capital company capital miles operated 2,038 main track 1900 $26,832 $12,677 $43,942 $83,451 $11,555 $71,896 844 1905 38,554 17,922 39,873 96,349 29,327 67,022 2,075 882 1906 40,991 57,551 38,172 136,714 21,771 114,943 2,062 922 1907 47,262 111,024 54,416 212,702 23.226 189,476 2,060 941 1908 47,824 113,606 62,192 223,622 31,359 192,263 2,047 967 1909 48,947 114,969 58,097 222,013 41,705 180,308 2,043 1,011 1910 70,492 113,816 66,922 251,230 102,619 148,611 2,043 1,015 1911 87,603 104,374 62,244 254,221 100,279 153,942 2,041 1,039 1912 85,883 98,071 69,436 253,390 105,924 147,466 2,091 1,135 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus available year operating and general operating income net charges revenue $19,786 Way Equipment ex, $2,636 $2,318 $8 aense revenue $268 income $6,206 for dividends 1900 ,894 $5,938 $3,936 $2,270 1905 24,087 2,490 2,451 12,325 6,821 589 7,410 4,175 3,235 1906 25,695 2,723 2,749 11,609 8,614 1,055 7,669 4,729 4,940 1907 26,991 2,660 2,737 12,977 8,617 3,072 11,689 7,372 4,317 1908 25,915 2,923 3,377 12,368 7,247 4,063 11,310 8,739 2,571 1909 26,602 3,001 2,891 11,769 8,941 4,626 13,567 9,931 3,636 1910 29,708 3,491 3,163 12,283 10,771 5,042 15,813 10,527 5,286 1911 30,452 3,419 3,523 13,093 10,417 5,182 15,599 10,114 5,485 1912 31,053 3,266 3,848 13,021 10,918 5,591 16,509 10,107 6,402 Fiscal Divi- Other SurpI us Operatmg Conducting Total Fked Gross Net Per cent year dends charges expenses transporta- mamte- charges earnings income earned on to income to gross tion to nance to to gross tc gross to net capiUl earnings gross gross earnings capital capital stock $194 eammgs eammgs 1900 $2,076 69.94% 44.92% 25.0% 19.8% 23.8% 8.5% 8.3% 1905 3,084 151 71.72 51.13 20.6 17.3 25.0 11.0 8.3 1906 3,136 n,613 191 66.49 45.17 21.3 18.4 18.7 8.4 12.0 1907 3,352 965 68.02 48.07 20.0 27.3 12.6 6.1 9.1 1908 3,802 1,231 * 72.03 47.75 24.3 33.7 11.5 5.8 5.4 1909 3,859 223 * 66.38 44.24 22.1 37.3 12.0 7.5 7.4 1910 4,777 509 63.74 41.35 22.4 35.4 11.8 10.6 7.5 1911 6,103 618 * 65.87 43.07 22.8 33.2 11.9 10.1 6.2 1912 6,846 444 * 64.95 41.87 23.1 32.5 12.2 11.2 7.4 Fiscal Train Maintenance Conducting Train Rate per mUe Freight Train Freight Passenger, year mile per revenue transporta- mile density load toaU freight earnings train mile tion per earnings Per Per revenue traffic and (gross) revenue (net) passenger ton tons company V $2.00 $ Vay Equipment train mile $.015 209 48% 1900 267 $.235 $.901 5.602 $.018 657,709 15.527 1905 2.16 225 220 1.107 .612 .017 .014 839,959 223 49 19.598 1906 2.27 240 243 1.027 .762 .017 .014 915,909 236 50 22,102 1907 2.30 227 233 1.109 .736 .016 .014 935,761 238 50 23,034 1908 2.30 260 300 1.101 .645 .016 .014 873,311 243 48 33.211 1909 2.48 280 270 1.098 .834 .016 .014 916,504 271 49 37.834 1910 2.66 313 283 1.100 .965 .016 .014 1,039,980 293 50 39,417 1911 2.63 295 305 1.132 .900 .017 .0139 1,068,866 289 42 42,147 1912 2.60 280 330 1.116 .935 .017 .0137 1,120,535 292 49 41,872 * Deficit. [526] BOND DESCRIPTIONS Following are descriptions of the bond issues of The New York, New Haven & Hartford Railroad System, together with the bases on which they have sold during the decade ending December 31, 1912: THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD Harlem River & Port Chester First Gold 4s Dated May 2, 1904 Maturing May 1, 1954 Interest payable May 1 and November 1 at the Lincoln National Bank, New York, and First National Bank, Boston. Coupon bonds of $1,000, registerable as to principal. Exchangeable for registered bonds in denomination of $10,000. Authorized $15,000,000 Outstanding $15,000,000 Security: The above bonds are a direct obligation of The New York, New Haven & Hartford Railroad Company and are secured by a first mortgage on all the property and franchises of the Harlem River & Port Chester Railroad including the road from the Harlem River to the junction with the main line of the former at New Rochelle, 11.17 miles of first track. Trustee: United States Trust Company, New York. Tlie Harlem River & Port Chester Railroad Company was chartered in the State of New York in 1867, and was leased for 99 years from September 29, 1873, to The New York, New Haven & Hart- ford Railroad Company, which owns its entire $1,000,000 capital stock. These bonds sold in 1909 on a 4.00 basis (bid) 1910 4.00 to 4.03 basis 1911 4.05 1912 4.05 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massa- chusetts, Connecticut and Rhode Island. NAUGATUCK RAILROAD Debenture SJ^s Dated October 1, 1902 Maturing October 1, 1930 Interest payable April 1 and October 1 at New Haven. Coupon bonds of $1,000. Authorized $2,000,000 Outstanding $234,000 Security: The above bonds are a direct obligation of the Naugatuck Railroad Company but are not secured by a mortgage. They have been ASSUMED by The New York, New Haven & Hartford Railroad Company. For history, see Naugatuck Railroad First Mortgage Gold 4s, on page 533. These bonds are considered a legal investment for savings banks in New Hamjjshire, Massachusetts and Connecticut. [ 528 ] NEW YORK, PROVIDENCE & BOSTON RAILROAD General Mortgage 4s Dated April 1, 1892 Maturing April 1, 1942 Interest payable April 1 and October 1 at the Central Trust Company, New York. Coupon bonds of $1,000. Registered bonds of $1,000. Authorized $4,000,000 Outstanding $1,000,000 Per mile . . 10,129 Provisions of Although $4,000,000 is the authorized limit of this i.ssue, the listing application to the New issue: York Stock Exchange stated that the balance, $3,000,000, would not be issued. Security: The above bonds are secured by a first mortgage on 62 miles of double track road extending from Providence, R. I., to New London, Conn., and upon single track branches, 18 miles. These bonds are the only mortgage indebtedness upon this portion of the main line. Trustee: Treasurer of the State of Connecticut. The New York, Providence & Boston Railroad Company was organized under the laws of the State of Rhode Island in June, 1832, and under the laws of the State of Connecticut in May, 1832. It was merged into The New York, New Haven & Hartford Railroad on February 13, 1893, the latter assuming all its bonded indebtedness according to the terms of the merger. These bonds were quoted in 1909 on a 4.03 basis (bid) 1910 4.0.5 1911 4.05 December, 1912 4.00 (asked) These bonds are considered a legal investment for savings banks in New England. HOUSATONIC RAILROAD Consolidated Mortgage 5s Dated November 1, 1887 Maturing November 1, 193? Interest i)ayable May 1 and November 1. Coupon bonds of $1,000, registeralile as to jirincipal. Authorized $3,000,000 Outstanding $2,839,000 Per mile . . 32,200 Security: The above bonds are secured by a first mortgage on the company's line from Bridgeport to the northerly boundary of the State of Connecticut. They are further secured by a first mortgage on the interests of the company in the leases of the Berkshire Railroad, the Stock- bridge & Pittsfield Railroad, and the Danbury & Norwalk Railroad Companies, together [519] with all lands, water rights, buildings, improvements and terminal rights at Bridgeport and elsewhere on said railroads. The mortgage also includes all equipment, franchises, income and profits. The mileage covered, exclusive of leaseholds, totals 87.67 miles. Trustee : Treasurer of the State of Connecticut. The Housatonic Railroad Company was incorporated in May, 1836, under the laws of Connect- icut. The road was opened for traffic December 1, 1842. On October 18, 18i)'2, the company's property was leased for 99 years from July 1, 1892, to The New York, New Haven & Hartford Rail- road Company, the latter agreeing to pay 1% yearly upon the preferred stock of the lessor company. On March 28, 1898, under special laws of Connecticut, the Housatonic Railroad Company was con- solidated with The New York, New Haven & Hartford Railroad Company, and these bonds were assumed by the latter. These bonds are considered a legal investment for savings banks in New England. DANBURY & NORWALK RAILROAD Consolidated Mortgage 5s and 6s [ 6s July 1, 1880 Dated 5s July 1, 1890 Maturing July 1, 1920 I 5s July 1, 1892 Interest payable January 1 and July 1 at New Haven. Coupon bonds of $1,000. Authorized $500,000 Outstanding $500,000 Per mile . . 16,600 Security: The above bonds are secured by a mortgage on the Danbury & Norwalk Railroad Company's line extending from Danbury to South Norwalk, Conn., with branches, 29.59 miles. The entire property of the company is included under this mortgage, including depots, equipment, now owned or hereafter acquired; except the comi^any reserves the right to sell any property owned by it not necessary for the construction, operation or security of its railway. Trustee: Treasurer of the State of Connecticut. The Danbury & Norwalk Railroad Company was chartered in May, 1849. It was leased for 99 years from July 1, 1892, to The New York, New Haven & Hartford Railroad Company for the in- terest on its bonds and 5% on its capital stock. In October, 1905, the Danbury & Norwalk Railroad Company was merged into The New York, New Haven & Hartford Railroad Company, the latter at that time assuming all its funded obligations. These bonds are considered a legal investment for savings banks in New England. 530 ] Dated March 31, 1883 Aiitliorized $150,000 DANBURY & NORWALK RAILROAD General Mortgage 5s Interest payable April 1 and October 1 at New Haven. Coupon bonds of $1,000. Maturing April 1, 19'25 Outstanding $150,000 Per mile . . 4,150 Security: The above bonds are secured by a second mortgage on the company's line from Danbury, Conn., to tidewater on Long Island Sound and branches, 29.59 miles, together with all lands, buildings, ecjuipment, leases, franchises, and all property now owned or hereafter acquired, together with income and profits. Trustee: Treasurer of the State of Connecticut. For history, see page 530. These bonds are considered a legal investment for savings banks in New Hamp.shire, Massachusetts, Connecticut and Rhode Island. Dated June 1. 1905 Authorized $350,000 DANBURY & NORWALK RAILROAD First Refunding Mortgage 4s Interest payable June 1 and December 1 at New Haven. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $1,000. Coupon and registered bonds interchangeable in $5,000 lots. Maturing June 1, 1955 Outstanding $350,000 Per mile . . 11,600 Security : Trustee : The above bonds are secured by a mortgage on the company's line from Danbury, Conn., to tidewater on Long Island Sound, and branches, 29.59 miles, together with all lands, appur- tenances and franchises now owned or hereafter acquired. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company. Treasurer of the State of Connecticut. These bonds are considered a legal investment for savings banks in New Hampshire, Massachusetts, Connecticut and Rhode Island. [ 531 ] NEW HAVEN & DERBY RAILROAD Consolidated Mortgage 5s Dated May 1, 1888 Maturing May 1, 1918 Interest payable May 1 aud November 1 at New Haven. Coupon bonds of $1,000, registerable as to principal. Authorized $800,000 Outstanding $575,000 Per mile . . 39,500 Security: The above bonds are secured by a mortgage on the company's line from New Ha\en to Ansonia, Conn., and branch, totalling 14.55 miles, together with all buildings, equipment, franchises and other property now owned or hereafter acquired; also all incomes and profits. Trustee: Treasurer of the State of Connecticut. The New Haven & Derby Railroad Company was chartered in May, 1864. Its main line was opened for traffic August 1, 1871. The property of the company was leased to The New York, New Haven & Hartford Railroad Company for 99 years from July 1, 1892, at an annual rental equal to the interest on its bonds and 4% on its capital stock. By a deed dated November 3, 1905, the entire property of the New Haven & Derby Railroad was conveyed to The New York, New Haven & Hart- ford Railroad Company, the latter assuming all the funded obligations of the lessor. These bonds are considered a legal investment for savings banks in New England. PROVIDENCE & SPRINGFIELD RAILROAD First Gold 5s Dated July 1, 1892 Maturing July 1, 1922 Interest payable January 1 and July 1 at New York and Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $750,000 Outstanding $750,000 Per mile . . 27,046 Security: The above bonds are secured by a first mortgage on 27.73 miles of road from Providence to Douglas Junction, Mass. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company. Trustee: Farmers' Loan & Trust Company, New York. The Providence & Springfield Railroad Company was organized on January ;5(), 1857, as the Woonasquatucket Railroad Company, its name being changed to the present title in 1872. On October 30, 1905, it was merged into The New York, New Haven & Hartford Railroad Company. These bonds are considered a legal investment for savings banks in New England. [ 532 ] NAUGATUCK RAILROAD First Gold 4s Dated May "2, 1904^ Maturing May 1, VJoi Interest payable May 1 and November 1 at New York, Boston and New Haven. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $5,000. Authorized $2,500,000 Outstanding $2,500,000 Per mile . . 40,984 Security: The above bonds are secured by a first mortgage on (iO.Ho miles of road, mainly covering the line from Naugatuck Junction to Winsted, Conn., with branches. Trustee: Treasurer of the State of Connecticut. The Naugatuck Railroad Company was chartered in May, 1845, and opened throughout Sep- tember 24, 1849. In 1887 (April 1) it was leased to The New York, New Haven & Hartford Rail- road Company for 99 years at an annual rental equivalent to bond interest and 10% dividends. By a deed dated January 31, 1906, the property of the Naugatuck Railroad Company was con- veyed to The New York, New Haven & Hartford Railroad Company, the latter assuming all its funded obligations. These bonds are considered a legal investment for savings banks in New England. BOSTON & NEW YORK AIR LINE RAILROAD First Gold 4s Dated August 1, 1905 Maturing August 1, 1955 Interest payable February 1 and August 1 at New York, Boston and New Haven. Coupon bonds of $1,000, registerable as to principal. Exchangeable for fully registered bonds in lots of $5,000. Authorized $5,000,000 Outstanding $3,777,000 Issuable for improvements 1,223,000 Outstanding per mile . . 73,668 Security: The above bonds are secured by a first mortgage on 51.27 miles of road from New Haven to Willimantic, Conn. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company by endorsement. Trustee: Treasurer of the State of Connecticut. The Boston & New York Air Line Railroad Company succeeded the New Haven, Middletown, & Willimantic Railroad Company, organized in the State of Connecticut in 1867. On January 30, [ 533 ] 1907, it was merged into The New York, New Haven & Hartford Railroad Company, the latter assuming all its funded indebtedness. These bonds were quoted in 1909 on a 4.03 basis (bid) 1910 4.05 1911 4.07 1912 4.03 These bonds are considered a legal investment for savings banks in New England. PROVIDENCE TERMINAL COMPANY First Gold 4s Dated March 1, 1906 Maturing March 1, 1956 Interest payable March 1 and September 1 at New York, Boston and New Haven. Coupon bonds of $1,000. Registered bonds of $5,000. Authorized $7,500,000 Outstanding $4,000,000 Security : These bonds are secured by a first mortgage on the entire property of the company, which in- cludes a line of railroad extending from the Union Station, Providence, to a connection with the tracks of the Providence & Worcester Railroad Company (about 3 miles of double track), terminal facilities and passenger station of the above company at Providence, a tunnel 5,061 feet in length, and a drawbridge across the Seekonk River. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company by endorsement. Trustee: Rhode Island Hospital Trust Company, Providence. The Providence Terminal Company was incorporated under the laws of the State of Rhode Island in May, 1891, as the New York, Providence & Boston, and the Old Colony Railroad Terminal Cofnpany. On July 13, 1904, its name was changed to its present title, and on December 29, 1906, it was merged into The New York, New Haven & Hartford Railroad Company, the latter assuming all its funded debt. These bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.07 1911 4.10 December, 1912 4.25 These bonds are considered a legal investment for savings banks in New England. [ 534 ] WORCESTER & CONNECTICUT EASTERN RAILWAY First Gold 414s Dated October 1, 1902 Maturing January 1, 1943 Interest payable January 1 and July 1 at New York and Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $3,100,000 Outstanding $1,992,000 Provisions of Although the authorized limit of this issue is $3,100,000, it was stated in the listing application issue: to the New York Stock Exchange that no further bonds would be issued after the above- mentioned $1,992,000. Security : The above bonds are secured by a first mortgage on all the property and leases of the company, including a hydraulic electric power plant in the town of Killingly and the leases of the Worces- ter & Webster, and Webster & Dudley Street Railway Companies and all the stock, and all but $50,000 of the bonds of these companies. The lines of railroad included in this mortgage are 52 miles in length, and connect the towns of Thompson, Putnam, Killingly, Brooklyn, Plainfield, Sterling, Griswold, and Preston, Conn., and leased lines extend north to Worcester, Mass. Sinking fund: From 1908 on, a sinking fund of not exceeding 1% of the bonds outstanding is to be annually provided for the redemption of these bonds at a price not higher than a 3^4 basis, upon three weeks' published notice given in December of each year. Trustee: New York Trust Company, New York. The Worcester & Connecticut Eastern Railway Company was originally chartered in Connec- ticut as the Thompson Tramway Company, on April 30, 1901. It took the above name January 24, 1902, and in May, 1904, its name was changed again to The Consolidated Railway Company. This latter company was merged into The New York, New Haven & Hartford Railroad Company May 31, 1907, and its obligations became direct obligations of the latter company at that time. These bonds were quoted in 1910 on a 4.25 basis (bid) 1911 4.35 December, 1912 4.30 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Rhode Island and Connecticut. NEW HAVEN STREET RAILWAY First Gold 5s Dated September 1, 1893 Maturing September 1, 1913 Interest payable March 1 and September 1 at New York and Boston. Coupon bonds of $500 and $1,000, registerable as to principal. Authorized $600,000 Outstanding $600,000 Security: The above bonds are secured by a first mortgage on all the property, rights and franchises of the New Haven Street Railway Company, including property and franchises of the State [ 535 ] Street Horse and New Haven & Morris Cove Railway Companies; also all railway and ])rop- erty owned by the New Haven Street Railway and all future acquisitions. The company operates a single-track railway thirty miles in length in the towns of New Haven and East Haven, Conn. Trustee: American Trust Company, Boston. The New Haven Street Railway was chartered under the laws of Connecticut in 1893. On October 31, 1898, it was consolidated with the Fair Haven & Westville Railway Company and the New Haven & Centerville Street Railway Company imder the name of the Fair Haven & Westville Railroad Company, which, in turn, consolidated into The Consolidated Railway Company on May 20, 1904. On May 31, 1907, The New York, New Haven & Hartford Railroad Company acquired The Consolidated Railway, assuming all its debts. NEW HAVEN STREET RAILWAY Consolidated Mortgage 5s Dated June 1, 1894 Maturing June 1, 1914 Interest payable June 1 and December 1 at the American Trust Company, Boston. Coupon bonds of $1,000. Authorized $250,000 Outstanding $!250,000 Security: The above bonds are secured by a mortgage on 21.83 miles of street railway in and around New Haven, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: American Trust Company, Boston. For history, see above. These bonds are considered a legal investment for savings banks in Rhode Island. NEW HAVEN & CENTERVILLE STREET RAILWAY First Mortgage 5s Dated September 1, 1893 Maturing September 1, 1933 Interest payable March 1 and September 1 at New Haven. Coupon bonds of $1,000. Authorized $625,000 Outstanding $283,000 Per mile . . 55,000 Security: The above homls arc sccur(>d by a fir.st mortgage on 5.11 miles of the company's traction lines in and around New Haven, Conn. I 53G I These bonds have been ASSUMED by The New York, New Haven & Hartford Raih-oad Company. Trustee: Treasurer of the State of Connecticut. The New Haven & Centerville Street Railway Company was consolidated into the Fair Haven & Westville Street Railroad October 31, 1898. The latter, in turn, was merged with The Consoli- dated Railway Company on May 20, 1904. The New York, New Haven & Hartford Railroad Com- pany took over the property of The Consolidated Railway Company May 31, 1907, assuming at that time all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. MERIDEN HORSE RAILROAD Consolidated Mortgage 5s Dated January 1, 1894 Maturing January 1, 1924 Interest payable January 1 and July 1 at Girard Trust Comjiany, Philadelphia. Coupon bonds of $1,000. Authorized $500,000 Outstanding $415,000 Per mile . . 20,700 Security: The abo\c bonds arc secured by a mortgage on the company's property including 20.3 miles of traction lines extending from Meriden to Wallingford, Conn. These bonds have been ASSUMED by The New York, New Ha\en & Hartford Railroad Company. Trustee: Girard Trust Company, Philadelphia. The Meriden Horse Railroad Company was succeeded by the Meriden Electric Railroad Com- pany, which was merged with The Consolidated Railway Company on June 27, 1904. The New York, New Haven & Hartford Railroad Company took over the property of The Consolidated Rail- way Company May 31, 1907, assuming at that time all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. 1 537 j NORWICH STREET RAILWAY First Mortgage 5s Dated October 2, 1893 Maturing October 2, 1923 Interest payable April 1 and October 1 at the American Trust Company, Boston. Coupon bonds of $1,000. Authorized $350,000 Outstanding $350,000 Per mile . . 20,500 Security : The above bonds are secured by a first mortgage on the entire property of the Norwich Street Railway, including 17 miles of traction lines situated in the City of Norwich, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: American Trust Company, Boston. The Norwich Street Railway Company was merged with The Consolidated Railway Company September 29, 1904. The New York, New Haven & Hartford Railroad Company took over the property of The Consolidated Railway Company May 31, 1907, assuming at that time all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. MONTVILLE STREET RAILWAY First Mortgage 5s Dated May 1, 1900 Maturing May 1, 1920 Interest payable May 1 and November 1 at the American Trust Company, Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $350,000 Outstanding $250,000 Per mile . . 25,000 Security : The above bonds are secured by a first mortgage on the entire property of the Montville Street Railway Company, including 10.46 miles of traction lines extending from Norwich to New London, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: American Trust Company, Boston. The Montville Street Railway Company was merged September 29, 1904, with The Consoli- dated Railway Company, which, in turn, was taken over by The New York, New Haven & Hartford Railroad Company on May 31, 1907, the latter assuming all its funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. [ 538 ] NEW LONDON STREET RAILWAY First Mortgage 5s Dated October 2, 1893 Maturing October 2, 1923 Interest payable April 1 and October 1 at the American Trust Company, Boston. Coupon bonds of $1,000. Authorized $150,000 Outstanding $150,000 Per mile . . 24,000 Security: The above bonds are secured by a first mortgage on the property of the New London Street Railway including 6.2(5 miles of traction line situated in New London, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: American Trust Company, Boston. The New London Street Railway Company was consolidated with The Consolidated Railway Company on October 22, 1904. The New York, New Haven & Hartford Railroad Company took over the property of The Consolidated Railway Comjiany May 31, 1907, assuming at that time all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. MIDDLETOWN HORSE RAILROAD First Mortgage 5s Dated December 1, 1894 Maturing December 1, 1914 Interest payable June 1 and December 1 at Middletown, Conn. Coupon bonds of $500. Authorized $150,000 Outstanding $150,000 Per mile . . 21,000 Security: The above bonds are secured by a first mortgage, subject to the lien of the Portland Street Railway First 5s of 1916, on 7.01 miles of traction lines belonging to the Middletown Horse Railroad Company extending from Middletown to Portland, Conn. These bonds ha\-e been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: Treasurer of the State of Connecticut. The Middletown Horse Railroad Company was merged November 28, 1904, with The Consol- idated Railway Company. The New York, New Haven & Hartford Railroad Company took over the property of The Consolidated Railway Company May 31, 1907, assuming at that time all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. [ 539 ] PORTLAND STREET RAILWAY First Mortgage 5 s Dated November 1, 1896 Maturing November 1, 1916 Interest payable May 1 and November 1 at Middletown, Conn. Coupon bonds of $500. Authorized $75,000 Outstanding $30,000 Per mile . . 10,700 Security: The above bonds are secured by a first mortgage on the company's line 2.8 miles, situated in Portland, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: Treasurer of the State of Connecticut. The Portland Street Railway Company was consolidated into the Middletown Horse Railroad Company January 12, 1898. For history of the latter, .see page 539. These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecticut and Rhode Island. HARTFORD, MANCHESTER & ROCKVILLE TRAMWAY COMPANY First Mortgage 5s Dated October 1, 1894 Maturing October 1, 1924 Interest payable April 1 and October 1 at the City Bank, Hartford. Coupon bonds of $1,000. Authorized $300,000 Outstanding $200,000 Per mile . . 11,800 Security: The above bonds are secured by a first mortgage on 17 miles of the company's road. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. The Hartford, Manchester & Rockville Tramway Company was merged on March 26, 1906, into The Consolidated Railway Company. On May 31, 1907, The New Y^ork, New Haven & Hart- ford Railroad Company took over the property of The Consolidated Railway Company, assuming at that time all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. I 510 ] HARTFORD STREET RAILWAY First Gold 4s Dated September 1, 1900 Maturing September 1, 1930 Interest payable March 1 and September 1 at New York and Boston. Coupon bonds of $1,000, registerable as to principal. Authorized $3,000,000 Outstanding $2,500,000 Provisions of Although $3,000,000 is the authorized limit of this issue, it was stated in the listing applica- issue: tion to the New York Stock Exchange that no more bonds would he issued than the above. Security: The above bonds are secured by a first mortgage on all the property, rights and franchises of the company now owned or hereafter acquired, including the street railway line in Hartford, Conn., and between the towns of Hartford, Wethersfield, Newington, West Hartford, Bloom- field, Windsor, and South Windsor, Conn., in all about 76 miles. Trustee: Treasurer of the State of Connecticut. The Hartford Street Railway Company was chartered under the laws of the State of Connecti- cut July 1, 1862, as the Hartford & Wethersfield Horse Railroad Company. The name was changed to its present title in 1893. On September 19, 1905, it was consolidated into The Consolidated Rail- way Company, which, in turn, was merged into The New York, New Haven & Hartford Railroad Company on May 31, 1907. At that time, the latter assumed all the funded indebtedness of The Consolidated Railway Company, including the above issue. These bonds are considered a legal investment for savings banks in Rhode Lsland. HARTFORD STREET RAILWAY Debenture 4s Series " M " Dated September 1, 1900 Maturing January 1, 1930 Interest payable January 15 and July 15 at New Haven. Coupon bonds of $1,000. Authorized $165,000 Outstanding $165,000 Security: The above bonds are a direct obligation of the Hartford Street Railway, but are not secured by a mortgage. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. For history, see above. [ 5U ] GREENWICH TRAMWAY COMPANY First Mortgage 5s Dated July 1, 1901 Maturing July 1, 1931 Interest payable January 1 and July 1 at the New York Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $400,000 Outstanding $320,000 Per mile . . 35,000 Security: The above bonds are secured by a first mortgage on the company's property, including 9.1 miles of traction lines extending from the New York State Line to Stamford, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: New York Trust Company, New York. The Greenwich Tramway Company was consolidated with The Consolidated Railway Company on September 19, 1905. The New York, New Haven & Hartford Railroad Company took over the property of The Consolidated Railway Company May 31, 1907, assuming all the latter's funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. BRANFORD ELECTRIC COMPANY First Mortgage 5s Dated October 1, 1897 Maturing October 1, 1937 Interest payable April 1 and October 1 at the New Haven Trust Company, New Haven. Coupon bonds of $1,000. Authorized $100,000 Outstanding $63,000 Per mile . . 12,000 Security: The above bonds are secured by a first mortgage on 5.15 miles of road extending from East Haven to Branford, Conn., the property of the Branford Light & Water Company. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: New Haven Trust Company, New Haven. The Branford Electric Company was chartered in 1895, and its name was subsequently changed to the Branford Light & Water Company. The latter company was merged into The Consolidated Railway Company September 19, 1905. The New York, New Haven & Hartford Railroad Company [542 ] took over the property of The Consolidated Railway Company on May 31, 1907, assuming at the same time all the latter's fimded indebtedness. These bonds are considered a legal investment for savings banks in Rhode Island. TORRINGTON & WINCHESTER STREET RAILWAY First Mortgage 5s Dated December 1, 1897 Maturing December 1, 1917 Interest payable June 1 and December 1 at Winsted, Conn. Coupon bonds of $1,000, registerable as to principal. Authorized $150,000 Outstanding $150,000 Per mile . . 12,500 Security: The above bonds are secured by a first mortgage on 12.4 miles of the company's electric road extending from Torrington to Winchester, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: Treasurer of the State of Connecticut. The Torrington & Winchester Street Railway Company was consolidated with The New York, New Haven & Hartford Railroad Company on June 28, 1907, at which time the latter assumed all its funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. MERIDEN, SOUTHINGTON & COMPOUNCE TRAMWAY COMPANY First Mortgage 5s Dated August 15, 1898 Maturmg July 1, 1928 Interest payable January 1 and July 1 at the Trust Company of America, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $200,000 Outstanding $175,000 Per mile . . 15,000 Security : The above bonds are secured by a first mortgage on the company's line extending from Meri- den to Lake Compounce and Plainville, Conn., 11.64 miles. [ 543 ] These bonds Company. been ASSUMED by The New York, New Haven & Hartford Railroad Trustee: Trust Company of America, New York. The Meriden, Southington & Compounce Tramway Company was consolidated with The New York, New Haven & Hartford Railroad Company on June 28, 1907, at which time the latter assumed all its funded obligations. These bonds are considered a legal investment for savings banks in Rhode Island. PAWTUXET VALLEY RAILROAD First Mortgage 4s Dated April 1, 1900 Maturing April 1, 1925 Interest payable April 1 and October 1 at New Haven. Coupon bonds of $1,000. Authorized $160,000 Outstanding $160,000 Per mile . . 28,000 Security Trustee : The above bonds are secured by a first mortgage on the road of the company from Pontiac to Hope, R. I., 5.67 miles. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Treasurer of the State of Connecticut. The Pawtuxet Valley Railroad was chartered August 27, 1872, and was opened for traffic August 1, 1874. It was leased to the New York, Providence & Boston Railroad Company for 99 years from July 1, 1884, at an annual rental of interest on the company's bonds, 7% on its capital stock, and other charges. This lease was assigned to The New Y'ork, New Haven & Hartford Railroad Company upon the merger of the New York, Providence & Boston Railroad Company with it in 1893. On April 16, 1907, the Pawtuxet Valley Railroad Company was formally consolidated with The New York, New Haven & Hartford Railroad Companj% the latter assuming all its funded obligations. These bonds are considered a legal investment for savings banks in New England, except Massachusetts. [ 544 ] THE NEW ENGLAND RAILROAD Consolidated Gold 4s and 5s Dated September 2, 1895 Maturing July 1, 1945 Interest payable January 1 and July 1 at New York and Boston. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $17,500,000 Outstanding (4s) $10,000,000 (5s) 7,500,000 Per mile .... 48,200 Security: The above bonds are a direct mortgage on the franchises, railroad totalling 363.15 miles, and other property of the company, and subject only to the New York & New England Railroad Boston Terminal P'irst 4s of 1939 on certain property in Boston, Mass. The company owns 213 miles of road extending from Boston, Mass., to Hopewell Junction, N. Y., also valuable terminal property at Boston comprising docks, wharves, a grain elevator, freight houses, and yards. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company. Trustee: Manhattan Trust Company, New York. The New England Railroad was chartered August 28, 1895, as the successor to the New York & New England Railroad Company, whose property was sold under foreclosure. On April 1, 1908, The New England Railroad Company was merged into The New York, New Haven & Hartford Rail- road Company, the latter assuming all its funded indebtedness. The 4s of 1945 were quoted in 1909 on a 4.00 basis (bid) 1910 4.05 1911 4.04 1912 4.05 The 5s of 1945 were quoted in 1909 on a 4.10 basis (bid) 1910 4.12 1911 4.15 December, 1912 4.35 These bonds are considered a legal investment for savings banks in New England. [ 545 ] THE STAFFORD SPRINGS STREET RAILWAY First Mortgage 5s Dated January 1, 1907 Maturing July 1, 1956 Interest payable January 1 and July 1 at New Haven. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $5,000. Authorized $500,000 Outstanding $400,000 Per mile . . 31,000 Security: The above bonds are secured by a first mortgage on 12.9 miles of the company's road from Rockville to Stafford Springs, Conn. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad. Trustee: Treasurer of the State of Connecticut. The Stafford Springs Street Railway Company was consolidated with The New York. New Haven & Hartford Railroad Company on June 30, 1908, at which time the latter assumed all its funded obligations. NEW HAVEN & NORTHAMPTON COMPANY Refunding Consolidated 4s Dated June 1, 1906 Maturing June 1, 1956 Interest payable June 1 and December 1 at New Haven. Coupon bonds of $1,000, registerable as to principal. Exchangeable for registered bonds in lots of $5,000. Authorized $10,000,000 Outstanding $2,400,000 i'er mile . . 19,000 Provisions of The above bonds were originally issued as follows: $3,900,000 to reimburse The New York, issue: New Haven & Hartford Railroad Company for certain bond issues, and the remainder, $6,100,000, to cover the cost of past and future double tracking, eliminating grade crossings, widening and deepening the East Cut at New Haven and otherwise improving the road. Security: The above bonds are secured by a first mortgage on 127 miles of road; in part, the line from New Haven, Conn., to Shelburne Junction, Mass., together with all the property of the com- pany now owned or hereafter acquired. Guarantee: These bonds were ASSUMED by The New York, New Haven & Hartford Railroad Company. Trustee: Treasurer of the State of Connecticut. The New Haven & Northampton Company was chartered under the laws of Massachusetts and Connecticut in 1836, and was leased for 99 years from 1887 to The New York, New Haven & [ 546 ] Hartford Railroad Company, into which it was merged on October 26, 1910. At that time the latter assumed all its funded indebtedness. These bonds were quoted in 1909 on a 4.05 basis (bid) 1910 4.05 1911 4.10 December, 1912 4.25 These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Connecticut. THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD Convertible Debenture 6s Dated January 15, 1908 Interest payable January 15 and July 15 at Ne Maturing January 15, 1948 York and Boston. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $100, $1,000 and $10,000. Authorized $39,029,600 Outstanding $39,029,000 Security : The above bonds are not secured by a mortgage, but are a direct obhgation of the company. These debentures provide, so far as may be, that if this company shall hereafter create any mortgage on its now existing main line of railroad between Woodlawn, N. Y., and Springfield, Mass., or between New Haven, Conn., and Providence, R. I., such debentures shall be entitled to share in the security of such mortgage pro rata. These debentures also provide that the holders shall enjoy the right to subscribe to any issue of capital stock to the same extent as the stockholders. Convertibility: These bonds are convertible into the stock of the company after January 15, 1923, and not later than January 15, 1948, at the rate of one share of stock for each $100 of the principal amount of these bonds. These bonds sold in 1908 on a 4.10 to 5.10 basis 1909 3.75 4.25 1910 4.15 4.35 1911 4.15 4.50 1912 4.25 4.70 These bonds are considered Connecticut. legal investment for savings banks in Maine, New Hampshire and [ 547] THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD Convertible Debenture 332% Certificates Dated January 1, 1906 Maturing January 1, 1956 Interest payable January 1 and July 1 at New York and Boston. Coupon bonds of $100, $500 and $1,000. Exchangeable for registered certificates of $5,000. Authorized $30,000,000 Outstanding $10,416,300 Provisions of Of the total amount authorized, $10,416,300 are outstanding as above, and the balance, issue: $19,583,700, has been exchanged for capital stock of the company. Security: The above bonds are not secured by a mortgage, but are a direct obligation of the company. These debentures were issued to provide for the retirement of coupon notes amounting to $12,100,000, and to furnish further funds to bring the property up to the necessary standard of efficiency. Convertibility: These bonds are convertible into the stock of the company between January 1, 1911, and Jan- uary 1, 1916, at the rate of one share of $100 capital stock for each $150 (face value) of these certificates. Registrar: Second National Bank, New Haven. These bonds sold in 1908 on a 3.50 to 4.35 basis 1909 3.07 3.62 1910 3.37 3.65 1911 3.48 4.05 1912 3.75 4.20 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts and Connecticut. THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD 1. Non-Convertible Debenture 4s Dated February 1, 1904 Maturing February 1, 1914 Interest payable February 1 and August 1, at New York and Boston. Coupon bonds of $1,000. Registered lionds of $10,000. Non-interchangeable. Authorized $5,000,000 Outstanding $5,000,000 The above bonds were sold in 1909 on a 4.22 basis (bid) 1910 4.40 1911 4.35 1912 4.62 (bid) [ 548 ] 2. Non-Convertible Debenture 4s Dated March 1, 1897 Maturing March 1, 1947 Interest payable March 1 and September 1 at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. Authorized $5,000,000 Outstanding $5,000,000 The above bonds were sold in 1909 on a 4.27 basis (bid) 1910 4.25 1911 4.35 1912 4.55 (bid) 3. Non-Convertible Debenture 3l^s Dated March 1, 1901 Maturing March 1, 1947 Interest payable March 1 and September 1, at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable . Authorized $5,000,000 Outstanding $5,000,000 The above bonds were sold in 1909 on a 4.25 basis 1910 4.40 1911 4.40 1912 • 4.75 (bid) 4. Non-Convertible Debenture 3^2S Dated April 1, 1904 Maturing April 1, 1954 Interest payable April 1 and October 1, at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. Authorized $10,000,000 Outstanding $10,000,000 The above bonds were sold in 1909 on a 4.27 basis (bid) 1910 4.30 to 4.50 1911 4.35 4.55 1912 4.55 (asked) 5. Non-Convertible Debenture 4s Dated July 1, 1905 Maturing July 1, 1955 Interest payable January 1 and July 1 at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable . Authorized $15,000,000 Outstanding $15,000,000 The above bonds were sold in 1909 on a 4.15 basis 1910 4.15 to 4.35 1911 4.30 4.35 1912 4.40 4.55 [ 549 ] 6. Non-Convertible Debenture 4s Dated May 1, 1906 Maturing May 1, 1956 Interest payable May 1 and November 1 at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchan geable. Authorized $15,000,000 Outstanding $15,000,000 The above bonds were sold in 1909 on a 4.15 to 4.25 basis 1910 4.22 4.32 1911 4.27 4.40 1912 4.35 4.55 Security : These bonds are not secured by mortgage, but are direct obligations of The New York, New Haven & Hartford Railroad Company. Listed: New York Stock Exchange. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Con- necticut, with the exception of the Debenture 4s of 1956. They are legal for savings banks in Massachusetts. THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD One-Year 5% Coupon Notes Dated December 2, 1912 Maturing December 1, 1913 Interest payable June 1 and December 1 at New York. Coupon notes of $5,000 and multiples. Authorized $40,000,000 Outstanding $40,000,000 Security: These notes are a direct obligation of The New York, New Haven & Hartford Railroad Com- pany, but are not secured by a mortgage. These notes were issued to retire $30,000,000 one-year notes maturing January 15, 1913. They were offered by J. P. Morgan & Co. at 99j^ in December, 1912. [ 550 ] THE NEW YORK, NEW HAVEN & HARTFORD RAILROAD European Loan Debenture 4s Dated April 1, 1907 Maturing April 1, 1922 Interest payable April 1 and October 1 at Paris, London, Berlin, Hamburg and Amsterdam. Coupon bonds of 500 francs and £19.15.6 and multiples. Authorized $27,985,000 Outstanding $27,985,000 Security : These bonds are a direct obligation of The New York, New Haven & Hartford Railroad Com- pany, but are not secured by a mortgage. Listed: Boston Stock Exchange. THE CONSOLIDATED RAILWAY 1. Non-Convertible Debenture 4s, 3^8, and 3s Dated February 1, 1905 Maturing February 1, 1930 Interest payable February 1 and August 1 at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. Authorized $1,000,000 Outstanding $972,000 These debentures bear 3% interest until February 1, 1910, 3'-^% interest until February 1, 1915, and there- after 4% interest until maturity. 2. Non-Convertible Debenture 4s Dated July 1, 1904. Maturing July 1, 1954 Interest j)ayablc January 1 and July 1 at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. Authorized $5,000,000 Outstanding $4,225,000 $745,000 have been retired and cancelled. 3. Non-Convertible Debenture 4s Dated January 2, 1905 Maturing January 1, 1955 Interest payable January 1 and July 1 at New York and Boston. Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. Authorized $4,000,000 Outstanding $2,309,000 $1,691,000 have been retired and cancelled. [551 ] 4. Non-Convertible Debenture 4s Dated April 1, 1905 Maturing April 1, 1955 Interest payable April 1 and October 1 at New York and Boston. Authorized $3,500,000 Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. $!i, 159,000 have been retired and cancelled. Outstanding $1,340,000 5. Non-Convertible Debenture 4s Dated January 1, 1906 Maturing January 1, 1956 Interest payable January 1 and July 1 at New York and Boston. Authorized $10,000,000 Coupon bonds of $1,000. Registered bonds of $10,000. Non-interchangeable. $7,989,000 have been retired and cancelled. Outstanding $2,011,000 Security: The above bonds are not secured by mortgage, but are direct obligations of The New York, New Haven & Hartford Railroad Company. The Consolidated Railway Company agrees that if it shall hereafter mortgage any of its property and franchises owned on the date of the issue of these debentures, except to renew existing mortgages, these debentures shall partici- pate in the security of such a mortgage pro rata. Listed : New York Exchange. The Consolidated Railway Company was organized under the laws of the State of Connecticut August 31, 1901, as the Thompson Tramway Company. Its name was changed January 29, 1902, to the Worcester & Connecticut Eastern Railway Company. Its present title was incorporated May 18, 1904. On May 31, 1907, it was merged into The New York, New Haven & Hartford Railroad Company. At that tune the latter assumed all the funded indebtedness of The Consolidated Railway Company, including the above issues. OLD COLONY RAILROAD 1. Plain 4s Dated January 1, Authorized $4,000,000 Interest payable January 1 and July 1 at Boston. Registered bonds of $1,000. Maturing January 1, 1938 Outstanding $4,000,000 552 ] 2. Plain 4s Dated February 1, 1894 Maturing February 1, 1924 Interest payable February 1 and August 1 at Boston. Authorized $3,000,000 Coupon bonds of $1,000 and $5,000, fully registerable. Registered bonds of $1,000 and $5,000. Outstanding $3,000,000 3. Plain 4s Dated December 1, 1895 Maturing December 1, 1925 Interest payable June 1 and December 1 at Boston. Outstanding $5,598,000 Dated July 1, 1902 Authorized $1,000,000 Coupon bonds of $1,000 and $5,000. Registered bonds of $1,000 and $5,000. 4. Plain 3Ks Interest jiayable January 1 and July 1 at Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Maturing July 1, 1932 Outstanding $1,000,000 Security: The above bonds are a direct obHgation of the Old (,'olony Railroad Company, but are not secured by mortgage. These bonds have been ASSUMED by The New York, New Haven & Hartford Railroad Company. Listed: Boston Stock Exchange. The Old Colony Railroad Company was incorporated in Marcli, 1844, under the laws of Massa- chusetts. The jjresent company, a consolidation of various small lines acquired at different periods, was leased February 15, 1893, for 99 years to The New York, New Haven & Hartford Railroad Com- pany, at an annual rental of 7% on the company's cajjital stock and the assumption of all the funded obligations of the company. These bonds are considered a legal investment for savings banks in New England. [ 553 ] BOSTON & PROVIDENCE RAILROAD Plain 4s Dated July 1, 1888 Maturing July 1, 1918 Interest payable January 1 and July 1 at Boston. Coupon bonds of $1,000, registerable as to principal. Outstanding $2,170,000 Security: The above bonds are a direct obligation of the Boston & Providence Railroad Corporation, but are not secured by a mortgage. These bonds have been ASSUMED by The New York, New Ila^en & Hartford Railroad Company. Listed: Boston Stock Exchange. The Boston & Providence Railroad Corporation was incorporated July 22, 1831, under the laws of Massachusetts. It was completed and opened for traffic in August, 1835. From April 1, 1888, for 99 years it was leased to the Old Colony Railroad Company at an annual rental equivalent to 10% on its capital stock, interest on its bonds, and organization expenses. This lease was assumed by The New York, New Haven & Hartford Railroad when it leased the Old Colony Railroad in 1893. These bonds were quoted December, 1912, on a 4.37 basis (bid). These bonds are considered a legal investment for savings banks in New Hamijshire, Massachusetts, Connecticut and Rhode Island. PROVIDENCE & WORCESTER RAILROAD First Mortgage 4s Dated June 1, 1897 Maturing October 1, 1947 Interest payable April 1 and October 1 at the Rhode Island Hospital Trust Company, Providence. Coupon bonds of $1,000, registerable as to principal. Authorized $1,500,000 Outstanding $1,500,000 Security : The above bonds are secured by a first mortgage on the entire property of the Providence & Worcester Railroad, including railroad, buildings, equipment, franchises, income and profits. These bonds have been GUARANTEED as to INTEREST by The New York, New Haven & Hartford Railroad Company under terms of its lease. Trustee: Rhode Island Hospital Trust Company, Providence. The Providence & Worcester Railroad Company was incorporated in May, 1844, under the laws of Rhode Island and Massachusetts. It was leased to The New York, New Haven & Hartford Rail- [ 554 ] road Company for 99 years from July 1, 1892, at an annual rental of 10% on its stock, interest on its funded indebtedness and $6,000 for organization expenses. Of its $3,500,000 capital stock. The New York, New Haven & Hartford Railroad Company owns $749,500. These bonds were quoted December, 1912, on a 4.15 basis (bid). These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Massachu- setts, Connecticut and Rhode Island. NORWICH & WORCESTER RAILROAD Debenture 4s Dated March 1, 1897 Maturing March 1, 1927 Interest payable March 1 and September 1 at Boston. Coupon bonds of $1,000. Registered bonds of $1,000. Authorized $2,000,000 Outstanding $1,200,000 The unissued balance of these bonds has been reserved for improvements and betterments with restrictions. Security : The above bonds are a direct obligation of the Norwich & Worcester Railroad Company, but are not secured by a mortgage. These bonds are GUARANTEED as to INTEREST by The New York, New Haven & Hart- ford Railroad Company imder the terms of its lease. The Norwich & Worcester Railroad Company was incorporated June 22, 1836, under the laws of Massachusetts and Connecticut as the consolidation of the Worcester & Norwich Railroad and the Boston, Norwich & New London Railroad Companies. It was leased to The New England Rail- road Company from February 9, 1869, for 99 years, at an annual rental equivalent to 8% on the company's capital stock, and interest on its bonds. This lease was assumed by The New York, New Haven & Hartford Railroad Company at the time of the merging of The New England Railroad Com- pany into its system. These bonds are considered a legal investment for savings banks in Massachusetts, Connecticut and Rhode Island. [ 555 CONNECTICUT RAILWAY & LIGHTING COMPANY First & Refunding Gold 4Hs Dated January 1, 1901 Maturing January 1, 1951 Interest payable January 1 and July 1 at the Equitable Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $15,000,000 Outstanding $12,551,000 Security: The above bonds are secured by a mortgage on all the franchises, real estate, plants, and all other property of the company now owned or hereafter acquired, and are subject only to $209,000 Connecticut Light & Power 5s of 1939, $706,000 Bridgeport Traction Company 5s of 1923, and $59,700 Derby Street Railway 5s of 1914. The company covenants to deliver to the trustee hereunder all shares of stock purchased with the proceeds of these bonds, and at the present time has deposited with the trustee $4,380,146 of such securities. Guarantee: The above bonds are "stamped" with a guarantee as to interest by the United Gas Improve- ment Company. These "stamped bonds" are redeemable at 105 and interest. Sinking fund : The United Gas Improvement Company agrees to pay the trustee on the first day of July, 1905, and on each July 1 thereafter until and including July 1, 1950, a sum equal to one-half of 1%, and on December 31, 1950, a sum equal to one-fourth of 1% of the bonds outstanding whether or not in the sinking fund, such payments to be held by the trustee for the benefit of the "stamped" guaranteed bonds. Property: The railway properties of the company, all the lines of which are operated by electricity, are in three divisions: the New Britain Division, connecting New Britain, Newington, Plainville, Southington, and Berlin; the Waterbury Division, connecting Waterbury, Southington, Mt. Carmel, and Seymour; and the Bridgeport Division, connecting Bridgeport, Seymour, Wood- mont, Darien, and Stamford. The company owns one complete gas works at Norwalk, a holder and distribution system in Naugatuck and Greenwich, and two manufacturing plants completely equipped with a total capacity of 3,240,000 cubic feet per day. The towns and municipalities served by this department of the company are East Portchester, Greenwich, Norwalk, New Canaan, Waterbury, Watertown, Naugatuck, Cheshire, New Britain, South- ington, Plainville, and Berlin. Trustee: Equitable Trust Company, New York. The Connecticut Railway & Lighting Company was chartered in 1895 as the Gas Supply Com- pany, its charter later being amended, changing its name to the Connecticut Lighting & Power Com- pany. On January 10, 1901, its present title was adopted. The company leased all its property to The Consolidated Railway Company on December 19, 1906, for 999 years. The Consolidated Rail- way during the following year merged into The New York, New Haven & Hartford Railroad Company. These bonds sold in 1909 on a 4.35 basis (bid) 1910 4.375 1911 4.40 December, 1912 4.55 (bid) [ 556 ] CONNECTICUT LIGHTING & POWER COMPANY First Mortgage 5 s Dated January 1, 1899 Maturing January 1, 1939 Interest payable January 1 and July 1 at Bridgeport. Coupon bonds of $1,000. Authorized $1,000,000 Outstanding $209,000 For liistory, see page 556. BRIDGEPORT TRACTION COMPANY First Mortgage 5s Dated July 1, 1893 Maturing July 1, 1923 Interest payable January 1 and July 1 at Redmond & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Outstanding $706,000 Security: The above bonds are secured by a first mortgage on 53 miles of track in Bridgeport and con- necting lines. Trustee: Fidelity Trust Company, Newark, N. J. The two issues above are the obligations of the Connecticut Railway & Lighting Company, which was incorporated as the Gas Supply Company, July 2, 1895, in Connecticut. The company assumed its present title January 10, 1901. It was leased for 999 years from December 19, 1906, to The Consolidated Railway Company, which was absorbed by The New York, New Haven & Hartford Railroad Company May '.U, 1907. [557] Dated January 1, 1911 Authorized $25,000,000 CENTRAL NEW ENGLAND RAILWAY First Gold 4s Interest payable January 1 and July 1 at New York. Coupon bonds of $1,000, registerable as to principal. Exchangeable for registered bonds of $10,000. Maturing January 1, 1961 Outstanding $11,957,000 Per mile . . 87,058 Provisions of Of the total amount authorized $11,957,000 are outstanding as above, $287,000 have been issue: reserved to retire Dutchess County First 4i/^s, and the balance, $12,856,000, has been reserved for extensions, improvements and additions up to 25% of cost. Security : The above bonds are a direct obligation of the company, and are secured by a first mortgage on 137 miles of road including the Poughkeepsie Bridge across the Hudson, wliich alone cost upwards of $7,000,000. The bonds are fuilher secured by a first mortgage on all the property which may be secured, constructed, and improved with the proceeds of these bonds. The above bonds are GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company by endorsement. Redemption: They are redeemable at 105 and interest after January 1, 1921, upon six weeks' notice. Trustee: Farmers' Loan & Trust Company, New York. The Central New England Railway Company was chartered January 12, 1899, as the successor to the Philadelphia, Reading and New England Railroad Company. It is controlled by The New York, New Haven & Hartford Railroad Company through ownership of substantially all its capital stock, but is operated independently. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. NEW YORK, WESTCHESTER & BOSTON RAILWAY First Gold 4Hs Dated July 1, 1911 Maturing July 1, 1946 Interest payable January 1 and July 1 at New York and London. Coupon bonds of $1,000, £100 and £200, registerable as to principal. Registered bonds of $1,000 and multiples. Coupon and registered bonds interchangeable. Authorized $60,000,000 Outstandmg $19,200,000 Provisions of Of the total amount authorized $19,200,000 are outstanding as above, and the balance, issue: $40,800,000, has been reserved for additional construction, betterments and improvements to the mortgaged property. [ 558 ] Security: The above bonds are a direct obligation of the company and are secured by a first mortgage on its entire property, which reijresented June 30, 1912, an investment by The New York, New Haven & Hartford Railroad Company of about $30,000,000. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company by endorsement. Redemption: They are redeemable at 110 and interest on any interest date in amoimts not less than $5,000,000. Property: The company's line extends from the Harlem River, at about Willis Avenue, New York, through the Bronx and Westchester County to Mt. Vernon, where the line di\erges, one line extending to New Rochelle and White Plains, and the other extending to the east, to the Con- necticut State Line at Port Chester. Of the total miles of track, 74.54, 50.57 miles are owned in fee, the company having perpetual rights to operate over the additional 24 miles. The New York, Westchester & Boston Railway Company was formed January 19, 1910, under the railroad laws of New York, and under a special act of the legislature as a consolidation of an older company by the same name and the New York & Port Chester Railroad Company. Of the $5,000,000 stock of the company. The New York, New Haven & Hartford Railroad Company owns all but 204 shares. These bonds are considered a legal in\estment for savings banks in Maine, New Hampshire and Rhode Island. PROVIDENCE SECURITIES COMPANY Debenture Gold 4s Dated May 1, 1907 Maturing May 1, 1957 Interest payable May 1 and November 1 at New York and New Haven. Coupon bonds of $1,000, registerable as to principal. Registered bonds of $10,000. Authorized $19,011,000 Outstanding $19,180,000 Security ; The above bonds are direct obligations of the company, but are not secured by a mortgage. They are GUARANTEED as to PRINCIPAL and INTEREST by The New York, New Haven & Hartford Railroad Company by endorsement. Redemption: The above bonds are redeemable at 105 and interest on any interest date beginning May 1, 1917, upon eight weeks' notice. The Providence Securities Company was incorporated in Connecticut in 1883 under the name of the New England Loan & Trust Company, its name being changed to that of the present title on January 11, 1907. It was created in the interests of The New York, New Haven & Hartford Rail- road Company to acquire all the stocks and bonds of the Rhode Island Securities Company, which controls, through the Rhode Island Company, a system of 279 miles of street railways operated [ 559 ] in the State of Rhode Island under perpetual franchises. The entire capital stock of the Providence Securities Company is owned by The New York, New Haven & Hartford Railroad Company. These bonds sold iu 1907 on a 4.50 to 4.80 basis 1909 4.85 (bid) 1910 4.50 to 4.875 1911 4.65 4.85 December, 1912 5.05 (bid) BOSTON TERMINAL COMPANY First Gold 3 Ms Dated February 1, 1897 Maturing February 1, 1947 Interest payable February 1 and August 1 on coupon bonds, at the State National Bank, Boston. Interest payable February 1, May 1, August 1 and November 1, on the registered bonds. Coupon bonds of $1,000, exchangeable for registered bonds. Registered bonds of $1,000 and multiples. Authorized $14,500,000 Outstanding $14,500,000 Security: The above bonds are a direct obligation of the company and are secured by a first mortgage on the South Terminal Station, Boston, and a large tract of railroad yards used by The New York, New Haven & Hartford Railroad, The New England Railroad, Providence & Boston Railroad, Boston & Albany Railroad, and the Old Colony Railroad, which companies pay as rental in monthly installments a sum sufficient to cover expenses, interest on the above bonds, and 4% on the stock. The several companies are jointly liable in case of a forfeit. Trustee: Old Colony Trust Company, Boston. The Boston Terminal Company was incorporated in Massachusetts in June, 1896, to construct the above-mentioned passenger station for all trains entering Boston on the south. The capital stock of the company ($500,000) is owned jointly by the five companies which use the station. They pay as rental a sum sufficient to cover interest on the company's bonds, 4% on its capital stock, and all operating expenses. These bonds sold in 1908 on a 3.42 to 3.50 basis 1909 3.25 3.30 1910 3.70 1911 3.50 3.57 These bonds are considered a legal investment for savings banks in Massachusetts and Rhode Island. [ 560 ] NARRAGANSETT PIER RAILROAD First Mortgage 4s Dated August 1, 1896 Maturing August 1, 1916 Interest payable February 1 and August 1 at Rhode Island Hospital Trust Company, Providence. Coupon bonds of $1,000, registerable as to principal. Authorized $100,000 Outstanding $70,000 Security: The above bonds are secured by a first mortgage on the entire property of the company. These bonds have been GUARANTEED as to INTEREST by the Rhode Island Company under the terms of its lease. Trustee: Rhode Island Hospital Trust Company, Providence. The Narragansett Pier Railroad Company was chartered in the May Session of the General Assembly of Rhode Island in 1868. It was incorporated April 12, 1875, under the laws of Rhode Island, and the road was opened for traffic July 17, 1876. The property of this company was leased on Jime 30, 1911, for a term of 99 years to the Rhode Island Company at a rental equal to the inter- est on the company's funded debt and 4% annually on its outstanding stock. The Rhode Island Company, chartered in April, 1902, for the purpose of uniting under a single management certain public service corporations of Providence and vicinity, is controlled by The New York, New Haven & Hartford Railroad Company through the ownership of its entire capital stock. These bonds are considered a legal investment for savings banks in Maine and Massachusetts. [ 561 NORTHERN PACIFIC RAILWAY COMPANY NORTHERN PACIFIC RAILWAY COMPANY HISTORY The original charter of the Northern Pacific Railway Company was granted by Congress in 1864, and its construction was begun six years later under the management of Jay Cooke and asso- ciates. The section from Duluth to Bismark, on the IMissouri River, was completed in 1873, and in that same year Mr. Cooke's banking house failed, precipitating the panic of 1873. The Northern Pacific became involved in its failure and was sold under foreclosure in 1875. Following the work of Mr. Cooke came that of Henry Villard, who resolutely pushed the work of construction; and, on the 9th of September in 1883, the entire main line from Ashland, Wiscon- sin, to Portland, Oregon, was thrown open to traffic. As the result of the completion of this line, the new territory thrown open by it developed rapidly. For a few years the growth of traffic, and a corresponding increase in earnmgs, were beyond even the expectations of its managers. In the early '90s, however, both gross and net earnings declined to such an extent that the road was unable to meet its steadily increasing fixed charges, and receivers were appointed for it upon default of certain interest payments on August 15, 1893, and special receivers were appointed for the leased lines and branches in Montana and other states which comprised the Northern Pacific System. Under the date of March 16, 1896, a plan of reorganization was promulgated, and upon the assent of practically all the security holders in interest, it was declared operative on April 24 of the same year. The new company was created by the Morgan interests, including the Deutsche Bank of Berlin, and Drexel & Company. Chicago, as an Eastern terminus, was abandoned, entrance to that city having formerly been made over the lines of the Wisconsin Central Railroad, which had been leased for 99 years from April 1, 1890. This lease was cancelled September 27, 1893, owing to a default of the rental charge. It was planned in the reorganization to unite the main line, branches and terminal properties under the direct ownership of a single company instead of several companies as before; to reduce the fixed charges to an amount safely within the average earning power of the road and to provide ample working capital for the future development of the property. The latter was furnished by the Morgan interests and the Deutsche Bank. In 1900 and 1901 several important acquisitions were made to the company's property, both by construction and consolidation. In July, 1900, the property, lands and assets of the St. Paul & Duluth Railroad Company were taken over by the Northern Pacific, and all its funded indebted- ness was thereupon assumed. The property of the Seattle, Lake Shore & Eastern Railway Com- pany, which had formerly been owned by the Northern Pacific Railroad Company, and abandoned in the reorganization, was again acquired, together with the property of the Seattle & International Railway Company. The Spokane & Seattle Railway, an important link with the Great Northern Railway, was absorbed by the Northern Pacific in 1900. By far the most important acquisition was that of the Chicago, Burlmgton & Qiiincy System, made by the Great Northern Railway and the Northern Pacific Railway jointly. Almost the entire capital stock of the Chicago, Burlington & Quincy Railroad was taken over by the two, and in ex- change therefor bonds were issued secured by the Burlington stock. The value of this holding to the Northern Pacific is very large, as the assets of the Burlington are growing more and more valuable each year. On June 1, 1901, the proprietary railroads of this company in the Province of Manitoba, namely, the Northern Pacific & Manitoba Railway, the Portage & Northwestern Railway, were transferred [ 565 ] U) tlie government of Manitoba under a lease for 999 years, the rental being $210,000 the first ten years, $225,000 for the second ten years, $270,000 for the third ten years, and $300,000 each year thereafter, the lessee having the option of purchasing the property at any time at $7,000,000. In August, 1905, the Portland & Seattle Railway Company was incorporated, all the capital stock of which was owned jointly by the Northern Pacific Railway Company and the Great Northern Railway Company. The Portland & Seattle Railway Company began immediately to construct a hne from Portland, Oregon, to Spokane, Washington, connecting there with the Northern Pacific and Great Northern Railways, and also completing an extension to Texas Ferry, Washington, which connected with the lines of the Northern Pacific and the Union Pacific Railways. The road was planned with low curvatures, there being few curves as high as three degrees, and with a maximum grade eastbound of but eleven feet to the mile, permitting the handling of large amounts of busi- ness, both freight and passenger. On February 1, 1908, the name of the Portland & Seattle Rail- way Company was changed to that of the Spokane, Portland & Seattle Railway Company. In 1912 the latter operated 556 miles of road, including 122 miles of road of the Astoria & Columbia Railroad Company merged in March, 1911. In payment for various advances since 1905, the Northern Pacific received during 1911 securities amoimting to nearly $30,000,000, all of which were held in the treasury of the parent company in July, 1912. One of the most valuable assets of the Northern Pacific Railway Company is its lands, of which on June 30, 1912, 9,962,896 acres remained unsold. These lands are situated in Minnesota, North Dakota, Montana, Idaho, Washington, Oregon and Wyoming. During the fiscal year of 1912, 177,525 acres were sold, upon which $1,524,038 was realized. The land contracts on hand to be filled June 30, 1912, aggregated $4,385,275. During the decade ending 1912 nearly 5,650,000 acres have been sold to bring over $21,000,000. PROPERTY At the close of the fiscal year ending June 30, 1912, the mileage of the Northern Pacific Railway Company and controlled lines, comprising the Northern Pacific Railway System, was as follows: Mileage owned 6,297.15 Mileage controlled 290.01 Mileage leased 144.31 Mileage used jointly 10.59 Total 6,742.06 Beside the above mileage, the system had 623.86 miles of extra main track, of which 524.99 miles were owned. The average miles operated by the Northern Pacific Railway Company during 1912 were 6,025.09 miles, and this figure is used as the basis of the statistics in this report. The Northern Pacific System, like that of the Great Northern, extends from Duluth and Min- neapolis on the east, westerly across north central Minnesota, through central North Dakota and southern Montana, into Washington, connecting the growing cities of Portland, Olympia, Tacoma and Seattle. The two systems, until the "Puget Sound Line" was built, furnished practically the entire transportation service of the great northwestern part of the United States. The population of the States which the Northern Pacific crosses was, in 1890, 2,050,000; and in 1910, 4,496,000. [ 566 ] CAPITALIZATION Based on the aunual report of the Nortliern Pacific Railway Company for the fiscal year ending Jnne 30, 1912, its approximate capitalization was as follows: Capital stock $248,000,000 Funded debt 191,365,500 Nominal capital $439,365,500 Rentals capitalized @ 5% 10,526,000 Gross capitalization $449,891,500 Securities o^^^^ed 46,619,949 Net capitalization $403,271,551 Net capital per mile operated $66,933 Average miles operated 6,025.09 Net income to net capital 8.2% Fixed charges to net income 35-7% Margin of safety 64.3% The above table does not include in funded debt $107,613,500, the Northern Pacific's half of the 4% Collateral Bonds issued for the purchase of the Burlington, but does include the funded debt of the St. Paul & Duluth Railroad, whose obligations were assumed by the Northern Pacific in 1900. The company paid out for rentals in 1912 over $526,000, which, capitalized at 5%, covers approx- imately the capitalization of the leased roads. Among the securities owned are included the stocks and bonds of proprietary, affiliated and controlled com])anies unpledged, amounting to nearly $47,000,000. These are deducted in the table above to arrive at the net capitalization. The net capitalization per mile of road operated was $66,933, as compared with $41,874 for the Great Northern and $57,892 for the Atchison, Toj^eka & Santa Fe. The average net capital per mile of the three, together with the average ratio of total net income to average net capital for the decade ending June 30, 1912, are given as follows: Ten years Net capitalization Net income to per mile net capital Northern Pacific $68,210 8.4% Great Northern 36,055 11.2 Atchison 56,020 6.1 It will be seen that the Northern Pacific carried an average net capitalization for the decade equal to almost twice that of the Great Northern, and yet earned over 8% upon it as compared with 11.2% of the other. As far as earning power is concerned, it would not seem that the Northern Pacific was over-capitalized. The following table is presented, giving the increase in the company's capitalization and gross earnings since 1900: Year Capital stock Funded debt Total capital Gross earnings Common Preferred 1900 . . $80,000,000 $75,000,000 $171,346,590 $326,346,590 $30,021,318 1912 . . 248,000,000 191,365,500 439,365,500 63,423,946 Increase 113,018,910 33,402,628 Per cent increase 34% 111% [567 J The stock increases are accounted for as follows. In January, 1902, the preferred stock was retired for an equal amount of common stock. At the stockliolders' meeting held on the 7th day of January, 1907, it was resolved "that the capital stock of this corporation be, and the same hereby is, increased by $95,000,000." This increase was made in order to reimburse the treasury of the company for expenditures already made and to provide for necessary construction, extensions and acquisitions in the future. The company's funded debt during the past eleven years has risen but $20,000,000. With a 34% increase in the total capital, it will be seen that gross earnings increased 111%, a truly excellent showing. Of the capitalization, nearly 60% is made up of stock, keeping the fixed charges at a low level. These consumed in 1912 but 35.7% of the total net income, leaving a margin of safety for the interest on the underlying securities of 64.3%. CHARACTER OF TRAFFIC The Northern Pacific Railway is one of those which does not give an itemized account of its traffic. The ratio of freight to all traffic in 1912 was 69%. This figure has tended to decline since 1905, when the ratio was as high as 73%. Based on the traffic statistics of the company the follow- ing table has been prepared, giving the freight density, train load tons, freight earnings and the aver- age rate per mile per ton since and including 1907: Year Freight Train Freight Average rate density load earnings per mile tons per ton 1907 1,011,103 407 48,395,878 $.0087 1908 915,388 430 46,423,836 .0090 1909 927,613 435 47,073,305 .0089 1910 939,997 429 48,758,736 .0090 1911 806,834 461 43,332,918 .0090 1912 838,370 511 43,793,522 .0087 There appears a discomforting decline in the number of tons carried one mile per mile of road operated, also a sharp decline in freight earnings during the period, all of which suggests the growing importance of the "Puget Sound Line" as a competitor. Freight earnings decreased over $5,200,000 in 1911; $2,000,000 of this decrease was due to less gTain handled, and $1,600,000 to the fact that nearly 10,000 less cars of lumber and shingles were moved, and $700,000 was due to a decrease in earnings from long haul freight moving from the Mississippi River and points east, to Butte, Spo- kane, Tacoma and Portland, caused by less construction and expansion of general business. Only a slight improvement is evident in the 1912 figures. The number of tons of revenue freight per train load, however, has increased by 50 tons, or 10.5%, showing greater efficiency of operation. With an equal operating efficiency during the current year, 1912-1913, together with a bumper crop which is promised, the Northern Pacific should recover very materially from the decline in freight earnings during 1911 and 1912. Fully one-quarter of the gross business of the Northern Pacific is represented by its passenger traffic. In the past it has been the evident intent of its managers to make the Northern Pacific a tourist route, owing to the beauty of the country through which it passes, and espe- cially to the fact that the grades are in many places somewhat too heavy for profitable freight transportation. Not that a large vohnne of freight cannot be carried at a profit over the Northern Pacific lines, but that the Great Northern, with lower grades, can handle through freight more profitably. Following are a few of the more salient passenger statistics of the Northern Pacific for the years 1907 to 1912 inclusive: [ 568 ] Passenger Number of Passenger Average rate density passengers earnings per passenger per tram per mile 132,759 75 $16,924,187 $.0226 141,018 80 18,133,238 .0228 135,327 74 17,330,608 .0226 169,431 74 21,333,312 .0218 127,609 63 17,278,812 .0228 107,802 54 15,343,752 .0236 1907 1908 1909 1910 1911 1912 During 1911 it will be noted that passenger earnings declined over $4,000,000. The absence of events like tlie Alaska- Yukon-Pacific Exposition, which caused the high earning figures of 1910, or the opening of the Flathead, Coeur d'Alene and Spokane Indian Reservations, coupled with lessened business activity, all contriliuted to this large decrease in earnings. Passenger density — the number of passengers carried one mile per mile of road operated — was highest in 1910 owing to the Exposition, and even with a much lower rate earnings increased over $4,000,000 over the figures of 1909. Since 1910 both passenger density and passengers per train carried have steadily declined, the former from 169,431 to 107,802, and the latter from 74 to 54. This decline has been attributed in part to two causes, one the successful competition of the Chicago, Milwaukee & St. Paul for through passenger business, and the other, the growing use of automobiles in the territory served by the company. To meet the competition of the St. Paul, the Northern Pacific and the Chicago & Northwestern Railway began the operation of through trains from Chicago to the Pacific Coast in December, 1911. EARNINGS During the past six years the Northern Pacific earned, both gross and net, the following amounts: Year Average miles Gross Per Net Per operated earnings mile earnings mile 1907 5,444 $68,534,832 $12,590 $30,870,515 $5,671 1908 5,633 68,235,484 12,112 28,370,450 5,036 1909 5,671 68,460,747 12,071 30,440,742 5,368 1910 5,765 74,525,826 12,927 28,538,420 4,950 1911 5,950 64,912,831 10,908 25,183,071 4,231 1912 6,025 63,423,946 10,526 25,265,430 4,193 Gross earnings, in 1907 the highest ever reported, were equalled during the years 1908 and 1909 in spite of the fact that throughout the Northwest generally business conditions were somewhat depressed. It will be noted, however, that gross earnings increased nearly $6,000,000 in 1910, due to greater business activity in the territory served by the company's lines. As has been shown above, the Alaska Exposition, held in Seattle from June 1 to October 16, 1909, induced a large passenger movement, and the opening of Indian Reservations within reach of the company's lines, and a very general demand for land all through the country resulted in a large volume of travel. Taking advantage of the enormous volume of gross earnings in 1910, the company increased very materially its output for maintenance. Diu-ing that year $3,000,000 more was spent for main- tenance of way than in 1909, the increase being 38%. $1,150,000 more was charged for upkeep of equipment than in the previous year, or a gain of 15%, and $3,750,000 additional was required to conduct transportation due prhnarily to an increase of passenger train mileage of 31%. In the fiscal year ending June 30, 1911, the Northern Pacific was confronted with a loss of nearly [ 569 ] $10,000,000 in gross revenue, but in spite of this, the surplus available for dividends was only about $1,800,000 below 1910, the percentage earned bemg equal to 8.2% compared with 8.9% in 1910. The important change in the year's results was the curtailment of operating expenses, so that net earnings were but slightly over $3,000,000 below those of 1910. Considering the fact that the Puget Sound Extension of the Chicago, Milwaukee & St. Paul took some of the traffic which niight ordinarily have been the Northern Pacific's, and the fact that the Exhibition traffic of two years ago was counted in the 1910 results, together with the general lassitude which prevailed last year throughout the Northwest, the returns of 1911 do not seem at all as bad as they at first appear to be. During 1912 earnings declined still further, owing to the quietness of business in the territory served by the company's lines. The years 1911 and 1912 were trying ones, but the first six months of the current year of 1913 has shown material improvements both in earnings and traflSc. MAINTENANCE To offset the decline in gross earnings of 1911, maintenance figures were scaled down substan- tially. Maintenance of way charges decreased $2,777,500, or 21%, and maintenance of equipment charges were reduced $1,081,000, or 12%. The ability to reduce maintenance expenses reflects the excellent condition of the company's rolling stock and road bed, and was only possible because of the liberal outlays made in 1910. Following are the amounts which have been spent for maintenance of way and equipment, also figured on a per mile basis, for the years 1907 to 1912 inclusive: Year Maintenance Total Per Way Equipment maintenance mile 1907 $9,145,546 $5,542,208 $14,687,754 $2,697 1908 8,984,355 8,436,766 17,421,121 3,091 1909 7,847,050 7,845,689 15,692,739 2,766 1910 10,842,955 8,992,137 19,835,092 3,439 1911 8,065,462 7,911,231 15,976,693 2,684 1912 7,861,490 7,207,716 15,069,206 2,500 It is interesting to compare the average traiEc density, amounts spent per mile of road, and the per cent of total maintenance to gross of the Northern Pacific, with the Great Northern and the Atchison, Topeka & Santa Fe. The following table shows the average in each case for six years ending June 30, 1912: TrafiSc density Northern Pacific 1,042,210 Great Northern 875,925 Atchison, Topeka & Santa Fe .... 800,140 ADDITIONS AND BETTERMENTS itenanco Per cent of rmile maintenance to gross !,863 24.1 5,467 28.6 ;,043 30.1 Prior to 1907 large amounts annually were expended from surplus earnings for additions and betterments and for new equipment. During the fiscal year of 1908 $2,784,000 were appropriated for the Insurance Fund, which had a credit of $5,542,517 on June 30, 1912. Since 1908 no special a])proprialion has been made from earnings for this purpose. [ 570 ] The following amounts lia\'e been charged to the Capital Account of the Northern Pacific Railway and spent for additions and betterments since 1907: Year Amount 1907 $40,108,180 1908 24,302,672 1909 14,894,753 1910 14,307,262 1911 7,998,105 1912 7,090,271 For six years $108,701,243 Average for one year 18,116,874 Beside the above amount the following advances have been made to sundry companies during the past five years: Year Amount 1907 $19,641,440 1908 10,922,158 1909 7,046,395 1910 14,340,357 1911 4,221,167 1912 1,135,605 For six years $57,307,122 Average for one year 9,551,187 From the above figures it will be seen that over $165,000,000 has been poured into the Northern Pacific System during the past six years. Of this amount the Spokane, Seattle & Portland Railway settled for advances made to it by the Northern Pacific by giving the latter its securities, the total value of which was $29,818,900. This settlement was made effective during 1911. For "Railway Development in Oregon" $5,000,000 was credited on "Advances" accoimt in 1912, leaving a bal- ance outstanding on the balance sheet of the company, June 30, 1912, of $24,039,362. DIVIDENDS In the early days of the Northern Pacific's history dividends were somewhat erratic and spare. Since the reorganization after the foreclosure of 1893 dividends were paid regularly upon the pre- ferred stock until it was cancelled, and dividends have been paid regularly on the common stock since 1899. Following is the dividend record of the Northern Pacific since 1890: Year Rate on Year Rate on Preferred Preferred Common 1890-1 4% 1899 ....... 4% 2% 1892 2 1900-1 4 4 1893-7 1902 1* 54 1898 5 1903-12 7 Final dividend [ .071 ] During the ])ast six years the Northern Pacific has earned over and above its dividend require- ments the following amounts: Year Amount Year Amount 1907 $6,697,176* 1910 $4,936,259 1908 6,258,117t 1911 3,082,266 1909 7,534,350 1912 2,303,815 On the general balance sheet of the Northern Pacific Railway Company for the year ending June 30, 1912, the Profit and Loss Account, not including Appropriated Surpluses of $5,542,517, stood at $80,260,438, an amount equal to 32% of the company's capital stock outstanding. STATISTICS Following are the capitalization, earnings and traffic statistics of the Northern Pacific Railway based on miles average operated for the year 1900 and for the years 1905 to 1912 inclusive. The Northern Pacific's share of the Great Northern-Northern Pacific-Chicago, Burling- ton & Quincy Collateral Trust Joint 4s are not included in the "Funded debt," hence the Chicago, Burlington & Quincy Stock, as collateral, is not included in "Securities owned." * After deducting $.5,926,753 for depreciation of equipment. t After deducting $2,784,9j0 for Insurance Fund. [ 572 ] NORTHERN PACIFIC RAILWAY Fiscal Capital Funded Rentals Gross Owned by Net Average Extra year stock debt @ 5% capital company $2,828 capital miles operated 4,715 main track 1900 $32,874 $36,341 $478 $69,693 $66,865 63 1905 29,162 34,896 603 64,661 301 64,360 5,315 115 1906 28,698 34,502 594 63,794 277 63,517 5.401 124 1907 31,175 34,295 589 66,059 258 65,801 5,444 248 1908 38,679 33,772 1,074 73,525 240 73,285 5,633 330 1909 43,731 33,757 1,188 78,676 227 78,449 5,671 470 1910 43,018 33,122 1,769 77,909 1,467 76,442 5,765 504 1911 41,680 31,987 1,886 75,553 8,358 67,195 5,950 574 1912 41,162 31,762 1,746 74,670 7,737 66,933 6,025 624 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus avail- year operating and general operating income net charges able for revenue Way Equipment e.xpense revenue income dividends 1900 $6,368 $1,033 $473 $1,547 $3,314 $145 $3,459 $1,450 $2,009 1905 9,543 1,382 950 2,712 4,499 361 4,860 1,639 3,221 190G 11,335 1,387 1,100 3,270 5,578 318 5,896 1,732 4,164 1907 12,590 1, 579 1,018 4,222 5,671 429 6,100 1,788 4,312 1908 12,112 1, 594 1,497 3,985 5,036 823 5,859 1.777 4,082 1909 12,071 1, 383 1,383 3,937 5,368 727 6,095 2,279 3,816 1910 12,927 1,880 1,559 4,538 4,950 791 5.740 1,875 3,865 1911 10,908 1,355 1,329 3,993 4,231 971 5,202 1,769 3,433 1912 10,526 1,305 1,195 3,833 4,193 887 5,080 1,816 3,264 Fiscal Divi- Other Surplus Operating Total Conducting Fixed G ross Net Per cent year dends charges expenses mainte- transpor- charges earnings income earned on to to gross nance to tation to to gross to gross to net capital ncome earnings gross gross earnings capital capital stock $1,781 $636 $1,145 earnings earnings 5.2% 1900 47.99% 23.8% 24.2% 22.7% 9.1% 6.1% 1905 2,041 564 616 52.80 24.4 28.4 17.1 14.7 7.5 11.0 1906 2,005 1,126 1,033 50.80 22.0 28.8 15.2 17.7 9.3 14.5 1907 1,993 1,088 1,231 55.00 21.5 33.5 14.2 19.0 9.2 13.8 1908 2,477 494 1,111 57.90 25.0 32.9 14.6 16.4 8.0 10.5 1909 2,488 1,328 55.54 22.9 32.6 18.8 15.3 7.9 8.7 1910 3,011 854 61.71 26.6 35.1 14.5 16.5 7.5 8.9 1911 2,917 516 61.20 24.6 36.6 16.2 14.4 7.4 8.2 1912 2.882 382 60.16 23.8 36.4 17.2 14.1 7.6 7.9 Fiscal Train Maintenance Conducting Train Rate per mile Freight Train Freight Passenger, year mile per revenue transportation mile density load to all freight earnings train mile per revenue earnings Per Per revenue traffic and (gross) train mile (net) passenger ton tons company Way Equipment cars 1900 $2.86 $.464 $.212 $ 694 $1,490 $.0235 $.0099 407,723 328 74% 24,773 1905 2.67 .393 .270 771 1.236 .0223 .0083 820,257 367 73 39,200 1900 2.85 .354 .281 834 1.381 .0209 .0083 971,165 400 72 40,951 1907 3.01 .407 .246 1 020 1.337 .0226 .0087 1,011,103 407 70 49,432 1908 3.22 .427 .400 1 066 1.327 .0228 .0090 915,388 430 71 49,029 1909 3.14 .361 .361 1 028 1.390 .0226 .0089 927,613 435 69 48,920 1910 2.94 .430 .356 1 037 1.117 .0218 .0090 939,997 429 65 51,690 1911 2.95 .369 .362 1 089 1.130 .0228 .0090 806,834 461 67 50,721 1912 .369 .339 1 085 1.158 .0236 [573] .0087 838,370 511 69 50,948 BOND DESCRIPTIONS Following are descriptions of the bond issues of the Northern Pa- cific Railway System, together with the bases on which they have sold during the decade ending December 31, 1912: NORTHERN PACIFIC RAILWAY Prior Lien Mortgage 4s Dated November 10, 1896 Maturing January Interest payable January 1, April 1, July 1 and October 1 at J. P. Morgan & Company, New York, and in Berlin at 4.20 marks per dollar. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $100 and multiples. Authorized $130,000,000 Outstanding $108,068,500 Per mile . . 19,700 Provisions of Of the total amount authorized, $108,068,500 are outstanding as above ($3,933,000 of which issue: were in the company's treasury June 30, 1912), $6,103,500 have been purchased and can- celled by the sinking fund, $7,887,000 have been reserved to retire the St. Paul & Northern First 6s of 1923, and $7,941,000 have been reserved for construction, acquisitions of owned and controlled property, and the acquisition of securities at not exceeding $1,500,000 yearly. Security: The above bonds are secured by a direct mortgage or by collateral on 5,465.32 miles of road, including land grants, terminals, securities, equipment and future acquisitions. They are secured by a first mortgage on 4,816.4 miles of road, and in effect by a first mortgage on 476.24 miles of road, being a first collateral lien on three entire issues of first mortgage bonds aggre- gating $8,155,000. They are further secured by a second mortgage on 172.68 miles covered by the first lien of the St. Paul & Northern Pacific First 6s of 1923, and are additionally secured by a deposit with the trustee of $821,000 capital stocks of subsidiary companies. Sinking fund: One-half of the net proceeds received from the sales of land, which amount not to exceed $500,000, is to be applied annually to purchase these bonds at not over 110. Bonds so pur- chased are cancelled. The balance of the proceeds of the land sales plus the excess over the $500,000 mentioned above, is to be set aside by the trustee as a cash fund to be used for con- struction, acquisitions of property and of securities at not exceeding $1,500,000 per annum. Equity: These bonds are prior in lien to the Northern Pacific General Lien Mortgage 3s of 2047, a sufficient number of which have been reserved to retire this issue at maturity. Trustee : Mercantile Trust Company, New York. These bonds sold in 1902 on a 3.75 to 3.90 basis 1903 3.85 4.00 1904 3.75 3.98 1905 3.73 3.85 1906 3.75 3.95 1907 3.92 4.25 1908 3.85 4.08 1909 3.85 3.98 1910 3.96 4.05 1911 3.96 4.05 1912 4.00 4.10 These bonds are considered a legal investment for savings banks in New Hampshire, Vermont, Massa- chusetts and Rhode Island. [ 576 NORTHERN PACIFIC RAILWAY General Lien Mortgage 3s Dated November 10, 1896 Maturing January 1, 2047 Interest payable February 1, May 1, August 1 and November 1 at J. P. Morgan & Company, New York, and in Berlin at 4.20 marks per dollar. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $100 and multiples. Authorized $190,000,000 Outstanding $60,000,000 Per mile . . 11,000 Provisions of Of the total amount authorized, $60,000,000 are outstanding as above, of which $8,828,500 issue: are in the treasury of the companj^ and $130,000,000 have been reserved to retire the North- ern Pacific Prior Lien 4s of 1997. Security: The above bonds are secured by a direct mortgage or by collateral on 5,465.32 miles of road including land grants, terminals, securities, equipment and future acquisitions. They are secured, by a second mortgage on 4,816.4 miles of road covered by the first lien of the Prior Lien 4s of 1997, and, in effect, by a second mortgage on 476.24 miles of road, being a second collateral lien on three entire issues of first mortgage bonds aggregating $8,155,000. They are further secured by a third mortgage on 172.68 miles of road covered by the first lien of the St. Paul & Northern Pacific First 6s of 1923 and by a second collateral lien on securities deposited with the Trustee amounting to $821,000. Sinking fund : The unapplied balance of the sinking fund of the Prior Lien 4s of 1997 is to revert to the benefit of this issue and to be used for the purchase and cancellation of these bonds at not over par, whenever the said balance may amount to $50,000. In case these bonds are not procurable at par, this balance is to be applied to the purchase of securities legal for New York savings banks. Trustee: Farmers' Loan & Trust Company, New York. These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. ST. PAUL & NORTHERN PACIFIC RAILWAY First Mortgage 6s Dated June 1, 1883 Maturing February 1, 1923 Interest payable on coupon bonds on February 1 and August I, and on registered bonds on February 1, May 1, August 1 and November 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $10,000,000 Outstanding $7,887,000 Per mile . . 45,600 Under the terms of the Northern Pacific General Lien 3s of 2047, no further bonds of this issue may be issued. [577] Security: The above bonds are secured by a first mortgage on the company's road from St. Paul to Staples, Minn., and branch, totalling 172.68 miles. They are further secured by the equip- ment of the line and its land grants. These bonds have been ASSUMED by the Northern Pacific Railway Company. Smking fund : The proceeds of the sale of lands shall be invested in these bonds at a price not exceeding 120. Bonds so purchased are to be cancelled and if not purchasable at that price, to be held as a sinking fund for the payment of this issue at maturity. Up to June 30, 1911, $134,000 of these bonds had been thus retired. Equity: These bonds are prior in Uen to the Northern Pacific Prior Lien 4s of 1997, a suflScient num- ber of which have been reserved to retire this issue at maturity. Trustee: Central Trust Company, New York. The St. Paul & Northern Pacific Railway was chartered as the Western Railroad of Minnesota January 29, 1874. It was opened for traffic November 1, 1877, and in the following May it was leased to the Northern Pacific Railroad Company for 99 years at a rental of 35% of gross earnings for five years and 40% thereafter. In 1883 the entire capital stock of the company was acquired by the Northern Pacific Company, and on May 9 of that year the company was reorganized under the name of the St. Paul & Northern Pacific Railway Company, and a new lease of the road for 999 years was made to the Northern Pacific Railway Company, the latter guaranteeing as rental 40% of gross receipts, a figure never to be less than the interest upon the entire issue of bonds. The property of the St. Paul & Northern Pacific Railway Company was merged with the Northern Pacific Railway Company in 1896, and its funded indebtedness was thereupon assumed by the latter. These bonds sold in 1902 on a 3.95 to 4.05 basis 1903 4.02 4.40 1904 4.10 4.28 1905 3.97 4.02 1906 3.95 4.17 1907 4.08 4.55 1908 3.95 4.55 1909 4.02 4.55 1910 4.18 4.45 1911 4.20 4.35 1912 4.25 4.50 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. [578] NORTHERN PACIFIC RAILWAY St. Paul-Duluth Division Mortgage 4s Dated June 15, 1900 Maturing December 1, 1996 Interest payable June 1 and December 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000. Authorized $20,000,000 Outstanding $8,080,000 Per mile . . 30,800 Provisions of Of the total amount authorized $8,080,000 are outstanding as above, $2,339,000 have issue: been redeemed by the sinking fund and cancelled, $4,724,000 have been reserved for prior liens, $407,000 have been reserved for improvements on existing property, and $4,450,000 have been reserved for extensions and additions. Security: The above bonds are secured by a direct mortgage on 261.68 miles of road, together with equipment, terminals and securities. They are secured by a first mortgage on 28.59 miles of road, by a second mortgage on 5 miles, covered by the first lien of the St. Paul & Duluth First Consolidated 4s of 1968, by a third mortgage on 17.08 miles covered by the first lien of the St. Paul & Duluth Second Mortgage 5s of 1917, a fourth mortgage on 189.50 miles covered by the first lien of the St. Paul & Duluth First 5s of 1931 and the Duluth Short Line First 5s of 1916, and by a fifth mortgage on 20.52 miles covered by the first lien of the Taylor's Falls & Lake Superior First 6s of 1914. These bonds are additionally secured by a first collateral lien on the entire issue of the Northwestern Improvement Company Debenture Bonds cov- ering the lands granted to the St. Paul & Duluth Railroad Company. Sinking fund : The proceeds from the sale of lands covered by the Northwestern Improvement Company Debentiu-e Bonds mentioned above shall be applied to purchase these bonds at not exceed- ing 105 and interest. If not so purchasable at this price, the proceeds are to be applied to betterments of and additions to the property mortgaged. Trustee: Guaranty Trust Company, New York. These bonds sold in 1902 on a 3.90 to 4.00 basis 1903 3.95 4.15 1904 3.97 4.12 1905 3.95 4.05 1906 3.98 4.15 1907 4.15 1908 4.00 4.50 1909 4.05 4.20 1910 4.10 4.15 1911 4.08 4.17 1912 4.15 4.25 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [579 ] ST. PAUL & DULUTH RAILROAD First Mortgage 5s Dated July 1, 1881 Maturing August 1, 1981 Interest payable February 1 and August 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 5,200 Security: The above bonds are secured by a direct mortgage on 192.28 miles of road, together with equipment and future acquisitions. They are secured by a first mortgage on 171.75 miles of road including the line from St. Paul to Duluth, Minn., and by a second mortgage on 20.52 miles covered by the first lien of the Taylors Falls & Lake Superior First 6s of 1914. These bonds have been ASSUMED by the Northern Pacific Railway Company. Equity: These bonds are prior in lien to the St. Paul & Duluth Second 5s of 1917 and the First Con- solidated 4s of 1968, also the Northern Pacific St. Paul-Duluth Division 4s of 1996, a suf- ficient number of which have been reserved to retire this issue at maturity. Trustee: Central Trust Company, New York. The St. Paul & Duluth Railroad was chartered under the laws of Minnesota on May 23, 1857, under the name of the Lake Superior & Mississippi Railroad Company. The road was opened for traffic September 15, 1870, at which time it was leased to the Northern Pacific Railroad Company, the lease terminating May 1, 1874. The Lake Superior & Mississippi Railroad defaulted the in- terest on its bonds January 1, 1875, and the property was sold under foreclosure May 1, 1877. A new company under the present title was formed June 27, 1877. The property of the St. Paul & Duluth Railroad Company was merged with that of the Northern Pacific Railway Company in June, 1900, at which time the latter assumed its funded indebtedness. These bonds sold in 1902 on a 3.75 to 3.95 basis 1903 4.23 1905 4.12 1906 4.15 1907 3.88 1909 4.68 1910 4.28 1911 4.33 (bid) 1912 4.45 These bonds are considered a leg.al investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. [ 580 ] ST. PAUL & DULUTH RAILROAD Second Mortgage Currency 5s Dated October 1, 1887 Maturing October 1, 1917 Interest payable April 1 and October 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Security : Equity: Trustee: Outstanding .$2,000,000 Per mile . . 8,800 The above bonds are secured by a direct mortgage on 227.1 miles of road, together with equipment. They are secured by a first mortgage on 17.08 miles, a second mortgage on 189.5 miles, covered by the first liens of the St. Paul & Duluth First 5s of 1931 and the Duluth Short Line First 5s of 1916, and by a third mortgage on 20.52 miles of road covered by the first lien of the Taylors Falls & Lake Superior First 6s of 1914. These bonds have been ASSUMED by the Northern Pacific Railway Company. These bonds are prior in lien to the First Consolidated 4s of 1968 and the Northern Pacific St. Paul-Duluth Division 4s of 1996, a suflEicient number of which have been reserved to retire this issue at maturity. Central Trust Company, New York. These bonds sold in 1902 on a 3.88 to 4.10 basis 1903 4.33 4.55 1904 4.15 4.45 1905 4.05 4.18 1906 3.87 4.12 1907 3.95 5.00 1908 4.50 4.72 1909 5.18 5.37 1910 4.45 4.65 1911 4.50 1912 4.50 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. ST. PAUL & DULUTH RAILROAD First Consolidated Mortgage Gold 4s Dated June 1, 1898 Maturing June 1, 1968 Interest payable June 1 and December 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Outstanding $1,000,000 Permile . . 4,300 No further bonds may be issued than are outstanding. Security: The above bonds are secured by a direct mortgage on 232.1 miles of the company's road, together with equipment. They are secured by a first mortgage on 5 miles of road, a second [ 581 ] mortgage on 17.08 miles, covered by the first mortgage of the St. Paul & Duluth Second 5s of 1917, a third mortgage on 189.5 miles covered by the first lien of the St. Paul & Duluth First 5s of 1931, and that of the Duluth Short Line First 5s of 1916, and by a fourth mortgage on 20.52 miles covered by the first lien of the Taylor's Falls & Lake Superior First 6s of 1914. These bonds have been ASSUMED by the Northern Pacific Railway Company. Equity: The above bonds are prior in lien to the Northern Pacific St. Paul-Duluth Division 4s of 1996, a sufficient number of which have been reserved to retire these bonds at maturity. Trustee: Metropolitan Trust Company, New York. These bonds sold in 1902 on a 4.00 basis 1903 4.08 to 4.15 1904 4.15 1905 3.95 4.00 1906 3.95 4.15 1907 4.18 1908 4.15 4.55 1909 4.35 1910 4.12 4.16 1911 4.35 (bid) 1912 4.20 4.35 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. TAYLOR'S FALLS & LAKE SUPERIOR RAILROAD First Mortgage Currency 6s Dated January 1, 1884 Maturing January 1, 1914 Interest payable January 1 and July 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $210,000 Outstanding $210,000 Per mile . . 10,200 Security: The above bonds are secured by a first mortgage on the company's road from Wyoming to Taylor's Falls, Minn., 20.52 miles, together with the equipment of the line. These bonds have been ASSUMED by the Northern Pacific Railway Company. Trustee: Central Trust Company, New York. The Taylor's Falls & Lake Superior Railroad Company was chartered in February, 1875, with the power to construct a line from a point on the line of the Lake Superior & Mississippi Railroad to the St. Croix River at Taylor's Falls. The road was completed and opened for traffic November 8, 1880, having cost $303,000, advanced jointly by the Duluth and Minneapolis Companies, each of which was to receive, as representing such half-interest, one-half of an issue of bonds made by the Minneapolis & St. Louis Railroad and secured on the above road, together with half the stock of the Taylor's Falls & Lake Superior Railroad Company. [ 582 ] On October 12, 1880, the line was leased to tlie Minneapolis Company at 30% of its gross earnings. In November, 1898, the property of the Taylor's Falls Road was conveyed to the St. Paul & Duluth Railroad Company, whose property in turn was pm-chased by the Northern Pacific Railway Company in 1900. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. DULUTH SHORT LINE RAILWAY First Mortgage Currency 5s Dated September 1, 1886 Maturing September 1, 1916 Interest payable March 1 and September 1 at J. P. Morgan & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $500,000 Outstanding $500,000 Per mile . . 27,800 Security : These bonds are secured by a first mortgage on 17.75 miles of the company's line, including the 14.33 miles from Thomson to Duluth, a branch to West Superior, Wis., and a bridge over the St. Louis River. The above bonds have been ASSUMED by the Northern Pacific Railway Company. Equity: These bonds are prior in Hen to the St. Paul & Duluth Second 5s of 1917; to the First Con- soUdated 4s of 1968; and to the Northern Pacific St. Paul-Duluth Division 4s of 1996, a suf- ficient number of which have been reserved to provide for the retirement of the above bonds. Trustee: Central Trust Company, New York. The Duluth Short Line Railway Company was chartered July 1, 1886, and its road was opened for traffic in September, 1888. It was leased from September 1, 1886, to the St. Paul & Duluth Railroad Company at an annual rental, being the interest on its bonds. Its property was purchased by the St. Paul & Duluth Railroad Company in November, 1898, the latter company being merged with the Northern Pacific Railway Company in 1900. These bonds were quoted in 1909 on a 5.00 basis (bid) These bonds were sold in 1910 5.20 1911 5.22 (bid) 1912 4.60 to 5.00 These bonds are considered a legal investment for savings banks in Maine, New Hampshire aud Rhode Island. [ 583 ] WASHINGTON & COLUMBIA RIVER RAILROAD First Mortgage 4s Dated March 1, 1895 Maturing July 1, 1935 Interest payable January 1 and July 1 at 34 Nassau St., New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,620,000 Outstanding $140,000 Per mile . . 800 Provisions of Of the total amount authorized $140,000 are outstanding as above, and the balance, $2,480,000, issue: is in the treasury of the company. Security: The above bonds are secured by a first mortgage on 167.65 miles of road, including the com- pany's line from Pendleton, Ore., to Dayton, Wash., 127 miles, and branches, together with the equipment of the road and all further acquisitions. These bonds have been ASSUMED by the Northern Pacific Railway Company. Trustee: Farmers' Loan & Trust Company, New York. The Washington & Columbia River Railway Company was chartered August 4, 1892, as the successor to the Oregon & Washington Territory Railroad Company. On February 1, 1898, it passed under the control of the Northern Pacific Railway Company through the purchase oi prac- tically all its stock and income bonds. It was not until July, 1907, however, that it became operative as an integral part of the Northern Pacific Railway System. These bonds were quoted in 1909 on a 4.88 basis (bid) 1910 4.90 1911 5.00 July, 1912 5.05 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Vermont, Massachusetts and Rhode Island. WASHINGTON CENTRAL RAILWAY First Mortgage 4s Dated June 1, 1898 Maturing March 1, 1948 Interest payable March 1, June 1, September 1 and December 1 at the Manhattan Trust Company, New York. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $100 and multiples. Authorized $1,853,000 and $15,000 per mile additional Outstanding $850,500 Per mile . . 6.500 Provisions of Of the amount authorized, $850,500 are outstanding as above, and the balance, $1,002,500, issue: is held in the treasury of the Northern Pacific Railway Company. [ 584 ] Security: The above bonds are secured by a first mortgage on the company's road from Cheney to Coulee City, Wash., 129.88 miles, together with equipment and future acquisitions. These bonds have been GUARANTEED as to INTEREST by the Northern Pacific Railway Company under the terms of its lease. Trustee: Knickerbocker Trust Company, New York. The Washington Central Railway Company was organized March 31, 1898, to take over the property of the Central Washington Railroad Company, which was sold under foreclosure January 19, 1898. The Washington Central Railway Company was leased for 999 years from March 1, 1898, to the Northern Pacific Railway Company, which took possession of the property June 30, 1898, at a rental of $61,520 a year, being interest on its bonds. These bonds sold in 1902 on a 4.28 basis 1904 4.33 to 4.85 1905 4.28 4.38 1906 4.37 4.45 1909 4.40 1910 4.42 4.45 1911 4.50 December, 1912 4.60 (bid) NORTHERN PACIFIC GREAT NORTHERN Chicago, Burlington & Quincy Joint Collateral Trust Gold 4s Dated July 1, 1901 Maturing July 1, 1921 Interest payable January 1 and July 1 for coupon bonds, January 1, April 1, July 1 and October 1 for registered bonds, at New York and Berlin. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000, $5,000 and multiples. Coupon and registered bonds interchangeable. Authorized $222,400,000 Outstanding $215,227,000 Provisions of The authorized amount of tliis issue is limited to twice the par value of the capital stock of issue: the Chicago, Burlington & Quincy Railroad. Of this amount, $215,227,000, are outstanding as above, and the balance, $7,173,000, is issuable in exchange for the above-mentioned stock. Security : The above bonds are a direct obligation of the Northern Pacific Railway and the Great North- ern Railway Companies, jointly and severally, and are secured by a deposit with the trustee of $107,613,500 capital stock of the Chicago, Burlington & Quincy Railroad. Redemption: These bonds are redeemable at 105 and interest on any interest date after January 1, 1906. A suSicient amount of Great Northern Railway First and Refunding Bonds of 1961 has been reserved to retire this issue at maturity. Trustee: Standard Trust Company, New York. [ 585 ] For a further description of this issue, see page 180. These bonds sold in 1901 on a 3.95 to 4.45 basis 1902 4.25 4.60 1903 4.40 5.10 1904 3.87 4.80 1905 3.75 4.10 1906 3.85 4.25 1907 4.25 5.80 1908 4.00 4.80 1909 4.10 4.50 1910 4.30 4.62 1911 4.20 4.60 1912 4.20 4.75 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. PENNSYLVANIA RAILROAD COMPANY PENNSYLVANIA RAILROAD COMPANY HISTORY The Pennsylvania Railroad claims the distinction of being the greatest railroad in the world in point of earnings and traffic. The Pennsylvania System, including the mileage operated by the Pennsylvania Railroad Company, the Pennsylvania Company, and the lines they control, aggre- gated 11,406 miles of main track as of December 31, 1911, including 67 miles of ferries and canals. During 1911 the system's gross earnings were over $336,000,000, while those of the Pennsylvania Railroad Company were over $157,000,000, and the total number of tons carried by the system amounted to over 413,000,000, or nearly one-quarter of the tonnage of the United States. The Pennsylvania Railroad Company is one of the oldest in the United States, its annual report of December 31, 1911, being the sixty-fifth issued by it. Incorporated April 13, 1846, under the laws of the State of Pennsylvania, it was planned to construct a line of railroad from Harrisburg to Pittsburg, Pennsylvania, a distance of 249 miles. The work of construction was begun on the Harrisburg end in July, 1847, and various divisions were ojjened from time to time as completed from 1850 to 1854, when, in February of that year, the completed line was thrown open for traffic. The link from Harrisburg to Philadelphia was made up of the old Philadelphia & Columbia Railroad and the Harrisburg, Portsmouth, Mt. Joy & Lancaster Railroad. The former was pur- chased in 1857 together with the main line of a system of public works of the state, including canals and railroads which hatl been planned as early as 1826 to connect the Susquehanna system of canals with Philadelphia. In order to keep pace with the rapid extension of the Pennsylvania Railroad System, the Penn- sylvania Company was chartered in 1870 for the purpose of managing the interests of the Pennsyl- vania Railroad Company in its various lines leased and controlled, lying west of Pittsburg. The Pennsylvania Railroad owns the entire $80,000,000 capital stock of the Pennsylvania Company. The latter owns no mileage directly, but operates under lease the following roads: Pittsburgh, Fort Wayne & Chicago Railway and leased lines, Pittsburgh, Youngstown & Ashtabula Railway, Erie & Pittsburgh Railroad, Cleveland & Pittsburgh Railroad, Toledo, Columbus & Ohio River Railroad, South Chicago & Southern Railway, Massillon & Cleveland Railway, and several smaller lines. It controls through ownership of all or a majority of their capital stocks the following companies which are operated through their own organization: Pittsburgh, Cincinnati, Chicago & St. Louis Railway, Grand Rapids & Indiana Railway and affiliated lines, Cleveland, Akron & Cincinnati Railway, [ 589 ] Waynesburg & Washington Railroad, Pennsylvania Terminal Railway, Cincinnati, Lebanon & Northern Railway, Vandalia Railroad Lines, Louisville Bridge Company, Wheeling Terminal Railway and joint interests in Central Indiana Railway, Lake Erie & Pittsburgh Railway, Pittsburgh, Chartier & Youghiogheny Railroad, Toledo, Peoria & Western Railway. In January, 1907, the "Pennsylvania" completed arrangements for the merger of the Phil- adelphia & Erie Railroad, operating 307 miles of track between Sunbury and Erie, Pennsylvania. The merger took effect as of May 1, 1907. In carrying out the policy of absorbing minor roads where such acquisition promotes efficiency and economy of operation, the Bald Eagle Valley Railroad, the Junction Railroad and the South- west Connecting Railway Companies were absorbed during 1908 and their properties taken over, the Allegheny Valley Railway was merged in April, 1910, and the Ridgeway & Clearfield Railroad in April, 1911. The Bedford & Bridgeport Railway and the Bedford & Hollidaysburg Railroad consolidated in May, 1911, as the Hollidaysburg, Bedford & Cumberland Railroad. In August, 1910, the directors of the Pennsylvania Railroad approved a proposition to lease the Northern Central Railway for 999 years at a rental of a stock dividend of 40%, a cash dividend of 10%, a guaranteed annual dividend of 8% on the capital as increased by the foregoing allotment, with but a small dissenting vote. The stockholders of the Northern Central Railway agreed in November, 1910, to ratify this lease. Delays in its consummation have been brought about by suits of the dissenting minority stockholders, which are at present pending settlement. The Peimsylvania Tunnel & Terminal Railroad Company was chartered to construct a ter- minal and approaches in New York City. In 1903 work was begun upon this expensive engineering feat, and during 1910 the New York Tunnel Extension was practically completed. The Pennsyl- vania Depot and tubes coimecting it were thrown open for traffic November 27, 1910, and from that date the entire tunnel extension from that point to a connection with the Long Island Railroad at Suimyside Yard has been operated by the Pennsylvania as agent for the Pennsylvania Tunnel & Terminal Railroad Company. The latter company issued in 1911 its certificate of indebtedness to the Pennsylvania Railroad Company for $84,861,420 in settlement for funds advanced for the construction of the Tunnel and Terminal. This certificate and $15,000,000 of its full-paid capital stock are included in the securi- ties owned by the Pennsylvania, and are carried on its balance sheet at valuations respectively of $57,461,419 and $1. The balance of its capital stock, $10,000,000, is owned by the Pennsylvania Company. Jointly with The New York, New Haven & Hartford Railroad Company, the Permsylvania Railroad Company has owned for many years the entire capital stock of the New York Connecting Railroad Company, which is now constructing a railroad from a connection with the Long Island Railroad at the Borough of Queens, New York City, through it to a connection with The New York, New Haven & Hartford Railroad near Port Morris in the Borough of Bronx. Upon the completion of this connection a direct all-rail movement via the Pennsylvania Station, New York City, for the passenger traffic interchanged between the two systems will be made possible, and the new route should materially increase facilities for and expedite the movement of New England passenger and freight traffic and avoid congestion of the New York terminals and harbor, and delays which often arise under the float service now in use due to fog, ice, tides and crowded conditions of the Hudson and East Rivers. [ 590 ] The time required to construct this important Hnk will be about three years. It has been estimated that the cost thereof will be about $15,000,000 in addition to $5,000,000 previously ad- vanced in equal amounts by the two owning companies, and represented by its capital stock and notes. All securities issuable for construction purposes will bear the guarantee both as to principal and interest by the Pennsylvania and the New Haven, and under the agreement they will operate the line jointly, participating equally in its profits and meeting equally its deficits. The Pennsylvania System in the past has issued large amoimts of equipment trust certificates. The total amount issued under all series up to December 31, 1911, was $105,300,000. The total amount outstanding and unredeemed on the above date was $-11,600,000. Against this amount 86,528 cars are held as security. The Pennsylvania Railroad Company's share in these outstanding obligations amounted to $26,757,828 in December, 1911, against which 55,719 cars are held as security. The Pennsylvania Railroad Company, in addition to the above-mentioned interests, controls through direct ownership of and in most instances a large majority of their capital stocks, the follow- ing railroads which are operated through their own organizations: Philadelphia, Baltimore & Washington Railroad, West Jersey & Seashore Railroad, Northern Central Railway, Cumberland Valley Railroad, Long Island Railroad, Baltimore, Chesapeake & Atlantic Railway, Philadelphia & Camden Ferry Company. It also controls the Lykens Valley Coal Comjiany, the Summit Branch Mining Company, the Lytle Coal Company, the Mineral Railroad & Mining Company and the Susquehanna Coal Com- pany. Through the Pennsylvania Company it has acquired control jointly with the Reading Com- pany of the Cambria Steel Company and the Pennsylvania Steel Company. Among its securities owned on December 31, 1911, the Pennsylvania Railroad had extensive holdings in the properties of other important systems. It owned $14,273,600 preferred and $5,725,000 common stocks of the Baltimore & Ohio Railroad Company, $4,062,500 capital stock of The New York, New Haven & Hartford Railroad Company and $32,484,800 common and $5,820,000 pre- ferred stocks of the Norfolk & Western Railway. Its holdings of the stocks of these companies give it a voice in the management of these outside properties. PROPERTY The Pennsylvania System extends from the city of New York, and from Philadelphia, Balti- more and Washington, westerly to the Great Lakes and to the Mississippi River, with lines running southerly to Chesapeake Bay, to the Potomac and to the Ohio Rivers, and easterly to the end of Long Island. The lines east of Pittsburg and Erie are managed by the Pennsylvania Railroad Company, while those west of the cities named are managed by the Pennsylvania Company. The entire system had an aggregate mileage, December 31, 1911, of 11,406.87 miles. The Pennsylvania Railroad Company operated for the fiscal year ending December 31, 1911, 4,017.79 miles as follows: Miles owned in fee 2,127.61 Miles operated under contract 1,682.44 Miles operated imder trackage arrangements 207.74 Total miles operated 4,017.79 [591 ] As compared with 1910, the Pennsylvania operated 41.1 miles more in 1911. This was due to the absorption of the Ridgway & Clearfield Railroad. The mileage of the Pennsylvania Railroad lies chiefly in the States of Pennsylvania and New Jersey. The population of the two in 1890 was approximately 6,700,000, in 1900 8,200,000, and in 1910 was 10,200,000. CAPITALIZATION The capitalization of the Pennsylvania Railroad Company on December 31, 1911, was approxi- mately as follows: Capital stock $453,880,560 Funded debt 262,848,007 Nominal capital $716,728,567 Rentals capitalized at 5% 98,384,080 Gross capitalization $815,112,647 Securities owned 320,599,735 Net capitalization $494,512,912 Net capital per mile operated $123,072 Average miles operated 4,017.79 Net income to net capital 12.9% Fixed charges to net income 37.9% Margin of safety 62.2% In January, 1911, the directors were authorized to increase the company's capital stock from $500,000,000 to $600,000,000. In the following March new stock was issued, amounting to $41,261,600. This new stock was offered to stockholders of record at par up to 10% of their respective holdings. On January 1, 1912, the total amount of capital stock outstanding was $453,877,850. The funded debt above includes $162,930,370 of the company's direct obligations, $54,546,500 of the secured debts of other companies whose properties have been acquired by the Pennsylvania subject thereto, $14,822,250 Guaranteed Stock Trust Certificates, and $26,757,828 of Equipment Trust obligations referred to above. One-half the company's direct obligations are represented by its Convertible 33^^% bonds of 1915, which were offered to stockholders in 1905 at par and which are outstanding to the extent of over $86,800,000. The Pennsylvania operates under contract 1 ,682 miles. For the use of this mileage the com- pany paid in 1911 fixed rentals of $3,402,093 and rentals for roads operated on the basis of net revenue of $1,517,111. Capitalizing these amounts at 5%, we get a figure of nearly $100,000,000, representing the nominal capitalization of the roads in question. The value of the securities which the company owned as of December 31, 1911, amounted to $433,214,164 par value. These were carried on the company's general balance sheet at $321,540,716. The par value of the stocks owned was $290,263,128, and included its holdings of Baltimore & Ohio stock. New York, New Haven & Hartford, the entire $80,000,000 stock of the Pennsylvania Com- pany, the $15,000,000 stock of the Pennsylvania Tunnel & Terminal Railway Company, holdings of Norfolk & Western and Northern Central Railway Companies' stock, and the stocks of its other subsidiary companies. The par value of bonds owned amounted to $142,951,030, the largest single item being the Pennsylvania Tunnel & Terminal Railway Company's Certificate of Indebtedness. $67,614,550 of the foregoing securities were deposited under the Consolidated Mortgage and Col- lateral Trust Loans. [ 592 ] The total income received from the securities owned by the Pennsylvania Railroad Company during the year 1911 amounted to $14,450,594, or 4.4% on the cost of the securities as per balance sheet. This amount is equivalent to 3.1% on the company's outstanding capital stock. It will be noted that the company's net capital per mile of road operated was $123,072. This compares with $159,345 for the Reading and $111,293 for the Baltimore & Ohio, two similar properties. Upon these net capitalizations the three in question were able to show total net incomes of 12.9%, 13.8% and 0.5% respectively. During 1911 the Pennsylvania's fixed charges, including interest on its funded debt, both direct and assumed, rentals, taxes, sinking funds, etc., were $24,167,141. This was equal to 37.8% of the company's total net income. There was an equity in earnings over charges of over $37,300,000, or 62.2%. In other words, the company's corporate income could decline almost two-thirds before its fixed charges would be affected. This margin of safety — so called — compares with 52% for the Reading and 43% for the Baltimore & Ohio. The general average of the country is about 40% to 45%. CHARACTER OF TRAFFIC Nearly three-quarters of the Pennsylvania's business is freight, and two-thirds of this freight business is represented by the transportation of mine products. Of the total tons of revenue freight 125,175,068, moved in 1911, 66,274,246 tons were of coal and coke. The following is a classification of the company's freight tonnage for the past five years : Products of 1911 1910 1909 1908 1907 Agriculture 4.36% 4.16% 4.75% 5.94% 5.18% Anmials 1.12 1.22 1.56 1.77 1.43 Mines 63.07 65.89 66.02 65.45 64.75 Forests 3.91 4.57 4.82 4.77 4.56 Manufactures 16.84 19.81 19.32 18.52 20.38 Mdse. and Misc 10.69* 4.35 3.53 3.55 3.70 100.00% 100.00% 100.00% 100.00% 100.00% Following are the more important trafiic statistics of the Pennsylvania Railroad Company for the years 1907 to 1911 inclusive: Year Freight Train Freight Average rate density load earnings per ton tons per mile 1907 5,502,007 574 $123,826,165 $.0057 1908 4,269,464 602 97,989,330 .0057 1909 4,840,916 656 110,748,978 .0058 1910 5,099,717 649 118,203,016 .0058 1911 4,833,448 671 114,069,932 .0059 It will be seen that the Pennsylvania's freight business declined 22% in 1908 from the high figures of 1907. For almost any other road a decline of 22% would have been serious. Train load- ing showed improvement, however, increasing 28, or 5%. In 1909 and 1910 substantial increases in tons carried were reported, and, with an increase in the average rate, earnings were proportionately better. In 1911, however, tonnage figures fell off slightly, while the train load, showing the com- pany's operating efficiency, was the highest ever reported. Earnings declined but nominally. * 6.32% switching items included above. [ 693 ] About 22% of the company's gross earnings were from the transportation of passengers. The number of passengers carried in 1911 decreased from the high figures of 1910, 69,979,457, to 67,445,714. The company's passenger density — the number of passengers carried one mile per mile of road — increased slightly, however, and passenger earnings were the highest in the history of the company. Year Passenger Number of Passenger Average rate density passengers earnings per passenger per train per mile 1907 417,591 64 $31,353,614 $.0192 1908 368,341 61 28,951,656 .0198 1909 392,224 63 30,410,788 .0196 1910 425,968 64 33,185,031 .0196 1911 428,777 62 34,113,529 .0198 EARNINGS The Pennsylvania Railroad reports the following gross and net earnings, figured on the miles operated for the years 1907 to 1911 inclusive: Year Average miles Gross Per mile Net Per mile Operating operated earnings earnings ratio 1907 1908 1909 1910 1911 3,902 $164,812,825 $42,238 $45,205,477 $11,587 72.6^ 3,980 136,296,871 34,245 38,884,855 9,771 71.5 3,947 153,564,527 38,906 46,428,396 11,764 69.7 3,977 160,457,298 40,346 45,644,670 11,479 71.6 4,018 157,487,412 39,195 44,259,020 11,017 71.9 No railroad in the country reports such a volume of earnings, either gross or net. In 1890 gross revenues were over $66,000,000. By 1901 gross earnings had reached the $100,000,000, and to-day they average yearly that amount higher than in 1890. In 1907 gross revenues were the Iiighest the Pennsylvania ever produced. The company's operating ratios, given below, for the past five years, show how closely net earnings parallel gross. Declines in operating expenses have kept pace with falling earnings, and as the latter have improved, especially since 1909, operating costs have expanded. These ratios have been made up as follows: Year 1907 1908 1909 1910 1911 to gross 31.6% 29.6 Conducting transportation to gross 41.0% 41.9 Total oper- ating expenses to gross 72.6% 71.5 31.4 38.3 69.7 32.1 39.5 71.6 31.1 40.8 71.9 The Pennsylvania's gross earnings per mile of $39,195 in 1911 compare with $43,750 per mile for the Reading and $19,879 for the Baltimore & Ohio Railroads. Based on the annual report of the Pennsylvania Railroad Company the following table has been prepared showing the conil)iiie(l earnings for the fiscal years 1908 to 1911 inclusive, ending December 31, of all the trans])()rtati()n comimnies which are operated, controlled by or affiliated in interest with the Pennsylvania Kailioad System. These include, beside the Pennsylvania Rail- road Comjjany and the Pennsylvania Company, the Pliiladeljihia, Baltimore & Washington Rail- [594 ] road, the Northern Central Railway, the West Jersey & Sea Shore Raih-oad, tlie Cumberland Valley Railroad, the Pittsbiirgh, Cincinnati, Chicago & St. Louis Railway, the Vandalia Railroad, and the Grand Rapids and Indiana Railway Companies. The equity of the Pennsylvania Railroad in the above-mentioned companies is extremely large, and in almost every instance is by no means repre- sented by the dividends paid by those companies. 1911 1910 1909 1908 Gross earnings . . $336,351,868 $346,215,498 $315,406,804 $276,780,314 Operating expenses 261,210,277 267,422,917 229,143,591 205,388,087 Net earnings. . . $75,141,591 $78,792,581 $86,263,213 $71,392,227 Other income . . 34,985,094 34,124,065 30,500,494 29,111,852 Total net income $110,126,685 $112,916,646 $116,763,707 $100,504,079 Total deductions* 108,209,372 109,107,290 113,520,505 99,250,907 Surplus for year . $1,917,312 $3,809,356 $3,243,202 $1,253,172 MAINTENANCE During the past five years the Pennsylvania Railroad Company has spent $240,000,000 out of income for maintenance of way and equipment. This is an average of $48,000,000 a year, or $12,155 per mile of road operated. Following are the amounts which have been spent: Year Maintenance Total Per Way Equipment maintenance mile 1907 $20,265,844 $31,721,614 $51,987,458 $13,322 1908 15,177,314 25,113,4.55 40,290,769 10,122 1909 19,104,548 29,111,443 48,215,991 12,225 1910 20,342,489 31,117,989 51,460,478 12,939 1911 18,353,290 30,579,966 48,933,256 12,177 The average traffic density and the total maintenance per mile of the Pennsylvania for the period in question compare with the Reading and the Baltimore & Ohio as follows: Five years Traffic Maintenance density per mile Pennsylvania 5,316,000 $12,155 Reading 4,692,000 11,545 Baltimore & Ohio 2,766,500 5,820 ADDITIONS AND BETTERMENTS Besides the above enormous amounts spent for maintenance, the com])any has appropriated from surplus earnings for improvements, additions, etc., since 1901 the following sums: * Includes interest, rentals, dividends, reserves, deductions for betterments and all extraordinary expenditures. [ 595 J Year Amount Year Amount 1901 $10,824,595 1907 $5,760,651 1902 12,500,000 1908 4,538,981* 1903 9,472,728 1909 11,581,810* 1904 6,220,922 1910 19,604,597* 1905 8,424,881 1911 6,265,887 1906 11,201,475 The company's balance sheet of December 31, 1911, sliows $33,088,133 of income spent on addi- tions to property since June 30, 1907. The total additions to property during the fiscal year 1911 amounted to $14,319,530. Of this sum $6,265,887 were charged to Income, as above, $200,000 to Reserve for Additions and Better- ments, $1,792,687 to Equipment Depreciation Reserve and $5,560,956 to Capital Account ($1,889,499 to Road and $3,671,457 to Equipment). The New York Central spent almost identically the same amount for additions and betterments during 1911 as did the Pennsylvania. DIVIDENDS From the date of its organization up to December 31, 1911, the Pennsylvania Railroad Com- pany has paid cash dividends aggregating over 365%, or about $420,000,000. It has paid dividends longer than any other railroad m the United States, and has never failed to declare a dividend in any single year. Yearly dividend disbursements average over $25,000,000. The company's record since 1875 is as follows: Year Rate Year Rate 1875-6 . . . . . . . 8% 1889 . . . • . . 5K% 1877 . . . . . . . 5V2 1890 . . . . . . 5 1878 . . . . . . . 2 1891 . . . . . . 3 1879 . . . . ... 43^ 1892 . . . ... 01^ 1880 . . . . . . . 6 and 1% in scrip 1893-9 . . . ... 5 1881 . . . . . . . 8 1900-5 . . . . . . 6 1882 . . . . ... 61^ 1906 . . . ... 63^ 1883 . . . ... 41^ 1907 . . . . . . 7 1884-8 . . . . . . 5 1908-12 . . . . . . 6 The company reported a Free Surplus of $27,397,808 on December 31, 1911, which, together with Appropriated Surpluses of $74,573,498, is equal to nearly $102,000,000, or 22% of the com- pany's $453,877,500 capital stock. STATISTICS Following are the capitalization, earnings and traffic statistics of the Pennsylvania Railroad, based on the average miles operated for the year 1900, and for the years 1905 to 1911 inclusive: * The appropriations of 1908, 1909 and 1910 include $1,000,000, $4,000,000 and $12,400,000 respectively, applied toward the con- struction of the New York Tunnel Extension. [ 596 ] PENNSYLVANIA RAILROAD Fiscal Capital Funded Rentals Gross Owned by Net Extra year stock debt at 5% capital company capital miles operated 3,648 mam track 1900 $il,530 $29,957 $67,020 $138,507 $45,220 $92,287 2,038 1903 78,808 49,974 61,596 190,378 61,631 128,747 3,839 2,028 1906 78,509 49,156 58,718 186,383 53,955 132,428 3,897 2,109 1907 80,623 69,445 46,776 196,844 60,349 136,495 3,902 2,123 1908 79,046 80,044 32,348 191,438 62,208 129,230 3,980 2,149 1909 103,48-t 74,891 38,798 216,173 68,493 147,680 3,947 2,133 1910 103,749 67,860 28,424 200,033 70,264 129,769 3,977 2,173 1911 112,961 65,417 24,484 202,862 79,790 123,072 4,018 2,197 Fiscal Gross Maintenance Transportation Net Other Total Fixed Surplus avail- year operating and general operating mcome net charges able for revenue Way $3,095 Equipment $3,699 expense revenue $1,779 income $3,498 dividends 1900 $24,271 $9,131 $8,346 $10,125 $4,627 1905 34,884 3,939 6,346 14,041 10,558 3,133 13,693 5,886 7,807 1906 38,039 4,377 6,723 13,022 11,917 3,280 15,917 6,075 9,122 1907 42,238 5,193 8,129 17,329 11,587 3,535 15,122 6,549 8,573 1908 34,243 3,813 6,309 14,352 9,771 3,615 13,386 6,332 7,054 1909 38,906 4,830 7,375 14,927 11,764 4,041 15,805 6,931 8,874 1910 40,346 5,115 7,824 15,929 11,479 4,389 15,868 6,368 9,500 1911 39,193 4,567 7,610 16,001 11,017 4,887 15,904 6,014 9,890 Fiscal Divi- ' Other Surplus Operating Total Conducting Fixed Gross Net Per cent year dends charges expenses mainte- transpor- charges earmngs mcome earned or to gross nance to tation to to gross to gross to net capital income eammgs gross gross eammgs capital capital stock $2,407 $2,190 $30 65.5% eammgs eammgs 37.5% 22.6% 10.8% 1900 28.0% 17.6% 11.1% 1905 4,718 3,040 49 69.7 29.5 40.2 16.8 18.3 10.6 9.9 1906 5,098 3,963 61 68.7 29.2 39.5 16.0 20.4 11.5 11.6 1907 5,614 2,283 666 72.6 31.6 41.0 15.5 21.4 11.1 10.6 1908 4,742 2,093 217 71.5 29.6 41.9 18.5 17.9 10.3 8.9 1909 4,857 3,845 172 69.7 31.4 38.3 17.8 18.0 10.7 8.6 1910 6,138 2,671 691 71.6 32.1 39.5 15.8 20.1 12.2 9.1 1911 6,458 2,325 1,107 71.9 31.1 40.8 13.3 19.3 12.9 8.7 1905 1906 1907 1908 1909 1910 1911 Way Equipment Conducting Train Rate per i transportation mile per revenue earnings Per train mile (net) passenger .435 .444 .506 .479 .542 .540 Freight Train Freight Passenger, density load to all freight revenue traffic and tons company cars .719 .787 .721 .743 .866 .792 .779 .0201 .0201 .0191 .0197 .0196 .0195 .0198 $.0198 $.0054 3,268,276 477 .0059 .0059 .0057 .0037 .0038 .0058 .0058 4,398,407 4,742,081 5,502,007 4,269,464 4,840,916 3,099,717 4,833.448 505 529 374 602 636 649 671 72% 74 74 75 72 72 73 37,794 63,492 57,751 38,357 63,222 69,068 80,483 83,488 [ 5D7 BOND DESCRIPTIONS Following are descriptions of the bond issues of the Pennsylvania Railroad System, together with the bases on which they have sold during the decade ending December 31, 1912: PENNSYLVANIA RAILROAD Consolidated Mortgage 5s, 4s and sJ^^s (i) Gold 5s Issued September 1, 1879 Maturing September 1, 1919 Interest payable March 1 and Sei)tember 1 on coupon l>onds; March 1, June 1, September 1 and December 1 on registered bonds; at the Company's office, Philadelphia. Coui)ou bonds of $1,000. Registered bonds of $1,000. Issued $5,000,000 Outstanding $4,998,000 Cancelled . 2,000 (2) Gold 4S Issued May 1, 1893 Maturing May 1, 1943 Interest payable May 1 and November 1 at the Farmers" Loan & Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Issued $3,000,000 Outstanding $2,610,000 Cancelled . 390,000 (3) Sterling 3HS Issued July 1, 1895 INIaturing July 1, 1945 Interest payable January 1 and July 1 at the Joint Stock Bank, Ltd., London. Coupon bonds of £200, registerable as to jjrincipal or fully registerable. Issued $4,850,000 Outstanding $4,560,940 Cancelled . 289,060 (4) Currency 4s Issued May 1, 1908 Maturing May 1, 1948 Interest payable May 1 and November 1 at New York or Philadelphia. Coupon bonds of $1,000, registerable as to principal or fully registerable. Issued $20,000,000 Outstanding $20,000,000 (5) Sterling 4s Issued May 1, 1908 Maturing May 1, 1948 Interest payable May 1 and November 1 at London. Coupon bonds of £200, registerable as to principal or fully registerable. Issued $19,400,000 Outstanding $19,400,000 Provisions of The mortgage covering the above bonds (dated July 1, 1873) authorized an issue of not ex- issue: ceeding $100,000,000 outstanding at any one time. Of this amount $51,568,940 were outstand- ing January 1, 1913. Sinking fund: The company agrees that it will set apart from the preceding year's net income on the fifth year after the date of bonds entitled to the security of a sinking fund, and annually there- after, an amount equal to 1% of the principal of said bonds outstanding, this amount to be applied to the purchase at not exceeding par of bonds so issued. The bonds purchased arc [ 600 ] to be cancelled. If bonds are not so purchasable, the amount shall be invested in other law- ful securities which shall be applied to the sinking fund. On December 31, 1912, the total amount of securities and cash held amounted to $2,882,031. Security: The above bonds are secured by direct mortgage on 2,115.82 miles of road, on terminals in Philadelphia and Pittsburg, and on real estate, securities, equipment, leaseholds, etc. They are secured by a first mortgage on 1,093.01 miles, including the line from Trenton, N. J., to York, Pa., and from Philadelphia to Shenandoah; also from Harrisburg to Pittsburg and Altoona to Lock Haven. They are secured by a second mortgage on 979.59 miles, including the 98.0G miles cox crcd by the Pittsburg, \'irginia & Charleston First 4s of 1943; the 136.59 miles covered by tlic Western Pennsylvania Con-soiidated 4s of 1928; on the 287.54 miles covered by the Pliilaayable January 1 and July 1 at Broad Street Station, Philadeljjhia. Coupon bonds of $1,000, registerable as to principal. Authorized $2,500,000 Outstanding $1,021,000 Per mile . . 13,250 This mortgage has been closed. Security: The above bonds are secured by a direct mortgage on 77.09 miles of railroad belonging to the company. It is secured by a first mortgage on 15.55 miles and by a second mortgage on 61.54 miles of road covered by the first mortgages of the Bell's (iap Railroad Consolidated 6s of 1913 and the Clearfield & Jefferson Railroad First 6s of 1927. These bonds have been ASSUMED by the Cambria & ("Icarfield Railway Company. Ecjuity : The above bonds are prior in lien to the Cambria & Clearfield Railway General Mortgage 4s of 1955, a sufficient amount of which has been reserved to retire this issue at maturity. 'IVustec: (iuarantee 'I'rust & Safe Deposit Company, Philadelphia. The Pennsylvania & Northwestern Railroad Company was organized December 27, 1889, as a consolidation of the Bell's Gaj) Railroad and the Clearfield & Jefferson Railway Companies. The control of the company was acquired by the Pennsylvania Railroad Company on February 20, 1902, [ 614 ] and together with several other companies, it was consolidated on June 25, 1903, into the Cambria & Clearfield Railway Company, which is controlled by the Pennsylvania Railroad Companj' through ownership of practically its entire capital stock. These bonds sold in 1906 on a 4.20 to 4.40 basis 1907 4.30 4.45 1909 4.40 (bid) 1910 4.40 (bid) 1911 4.40 (bid) December, 1912 4.50 (bid) BELL'S GAP RAILROAD Consolidated Mortgage Sinking Fund 6s Dated April 2, 1883 Maturing April 1, 1913 Interest payable April 1 and October 1 at Broad Street Station, Philadelphia. Coupon bonds of $500 and $1,000, registerabie as to principal. Authorized $200,000 Outstanding $145,000 Per mile . . 6,000 This mortgage has Ijeen closed. Securit\': The above bonds are secured by a first mortgage on all the railroad of the company from Bellwood to Witmer (Irvona), Pa., 24.12 miles, including all extensions thereof, together with lands, buildings, rolling stock and incomes. These bonds have been ASSUMED by the Cambria & Clearfield Railway Company. Siiiking fund : In any year in which a dividend is paid on the capital stock, $5,000 is to be applied to the pur- chase of these bonds at not exceeding par, or, if not so used, to be invested in other securities. Ki(iiitj': The above bonds are prior in lien to the Pennsylvania & Northwestern General 5s of 1930 and to the Cambria & Clearfield Railway General 4s of 1955, a sufficient amount of which has been reserveil to retire this issue at maturity. Trustee: Guarantee Tru.st & Safe Depcsit Company, Philadelphia. The Bell's Gap Railroad Company was chartered June 13, 1872. Its road was opened complete in. 1882. The property of the conipan.y was merged with that of the Clearfield & Jefferson Railway Company December 27, 1889, forming the Pennsylvania & Northwestern Railroail Company. The latter, with several other companies, was consolidated into the Cambria & Clearfield Railway Comi)any in 1903, the capital stock of which is almost entirely owned by the Pennsylvania Rail- road Company. These bonds sold in 1902 on a 3.65 basis These bonds were quoted in 1909 4.88 basis (bid) 1910 4.90 1911 4.90 These bonds are considered a legal investment for savings banks in Maine. [ 615 ] CLEARFIELD & JEFFERSON RAILWAY First Mortgage 6s Dated July 8, 1886 Maturing January 1, 1927 Interest payable January 1 and July 1 at the Broad Street Station, Philadelphia. Coupon bonds of $500 and $1,000, registerable as to principal. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 27,000 Security: The above bonds are secured by a first mortgage on the entire railroad of the company, ex- tending from the terminus of the Bell's Gap Railroad at Ivrona to Horatio, Pa., 37.42 miles, together with all lands, buildings, rolling stock, franchises and incomes. These bonds have been ASSUMED by the Cambria & Clearfield Railway Company, having previously been GUARANTEED as to PRINCIPAL and INTEREST by the Bell's Gap Railroad Company. Equity: The .above bonds are prior in lien to the Pennsylvania & Northwestern General 5s of 1930, and to the Cambria & Clearfield General 4s of 1955, a sufiicient amount of which has been reserved to retire this issue at maturity. Trustee: Guarantee Trust & Safe Deposit Company, Philadelphia. The Clearfield & Jefferson Railway Company was organized in February, 1885, to construct an extension from Bell's Gap Railroad to a connection with the Buffalo, Rochester & Pittsburgh Railroad at Punxsutawney, a distance of about 40 miles. The road was completed 16 miles when the stocks and bonds outstanding were taken over by the Bell's Gap Railroad Company's stockliolders, who paid $500 cash for $500 of each issue. The property of the company was merged with the prop- erty of the Bell's Gap Railroad Company December 27, 1889, forming the Pennsylvania & North- western Railroad Company. The latter, with several other companies, was consolidated into the Cambria & Clearfield Railway in 1903, the capital stock of which is almost entirely owned by the Pennsylvania Railroad Company. These bonds sold in 1906 on a 4.20 basis 1908 4.75 1909 4.60 (bid) 1910 4.55 (bid) 1911 4.55 (bid) December, 1912 4.()0 (bid) These bonds are considered a legal investment for savings banks in Maine. L 010 1 CAMBRIA & CLEARFIELD RAILWAY General Mortgage Sinking Fund 4s Dated February 1, 1905 Maturing February 1, 1955 Interest payable February 1 and August 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000. Authorized $7,500,000 Outstanding $1,255,000 Per mile . . 3,150 Provisions of Of the total amount authorized, $1,255,000 are outstanding as above. $3,445,000 have been issue: reserved to retire underlying liens, and $2,800,000 have been reserved for general corporate purposes. Security: The above bonds are secured by a direct mortgage on 398.86 miles of road, together with branches and extensions, buildings, depots, rolling stock, and all other estate, real or personal, belonging to the company. The bonds are secured by a first mortgage on 220.13 miles in- cluding the lines from Vail to Grampian, from Cresson to Ivrona, and from Ebensburg to Black Lick; by a second mortgage on 117.19 miles covered by the first mortgages of the Cambria & Clearfield Railroad First 5s of 1941, and the Pennsylvania & Northwestern Rail- road General 5s of 1930; and by a third mortgage on 61.54 miles covered by the first mortgages of the Bell's Gap Railroad Consolidated 6s of 1913 and the Clearfield & Jcfter.son First 6s of 1927. Sinking fund: Commencing February 1, 1906, and annually thereafter, the company shall appropriate a sum sufficient to purchase at par, and cancel, 1% of the bonds outstanding and also appro- priate a sum equal to the interest on the bonds thus cancelled. If bonds are not purchased, the proceeds of the sinking fund at the time shall revert to the treasury of the company. Trustee: Commercial Trust Company, Philadelphia. The Cambria & Clearfield Railway Company was formed June 25, 1903, as a consolidation of the Pemisylvania & Northwestern Railroad, the Millersburg Railroad, the Cambria & Clearfield Railroad, the Cresson & Ivrona Railroad, the Ebensburg & Black Lick Railroad, the Tyrone & Clearfield Railway Companies. Of its $4,835,912 capital stock, the Pennsylvania Railroad Company owns $4,833,850. JOHNSONBURG RAILROAD First Mortgage 6s Dated January 16, 1889 Maturing March 1, 1929 Interest payable March 1 and September 1 at Guarantee Trust & Safe Deposit Company, Philadelphia. Coupon bonds of $1,000, registerable as to principal. xiuthorized $200,000 Outstanding $200,000 Per mile . . 10,000 Securit}': The above bonds are secured by a first mortgage on the entire line of the company, extend- ing from Johnsonburg to Clermont, Pa., 19.65 miles, including all depots, and other property, [ 617 ] both real and personal, now owned or hereafter acquired, also all franchises, incomes and profits. Trustee: Guarantee Trust & Safe Deposit Company, Philadelphia. The Johnsonburg Railroad Company was chartered March 14, 1887, and its road was opened for traffic the following year. It was leased to the Pennsylvania Railroad Company for 50 years from July 8, 1889, at a rental equal to net earnings of the property, after operating expenses, taxes and interest had been paid. The property of the company is operated as an integral part of the Pennsylvania Railroad Company System. The latter company owns $150,000 each of its capital stock and funded debt. These bond.s are considered a legal investment for savings banks in Maine. UNITED NEW JERSEY RAILROAD & CANAL COMPANY General Mortgage 4s and sHs. Mortgage dated April 20, 1871 (i) General 4s Dated 188:5 Maturing February 1. 192.S Interest payable February 1 and August 1 at Comj)any's office, Philadel])hia. Registered bonds of $1,000. Listed on Philadel])hia Stock Exchange Ouistanding $1,8(^4,000 (2) General 4s Dated 188!) Maturing September 1, 1929 Interest payable ]March 1 and September 1 at Comi)any"s office, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Outstanding $fi,020,000 (3) General 4s Dated 1894 Maturing March 1, 1944 Interest i)ayable March 1 and September 1 at National Bank of Commerce, New York, and Company's office, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Listed on New York and Philadelphia Stock Exchanges Outstanding $.5,646,000 (4) General i^s Dated 1901 Maturing March 1, 1951 Interest payable March 1 and Se])tember 1 at the National Bank of Commerce, New York, and at the Company's office, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Outstanding $.5,669,000 I «1H I (5) General 4s Dated 1908 Maturing September 1, 1948 Interest payable March 1 and September 1 at the Company's office, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Outstanding $841,000 Total authorization $'20,000,000 Outstanding $120,000,000 Per mile . . 137,000 Security : The above bonds are a direct obligation of the company, and are secured by a first mortgage on the Delaware & Raritan Canal, connecting the Delaware and Raritan Rivers with ap- purtenances thereof and franchises (66 miles). They are further secured by a first mortgage on the company's road from Camden to South Amboy, N. J., from Trenton to Jersey City and branches, totalling 146.02 miles, together with terminal property at Jersey City, also buildings, rolling stock now owned or hereafter acquired, and franchises. The lien does not include the "Harsimus Cove property" and the branch road thereto and property at Hobo- ken and lands not used for canal or railroad purposes. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsyl- vania Railroad Company under the terms of its lease. Trustee: Fidelity Trust Company, Philadelphia. The United New Jersey Railroad & Canal Company was organized in 1872 as a consolidation of the Delaware & Raritan Canal Company, the Camden & Amboy Railroad & Transportation Com- pany and the New Jersey Railroad & Transportation Company. It was leased in May, 1871, to the Pennsylvania Railroad Company for 999 years at a rental of 10% on the total share capital and interest on all outstanding debts. The lessees took possession of the properties December 1, 1871, and have since operated them. The General 4s of 1923 sold in 1906 on a 3.85 basis 1907 3.85 1908 3.77 1909 3.80 (bid) 1910 3.80 to 4.00 1911 4.00 (bid) :, 1912 4.10 (bid) The General 4s of 1929 were quoted in 1909 on a 3.85 basis (bid) 1910 3.95 1911 3.95 December, 1912 4.05 The General 4s of 1944 .sold in 1904 on a 3.50 basis 1909 3.80 (bid) 1910 3.77 to 3.85 1911 3.90 December, 1912 4.05 (bid) The General 3j^s of 1951 were quoted December, 1912, on a 4.12 basis (bid). These bonds are considered a legal investment for savings banks in New England. L 619 J PHILADELPHIA, GERMANTOWN & CHESTNUT HILL RAILROAD First Mortgage 4J^s Dated May 1, 1883 Maturing May 1, 1913 Interest payable May 1 and November 1 at the Broad Street Station, Philadelphia. Registered bonds of $1,000. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 77,000 Security: The above bonds are secured by a first mortgage on 13.16 miles of the company's road from Germantown Junction to Chestnut Hill and Fort Hill, Pa., together with lands, buildings, rolling stock, franchises and all incomes. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Penn- sylvania Railroad Company under the terms of its lease, and have been ASSUMED by the Connecting Railway Company. Sinking fund : Each year the company agrees to set aside from net earnings an amount sufficient to pur- chase $10,000 of these bonds at not exceeding par. If bonds are not purchasable at that price, the sum is returned to the treasury and added to the amount to be paid in any subse- quent year. Equity: The above bonds are prior in lien to the Connecting Railway First Mortgage 4s of 1951, a sufficient amount of which has been reserved to retire this issue at maturity. The Philadelphia, Germantown & Chestnut Hill Railroad was projected in 1882. It was leased from May 1, 1883, for 30 years to the Pennsylvania Railroad Company at a rental equal to 4i}/2% interest on the above bonds. On January 1, 1902, this road, with others, was consolidated into the Connecting Railway Company, which is leased to the Pennsylvania Railroad Company. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. CONNECTING RAILWAY COMPANY First Mortgage 4s Dated June 21, 1911 Maturing March 15, 1951 Interest payable March 15 and September 15 at Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $15,000,000 Outstandmg $2,079,000 Per mile . . 57,000 Provisions of Of the $15,000,000 authorized, $1,000,000 are reserved to provide for the retirement of the issue: Philadelphia, Germantown & Chestnut Hill 4^8 of 1913, $11,921,000 are reserved for ex- tensions, etc., and $2,079,000 are in the hands of the public, as above. [ (520 ] Security: The above bonds are secured by a direct mortgage on 35.98 miles of the company's road, also on branches, extensions, sidings, future acquisitions, franchises, incomes and profits. They are secured by a first mortgage on 22.82 miles, including the line from a point near Frankford Junction to Girard Avenue, West Philadelphia. They are secured by a second mortgage on the 13.16 miles covered by the first lien of the Philadelphia, Germantown & Chestnut Hill First 4s of 1913. The bonds are GUARANTEED as to INTEREST by the Pennsylvania Railroad Company. Trustee: Girard Trust Company, Philadelphia. The Connecting Railway Company was chartered April 4, 1863, and its road was opened for traffic January 1, 1868. It was leased to the Philadelphia & Trenton Railroad Company, which, in turn, is leased for 999 years to the Pennsylvania Railroad Company. The latter owns the entire outstanding stock of the Connecting Railway Company. BELVIDERE DELAWARE RAILROAD Consolidated Mortgage Sinking Fund 4s and sHs Mortgage dated December i, 1875 (i) Consolidated 4s Dated 1885 Maturing September 1, 1925 Interest payable March 1 and September 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Outstanding $500,000 (2) Consolidated 4s Dated 1887 Maturing February 1, 1927 Interest payable February 1 and August 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Listed on the Philadelphia Stock Exchange Outstanding $749,000 (3) Consolidated 4s Dated 1893 Maturing January 1, 1933 Interest payable January 1 and July 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000. Registered bonds of $1,000. Outstanding $416,000 [ 6^21 ] (4) Consolidated 3>^s Dated 1903 Maturing January 1, 1943 Interest payable January 1 and July 1 at Broad Street Station, Philadelphia, and Bank of Commerce, New York. Coupon bonds of $1,000, registerable as to principal. Listed on the New York and Philadelphia Stock Exchanges Outstanding $97'-2,00() Authorized $4,000,000 Outstanding $-2,637,000 Per mile . . 32,500 Security: The above bonds are secured by a first mortgage on the entire road of the company, total- ling 81.06 miles, including the line from Trenton to Manunka Chunk, together with all build- ings, lands, between the said termini, franchises, rolling stock and all incomes. All the bonds of this issue, except the Consolidated 4s of 1933, have been GUARANTEED as to PRINCIPAL and INTEREST by the United New Jersey Railroad & Canal Company, by endorsement. The Pennsylvania Railroad Company has ASSUMED this guarantee. Sinking fund: Beginning January 1, 1880, the company agrees to set aside out of net earnings an amount equal to 1% of all the bonds outstanding, to be applied annually to the purchase of these bonds at not exceeding 105. If in any year net earnings shall not equal 1% of the principal, the whole earnings shall be appropriated to the fund. If bonds cannot be purchased at 105, the fund may be invested in other lawful securities. Trustee: Commercial Trust Company, Philadelphia. The Belvidere Delaware Railroad Company was chartered March 2, 1835, and its road was completed on November 5, 1855. It was leased to the United New Jersey Railroad & Canal Company and operated as the Belvidere Division of the same until March 7, 1876, when the lease was assigned to the Pennsylvania Railroad Company. The lease will terminate in 2870. The capital stock of the Belvidere Delaware Railroad Company is entirely OAvned by the Pennsylvania Railroad and the United New Jersey Railroad & Canal Company. The CJonsolidated 4s of 1925 were quoted in 1909 on a 3.90 basis (bid). The ("onsolidated 4s of 1927 were offered in December, 1912, on a 4.27 })asis ())id). The Consolidated 4s of 1933 were quoted in 1909 on a 3.95 basis (bid). The Consolidated 3J^s of 1943 were sold in 1909 on a 3.90 basis were quoted in 1910 3.95 (bid) 1911 4.12 December, 1912 4.22 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecticut and Rhode Island. [ 622 ] DELAWARE RIVER RAILROAD & BRIDGE COMPANY First Mortgage Sinking Fund 4s Dated August 1, 189(5 Maturing August 1, 1936 Interest payable February 1 and August 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $1,300,000 Outstanding $1,293,000 Per mile . . 129,300 Security: The above bonds are secured by a first mortgage on the company's road from a junction of the Connecting Railway and Frankford Avenue, Philadelphia, to Haddenfield, a connection with the Camden & Burlington County Railroad, 9.52 miles, together with lands, depots, rolling stock now owned or hereafter acquired, franchises, income and profits. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Penn- sylvania Railroad Company by endorsement. Sinking fund: Beginning August 1, 1897, and annually thereafter, the company will set aside from net earnings an amount equal to 1% of the bonds outstanding, and apply the same to the purchase of these bonds at par and interest, and also, an additional sum, to be applied in like manner equal to the interest upon the bonds so purchased. If the bonds are not purchasable at par, the sum so appropriated shall be returned to the treasury of the company free from the obli- gations of the trust. Trustee : Girard Trust Company, Philadelphia. The Delaware River Railroad & Bridge Company was chartered March 17, 1896, and its road was opened for traffic April 19, 1896. The company is a consolidation of the Pennsylvania & New Jersey Railroad of Pennsylvania, and the Pennsylvania & New Jersey Railroad of New Jersey. It is operated and owned by the Pennsylvania Railroad Company. These bonds were quoted in 1909 on a 4.12 basis (bid) 1910 4.65 1911 3.98 December, 1912 4.05 These bonds arc considered a legal investment for savings banks in New England except in Vermont. [ 623 ] WESTERN NEW YORK & PENNSYLVANIA RAILWAY First Mortgage 5s Dated December 1, 1887 Maturing January 1, 1937 Interest payable January 1 and July 1 at New York Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $10,000,000 Outstanding $9,990,000 Per mile . . 21,400 Security: The above bonds are secured by a first mortgage, or a first collateral trust, on 466.73 miles of road, and terminal properties, also on lands, depots, equipment now owned or hereafter acquired, franchises, incomes, and profits of the company. They are secured by a first mortgage on 464.41 miles of road, including the lines from Oil City, Pa., to Buffalo, N. Y., from Buffalo to Emporium Junction, Pa., from Olean, N. Y., to Warren, Pa., and from Irvineton to Oil City, Pa.; and by a first collateral trust on terminal property in Buffalo, also a lien on the rights and interests of the company in the franchises and properties of its subsidiaries. Equity : These bonds are prior in lien to the company's General Mortgage 4s of 1943 and Income Mort- gage 5s of 1943. Trustee: Bankers' Trust Company, New York. The Western New York & Pennsylvania Railway Company was incorporated March 18, 1895, as a reorganization of the Western New York & Pennsylvania Railroad Company. On August 1, 1900, the Pennsylvania Railroad Company leased its property for one year. This was extended to 20 years from August 1, 1903, at a rental equal to the net earnings of the company. Almost the entire capital stock of the company is owned by the Pennsylvania Railroad Company. These bonds were quoted in December, 1912, on a 4.55 basis (bid). WESTERN NEW YORK & PENNSYLVANIA RAILWAY General Mortgage 4s Dated Aj)ril 1, 1895 Maturing April 1, 1943 Interest payable April 1 and October 1 at New York Trust Company, New York. Coupon bonds of $1,000, registerable as to princijial. Authorized $10,000,000 Outstanding $10,000,000 Per mile . . 20,500 Security: The above bonds are secured by a direct mortgage, or by collateral trust on 487.49 miles of road, together with lands, depots, rolling stock, franchises, incomes, etc. They are secured by a first mortgage on 20.76 miles of road; by a second mortgage on 464.41 miles covered by the first lien of the First Mortgage 5s of 1937; in effect a second mortgage on the terminal [ (524 ] property in Buffalo covered by the First Collateral Trust of the First Mortgage 5s of 1937 (which see) ; also a second mortgage on the rights and interests of the company in the franchises and properties of its subsidiaries. Equity: These bonds are prior in lien to the company's Income Mortgage .5s of 1943. Trustee: Union Trust Company, New York. For history, see page 624. These bonds were quoted December, 1912, on a 4.85 basis (asked). WESTERN NEW YORK & PENNSYLVANIA RAILWAY Income Mortgage 5s Dated April 1, 1805 Maturing April 1, 1943 Interest payable November 1, when earned, at Fidelity Trust Company, Philadelphia. Interest is non-cumulative. Coupon bonds of $1,000, registerable as to principal. Authorized .$10,000,000 Outstanding $10,000,000 Per mile . . 2''2,C00 Provisions of Of the $10,000,000 outstanding, $9,165,139 are owned by the Pennsylvania Railroad Corn- issue: pany, $439, 8G1 are held by the public, and $395,000 are held in the treasury of the company. Security: The above bonds are secured by a direct mortgage or by collateral trust on 442.51 miles of road, including lands, interest, equipment and future acquisitions. They are secured on the property of the company subject to the First Mortgage 5s of 1937 and the General Mortgage 4s of 1943. The indenture provides that interest shall be paid not exceeding 5% from net earnings for each year after deducting operating expenses, taxes and all other interest. Trustee: Fidelity Trust Company, Philadelphia. For history, see jiage 624. These bonds were quoted December, 1912, at 30 (bid). BOND DESCRIPTIONS OF CONTROLLED ROADS Following are descriptions of bond issues of companies operated independently but controlled through stock ownership by the Pennsylvania Railroad Company : [ 625 ] WEST JERSEY & SEASHORE RAILROAD First Consolidated Mortgage Sinking Fund 3 Ms and 4s Dated July 1, 1896 Maturing July 1, 1936 Interest payable January 1 and July 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $7,000,000 Outstanding in series "A' '4s ; $1,599,000 "B' ' 33/^s 1,329,000 "C 'm^ 909,000 "D' " 4s 1,017,000 "E' '4s 685,000 "F' '4s 999,000 Provisions of Security : Sinking fund : Trustee: Total per mile $19,600 Of the total amount authorized, $6,538,000 are outstanding as above, $372,000 have been retired by the sinking fund, and $90,000 have been reserved to retire prior liens. The above bonds are secured by a direct mortgage on 386.72 miles of the company's road, together with branches and extensions, lands, buildings, franchises and incomes. They are secured by a first mortgage on 325.52 miles, including the lines from Camden to Atlantic City and Cape May; and by a second mortgage on 11.2 miles covered by the first lien of the Woodstown & Swedesboro First Mortgage 6s of 1912. Beginning July 1, 1897, and annually thereafter, the company will appropriate from its net earnings a sum equal to 1% of the outstanding bonds and apply the same to their purchase at par and interest, bonds so purchased to be cancelled and retained by the trustee. An additional sum, equal to the interest on the bonds, will be a])plied in the same manner. If bonds are not purchasable at par, the sum thus appropriated shall revert to the treasury of the company. Commonwealth Title, Insurance & Trust Company, Philadelphia. The West Jersey & Seashore Railway Company was incorporated under the laws of New Jersey on May 4, 1896, as a consolidation of the West Jersey Railroad Company and its subsidiaries. In May, 1900, the company absorbed the property of the Delaware River Railway Company. A majority of the capital stock, both common and preferred, is owned by the Pennsylvania Rail- road Company, also the United New Jersey Railroad and Canal Company holds an interest in the common stock of this company. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ f)'-2r> NORTHERN CENTRAL RAILWAY Consolidated General Mortgage 4US. Series "E" Dated May 26, 1874 IVIaturing April 1, 1925 Interest payable April 1 and October 1 at the Treasurer's office, Baltimore. Coupon bonds of $1,000. Authorized $10,000,000 Outstanding $1,757,000 Series "E" Per mile . . 12,200 Security: The above bonds are secured by a second mortgage on 144.45 miles of the company's road, including the line from Baltimore to Sunbury, Pa., together with equipment, rolling stock, leaseholds, franchises, lands and buildings, subject to the first lien of the Northern Central Irredeemable 6s, owned by the State of Maryland. Equity: These bonds are prior in lien to the company's Second General Mortgage Currency 5s of 1926. Trustee: Fidelity Trust Company, Philadelphia. The Northern Central Railway Company was organized December 9, 1854, as a consolidation of the Baltimore & Susquehanna Railroad, the York & Maryland Line Railroad, the York & Cum- berland Railroad and the Susquehanna Railroad Companies. A controlling interest in the capital stock of this company is owned by the Pennsylvania Railroad Company. The latter's proposal to lease the property of this company at a rental of 8% on the stock and providing for a 40% increase on said stock was approved in April, 1911, by the Public Service Commission of Maryland. This lease will not become effective imtil two suits presented by the minority stockliolders against the proposition have been settled. These bonds sold in 1902 on a 3.50 to 3.70 basis 1904 3.65 3.85 1905 3.60 3.75 1906 3.85 3.90 1907 3.85 4.20 1908 3.80 4.05 1909 4.00 1910 3.85 4.05 1911 4.10 (bid) T, 1912 4.30 (bid) These bonds are considered a legal investment for savings banks in New Hanii)shire and Rhode Island. [ (527 ] NORTHERN CENTRAL RAILWAY Second General Mortgage 5s Dated January 1, 1876 Maturing January 1, ID^e Interest payable January 1 and July 1 at the Treasurer's office, Baltimore. Coupon bonds of $1,000. Authorized $5,000,000 Outstanding "Series A" $2,56.5,000 "Series B" 1,000,000 Per mile 24,750 Security: The above bonds are secured by a third mortgage on 144.45 miles of the company's road, subject to the Northern Central Irredeemable 6s belonging to the State of Maryland and the Consolidated General Mortgage 4j/^s of 1925 (which see). Sinking fund: For "Series A" the company agreed in 1880 and annually thereafter to apply $30,000 to the purchase and redemption of those bonds. No bonds of "Series A" have been redeemed by the sinking fund, however, since 1894. Trustee: Fidelity Trust Company, Philadelphia. For history, see page 627. "Series A" of this issue sold in 1902 on a 3.45 to 3.57 basis 1903 3.65 1904 3.77 1905 3.60 3.65 1906 3.70 3.85 1907 3.85 3.95 1908 4.12 4.15 1909 3.95 1910 4.12 4.20 1911 4.10 (bid) December, 1912 4.25 1 (bid) "Series B" of this issue sold in 1902 on a 3.40 to 3.45 basis 1903 3.67 1904 3.67 1905 3.60 3.67 1906 3.80 1908 4.15 4.35 1909 4.15 1910 4.00 4.12 1911 4.10 (bid) December, 1912 4.25 (bid) These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ C.IH 1 ELMIRA & WILLIAMSPORT RAILROAD First Mortgage 4s Dated May 11, 1860 Maturing January 1, 1950 Interest payable January 1 and July 1 at Broad Street Station, Philadelphia. Registered bonds of $1,000. Authorized $1,000,000 Outstanding $063,000 Per mile . . 13,200 These bonds were extended January 1, 1880, and January 1, 1010, interest being reduced from 7% and from 6% respectively. Security: The above bonds are secured by a first mortgage on the company's road from Williarasport, Pa., to Elmira, N. Y., 73.49 miles, together with lands, buildings, equipment and future acquisitions. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the North- ern Central Railway Company under the terms of its lease. Convertibility: These bonds are convertible into the common stock of the company at any time. The Elmira & Williamsport Railroad was leased in 1863 to the Northern Central Railway Com- pany for 999 years, at an annual rental equal to the interest on outstanding bonds, taxes, operating expenses and dividends on stock. The Northern Central Railway Company is controlled by the Pennsylvania Railroad Company through ownership of practically its entire capital stock. The latter has guaranteed all payments under the lease. These bonds sold in 1902 on a 3.35 basis 1903 3.70 to 4.50 basis 1904 4.00 4.50 1905 4.30 1906 4.10 4.80 1907 6.00 1908 3.65 5.87 1909 4.60 4.95 1910 4.00 1911 4.02 December, 1912 4.05 (bid) These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 629 ] ELMIRA & WILLIAMSPORT RAILROAD Income 5s Dated May 1, 1863 Maturing October 1, aSG'-i Interest payable April 1 and October 1 at Broad Street Station, Philadelphia. Coupon bonds of $500. Authorized $570,000 Outstanding $570,000 Security : The above bonds are a direct obligation of the Elmira & Williamsport Railroad Company, but are not secured by a mortgage. It is stated on the face of the bonds, however, that pay- ments thereunder are GUARANTEED by the Pennsylvania Railroad Company. For history, see page 629. SODUS BAY & SOUTHERN RAILROAD First Mortgage 5s Dated July 1, 1884 Maturing July 1, 1924 Interest payable January 1 and July 1 at National Bank of Commerce, New York. Coupon bonds of $1,000. Authorized $500,000 Outstanding $500,000 Per mile . . 14,700 Security: The above bonds are secured by a first mortgage on the company's road from Sodus Point to Stanley, N. Y., 34.06 miles, together with lands, buildings, equipment, franchises now owned or hereafter acquired and all incomes. These bonds have been ASSUMED by the Elmira & Lake Ontario Railroad Company. Trustee: Union Trust Company, New York. The Sodus Bay & Southern Railroad Company was organized on March 19, 1862, as the Sodus Point & Southern Railroad Company. Its road was opened for traffic July 4, 1872. The company was reorganized after foreclosure as the Ontario Southern Railway in June, 1875, and in 1879 took the title of the Lake Ontario & Southern Railroad Company. After a second reorganization in Sep- tember, 1882, its title was again changed to the present one. In 1886 the company was consolidated into the Elmira & Lake Ontario Railroad Company. The entire capital stock of the latter is owned, and the property is operated by the Northern Central Railway Company, which is controlled by the Pennsylvania Railroad Company. These bonds sold in 1903 on a 4.85 basis 1909 5.00 (bid) 1910 5.00 (bid) 1912 5.05 1 (VM ] BALTIMORE, CHESAPEAKE & ATLANTIC RAILWAY First Mortgage 5s Dated September 1, 1894 Maturing September 1, 1934 Interest payable March 1 and September 1 at Broad Street Station, Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $1,250,000 Outstanding $1,250,000 Per mile . . 14,200 Security : The above bonds are secured by a first mortgage on the company's entire road, 87.66 miles, extending from Claiborne to Ocean City, Md., together with all buildings, equipment, steam- boats, docks, terminal properties, franchises, incomes and profits. Trustee: Metropolitan Trust Company, New York. The Baltimore, Chesapeake & Atlantic Railway Company was organized under the laws of Maryland, September 1, 1894, as the successor to the Baltimore & Eastern Shore Railroad, the Eastern Shore Steamboat Company, the Maryland Steamboat Company and the Choptank Steam- boat Company. It is controlled by the Pennsylvania Railroad Company and subsidiaries through ownership of practically all the capital stock. These bonds were quoted in December, 1912, on a 5.00 basis (bid) They are considered a legal investment for savings banks in Maine. MARYLAND, DELAWARE & VIRGINIA RAILWAY First Mortgage 5s Dated February 1, 1905 Maturing February 1, 1955 Interest payable February 1 and August 1 at Treasurer's office, Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Outstanding $2,000,000 Per mile . . 25,650 Security: The above bonds are secured by a first mortgage on the company's entire road, 78.33 miles, together with buildings, equipment, personal and real estate belonging to said railroad and branches, all steamboats, fourteen in number, docks, piers and terminal i)roperties of the company wherever situated, also franchises, incomes and profits thereof. These bonds have been GUARANTEED as to PRINCIPAL and EVTEREST by the Balti- more, Chesapeake & Atlantic Railway Company by endorsement. Trustee: Girard Trust Company, Philadelphia. The Maryland, Delaware & Virginia Railroad Company was chartered as the Queen Anne's Railroad Company under the laws of Maryland in 1894, and in Delaware in 1895. Its road was [ 631 ] opened for traffic March 1, 1898. The property was placed in the hands of a receiver February, 1904, was reorganized in January, 1905, and began operations February 1, 1905, under its present title. It is controlled by the Baltimore, Chesapeake & Atlantic Railway Company through the ownership of a majority' of its capital stock. The latter, in turn, is owned by the Pennsylvania Railroad Company and subsidiaries through ownership of a majority of its capital stock. NEW YORK, PHILADELPHIA & NORFOLK RAILROAD First Mortgage 4s Dated February 1, 1899 Maturing January 1, 1939 Interest payable January 1 and July 1 at 26 South 15th Street, Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $3,000,000 Outstanding $2,600,000 Per mile . . 23,200 Provisions of Of the $3,000,000 bonds authorized, $400,000 are reserved for betterments, and $2,600,000 issue: are in the hands of the public, as above. Security: The bonds are secured by a first mortgage on 112 miles of road, including the line from Del- mar, Del., to Cape Charles, Va., and a branch to Cristfield, Md., together with all property, real or personal, now owned and future acquisitions, for use in connection with the railroad, depots, equipment, rolling stock, all other railroads hereafter constructed, purchased or merged, tugs, barges, etc. Equity: These bonds are prior in lien to the company's Income Mortgage 4s of 1939 (see following). Trustee: Fidelity Trust Company, Philadelphia. The New York, Philadelphia & Norfolk Railroad Company was chartered under the laws of Virginia September 27, 1881, as the successor to the Peninsular Railroad Company of Virginia. It was reorganized without foreclosure or change of name on January 24, 1899. It is controlled by the Pennsylvania Railroad Company through ownership of $2,492,750 of the capital stock, acquired by exchanging the same for 4% Forty-year Pennsylvania Railroad Trust Certificates at the rate of $1,000 in stock for $3,000 in certificates. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. 1 (>:;2 NEW YORK, PHILADELPHIA & NORFOLK RAILROAD Income Mortgage 4s Dated February 1, 1899 Maturing January 1, 1939 Interest payable May 1 and Noveniljer 1 as declared by directors from net earnings. Interest is non-cumulative. Registered bonds of $1,000. Authorized $1,000,000 Outstanding $1,000,000 Per mile . . 8,925 Security: The above bonds are a direct obligation of the New York, Philadelphia & Norfolk Railroad Company. They are secured by a second mortgage on the property covered by the first lien of the company's First Mortgage 4s of 1939 (which see). Trustee : Fidelity Trust Company, Philadelphia. The above bonds are considered a legal investment for savings banks in New Hampshire. GIRARD POINT STORAGE COMPANY First Mortgage 3I2S Dated April 1, 1890 Maturing April 1, 1940 Interest payable Ajiril 1 and October 1 at Treasurer's office, Philadelphia. Registered bonds of $1,000. Authorized $-2,500,000 Outstanding $2,043,000 Security: The above bonds are secured by a first mortgage on real estate at Girard Point and Point Breese, aggregating about 105 acres; together with present and future improvements and structures thereon, also franchises, incomes, etc. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Railroad Company by endorsement. Sinking fund: The company agrees to set aside annually $20,000 to the purchase and cancellation of these bonds at not exceeding par and interest. If bonds are not purchasable at this price, the fund for the year reverts to the company. Trustee: Fidelity Trust Company, Philadelphia. The entire capital stock of the Girard Point Storage Company is owned by the Pennsylvania Railroad Company. [ 633 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Pennsylvania Company, together with the bases upon which they have sold during the decade ending December 31, 1912. Most of these issues have been guaranteed by the Pennsylvania Railroad Company, which owns the entire capital stock of the Pennsylvania Company. PENNSYLVANIA COMPANY First Mortgage 4l^s Dated April 1, 1881 Maturing July 1, 1921 Interest payable January 1 and July 1 at National City Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $20,000,000 Outstanding $19,467,000 Provisions of Of the total amount authorized, $19,467,000 are outstanding as above, and the balance, issue: $533,000, has been retired by the sinking fund. Security : The above bonds are secured by a first mortgage on all the rights and interest of the company in the leases of the Pittsburgh, Fort Wayne & Chicago Railway for 999 years from 1869, the Cleveland & Pittsburgh Railroad for 999 years from 1871, the Erie & Pittsburgh Railroad for 999 years from 1870, and those of the New Castle & Beaver Valley Railroad and the Lawrence Railroad, both of which were consolidated into the Pittsburgh, Youngstown & Ashtabula Railroad. They are further secured by a first mortgage upon real estate of the company in Pittsburg, Allegheny and Chicago; also on stocks and bonds deposited with the trustees of a par value of about $25,000,000. These bonds have been GUARANTEED as to PRINCIPAL, ING FUND by the Pennsylvania Railroad Company. INTEREST and SINK- Sinking fund: An annual sinking fund equal to 1% of the bonds outstanding is to be applied to their purchase at par and interest, bonds so purchased to be held alive in the sinking fund. If, in any year, bonds are not purchasable at or under par, the amount set aside in that year shall revert to the treasury of the company. Trustee : The trustees of this issue at present named are W. N. P. Shortridge, Esq. H. Barnes, Esq., John P. Green, Esq., and The Pennsylvania Railroad Company owns the entire $80,000,000 capital stock of the Penn- sylvania Company. The latter was chartered by the legislature of Pennsylvania April 7, 1870, for the purpose of managing, in the interest of the Pennsylvania Railroad Company, the railroads leased and controlled by that company west of Pittsburg. The Pennsylvania Company was or- ganized April 1, 1871. These bonds were sold in 1902 on a 3.52 to 3.80 basis 1903 3.65 3.90 1904 3.55 3.85 1905 3.57 3.80 1906 3.72 4.10 1907 3.85 4.50 1908 3.85 4.20 1909 3.75 4.05 1910 3.80 4.15 1911 3.95 4.15 1912 3.95 4.20 They are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island [ (m ] PENNSYLVANIA COMPANY Series "A" Trust Mortgage 3H% Certificates Dated September 1, 1897 Maturing September 1, 1937 Interest i^ayable March 1 and September 1 at Union Trust Conii^any, New York. Registered bonds of $1,000. Authorized $5,000,000 Issued, Series "A" $5,000,000 Outstanding 4,439,000 Provisions of It is provided that the total certificates issued of Series "A," "B" and "C" together shall i.ssue: not exceed $20,000,000. $561,000 of Series "A" have been redeemed by the sinking fund. Security: These certificates are a direct obligation of the Pennsylvania Company, and in case of a de- fault of the latter, the Pennsylvania Railroad agrees to pay principal, interest and sinking fund. They are further secured by a deposit with the trustee of $5,000,000 7% guaranteed special stock of the Pittsburgh, Fort Wayne & Chicago Railway Company. In its indenture the company agrees not to increase the bonded debt of the Pittsburgh, Fort Wayne & Chicago Railway Company beyond its present limit, nor to reduce the dividend below 7% on the stock pledged hereunder, so long as these certificates remain unpaid. Sinking fund: The Pennsylvania Company will pay annually, beginning August 15, 1898, $50,000 to pur- chase these certificates at not exceeding par and interest. If, in any year, certificates are not purchasable at or under par, the sinking fund for that year shall lapse to the treasury of the company. Trustee: Girard Trust Company, Philadeli^hia. For history, see page 63G. These bonds were quoted in 1909 on a 4.15 basis (bid) 1910 4.10 1911 4.25 1912 4.20 to 4.25 They are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ r..s7 ] PENNSYLVANIA COMPANY Series "B" Trust Mortgage 3}^% Certificates Dated February 1, 1901 Maturing February 1, 1941 Interest payable February 1 and August 1 at American Exchange National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $10,000,000 Issued, Series "B" $10,000,000 Outstanding 8,816,000 Provisions of It is provided that the total certificates issued of Series "A," "B" and "C" together shall issue: not exceed $20,000,000. $1,184,000 of Series "B" have been redeemed by the sinking fund. Security: The same as for Series "A" (see page 637). They are secured by a deposit with the trustee of $10,000,000 7% guaranteed special stock of the Pittsburgh, Fort Wayne & Chicago Railway Company. Sinking fund: The same as for Series "A" except that the amount is $100,000 annually. Trustee: Girard Trust Company, Philadelphia. For history, .see page 636. These bonds sold in 1902 on a 3.55 to 3.62 basis 1903 3.65 3.95 1905 3.80 3.85 1906 3.87 4.05 1907 4.40 4.50 1908 3.80 4.27 1909 3.98 4.10 1910 3.98 4.20 1911 4.15 4.20 1912 4.15 4.40 They are considered a legal investment for savings banks in New Hampshire and Rhode Island. PENNSYLVANIA COMPANY Series "C" Trust Mortgage 3}/^% Certificates Dated December 1, 1902 Maturing December 1, 1942 Interest i)ayable June 1 and December 1 at American Exchange National Bank, New York. ('oupon bonds of $1,000, registerable as to principal. Authorized $5,000,000 Issued, Series "C" $5,000,000 Outstanding 4,617,000 Provisions of It is provided that the total certificates issued of Series "A," "B" and "C" together .shall issue: not exceed $20,000,000. $383,000 of Scries "C" have been retired through the sinking fund. [ 638 ] Security: The same as for Series "A" (see page 637). They are secured by a deposit with the trustee of $5,000,000 7% guaranteed special stock of the Pittsburgh, Fort Wayne & Chicago Railway Company. Sinking fund: The same as for Series "A." Trustee: Girard Trust Company, Philadelphia. For history, see page 636. These bonds sold in 1906 on a 4.05 basis 1908 4.15 to 4.40 basis 1909 4.05 4.10 1910 4.05 4.25 1911 4.20 (bid) 1912 4.20 They are considered a legal investment for savings banks in New Hampsliire and Rhode Island. PENNSYLVANIA COMPANY Series "D" Trust Mortgage 3M% Certificates Dated December 1, 1904 Maturing December 1, 1944 Interest payable June 1 and December 1 at New York and Philadelphia. Coupon bonds of $1,000, registerable as to principal. Is.sued $10,000,000 Outstanding $9,552,000 $448,000 of Series "D" have been retired through tiie sinking fund. Security: Same as for Series "A" (see page 637). They are secured by a deposit with the trustee of $10,000,000 7% guaranteed special stock of the Pittsburgh, Fort Wayne & Chicago Railway Company. Sinking fund: Same as for Series "A" except that the amount is $100,000 annually. Trustee: Girard Trust Company, Philadelphia. For history, see page 636. These bonds sold in 1906 on a 3.95 basis 1909 3.98 to 4.02 basis 1910 4.05 (asked) 1911 4.10 4.15 1912 4.20 These bonds are considered a legal investment for savings banks in New Hampshire and Rhode Island. [ 639 ] PENNSYLVANIA COMPANY Series "E" Trust Mortgage 4% Certificates Dated May 1, 1912 Maturing May 1, 1952 Interest payable May 1 and November 1 at Pliiladeli>liia. Coupon bonds of $1,000, registerable as to principal. Issued $10,000,000 Outstanding $10,000,000 Security: The same as for Series "A" (see page 637). They are secured by a deposit with the trustee of $10,000,000 7% guaranteed special stock of the Pittsburgh, Fort Wayne & Chicago Rail- way Company. Sinking fund: The company agrees to provide an annual sinking fund after 1917 of an amount equal to 1% of the certificates outstanding to be ajjplied to their purchase at not exceeding par and interest. Trustee: Girard Trust Company, Philadelphia. For history, see page 636. PENNSYLVANIA COMPANY Collateral Loan 3HS Dated November 1, 1901 Maturing November 1, 1916 Interest payable May 1 and November 1 at New York and Philadelphia. Coupon bonds of $1,000, registerable as to principal. Authorized $20,000,000 Outstanding $5,326,000 Provisions of Of the total amount authorized, $6,060,000 are outstanding as above, and the balance, issue: $14,674,000, has been retired by the sinking fund. Security : The above bonds are a direct obligation of the Pennsylvania Company and are secured by a first collateral lieu on $15,000,000 Pittsburgh, Cincinnati, Chicago & St. Louis preferred stock, $5,000,000 Baltimore & Ohio preferred stock and $5,000,000 Norfolk & Western preferred stock. The indenture provides that the company may withdraw any or all the securities deposited above and substitute securities of an appraised value equal to those withdrawn. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Railroad Company by endorsement. Redemption: The above bonds are redeemable for the sinking fund at i)ar and interest on November 1 of each year upon one month's notice. Sinking fund: The company has provided an annual sinking fund of $1,334,000 to be applied to the pur- chase of these bonds on November 1 of each year at ])ar. Bonds will be drawn by lot. Bonds so pin-chascd are cancelled. The sinking fund will retire all the bonds in 15 payments. [ 640 ] Trustee: Giraid Trust Company, Philadelphia. For history, see page 636. These bonds were quoted in 1909 on a 3.90 basis sold in 1910 3.88 to 4.30 basis. 1911 3.87 4.15 1912 4.00 4.20 They are considered a legal investment for savings banks in New Hampsliire. PENNSYLVANIA COMPANY Collateral Loan 4s Dated April 2, 1906 Maturing April 1, 1031 Interest payable April 1 and October 1 at Girard Trust Company, Philadelpliia. Coupon bonds of $1,000, registerable as to principal. Authorized $20,000,000 Outstanding $20,000,000 Security: Redemption : Trustee: The above bonds are a direct obligation of the Pennsylvania Company, and were secured on February 1, 1912, by a deposit with the trustee of $12,500,000 common and $10,900,000 pre- ferred stocks of the Pittsburgh, Cincinnati, Cliicago & St. Louis Railway Company, $4,000,000 Vandalia Railroad Company stock and $1,000,000 Pittsburgh, Youngstown & Ashtabula Railway Company stock. The indenture provides that the company may withdraw any or all the securities deposited above and substitute therefor securities of an equal appraised value. The company agrees to keep the value (market) equal to 120% of the total par value of the bonds outstanding. The above bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Railroad Company by endorsement. These bonds are redeemable at par and interest on Aju-il 1, 1921, or any interest date there- after upon 90 days' notice. Girard Trust Company, Philadelphia. For history, see page 636. These bonds sold in 1907 on a 4.15 to 5.15 basis 1908 3.98 4.70 1909 4.00 4.15 1910 4.10 4.40 1911 4.10 4.20 1912 4.12 4.30 They are considered a legal investment for savings banks in New Hami)shire and Rhode Island. [ 641 PENNSYLVANIA COMPANY French Franc Loan 3H% Certificates Dated June 15, 1906 Maturing June 15, 1921 Interest payable June 15 and December 15 at Credit Lyonnaise, Paris, France. Bonds of 500 and 2,500 francs. Authorized 250,000,000 francs Outstanding 250,000,000 francs Security: These bonds are a direct obligation of the Pennsylvania Company, and are secured by a deposit with the trustee of marketable securities. They have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsyl- vania Railroad Company by endorsement. Redemption: The above bonds are redeemable at par and interest on or after June 15, 1918. Trustee: Girard Trust Company, Philadelphia. For history, see page 636. These bonds are considered a legal investment for savings banks in New Hampshire. PITTSBURGH, YOUNGSTOWN & ASHTABULA RAILWAY First General Mortgage Series "A" Gold 4s Dated June 1, 1908 Maturing June 1, 1948 Interest payable June 1 and December 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized .$15,000,000 Outstanding $1,965,000 Per mile . . 14,250 Provisions of Of the total amount authorized, $1,965,000 are outstanding as above, $35,000 have been issue: retired by the sinking fund, $1,562,000 have been reserved to retire the company's First Consolidated Mortgage 5s of 1927, and the balance, $11,438,000, has been reserved for improvements, extensions and other lawful purposes. Security: The above bonds are secured by a direct mortgage on 137.54 miles of the company's road, together with buildings, equipment, franchises, incomes and profits. They are secured by a first mortgage on 14.6 miles from Homewood to New Castle, Pa., and by a second mortgage on 122.9 miles covered by the first lien of the company's First Consolidated Mortgage 5s of 1927 (which see). These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Railroad Company, and also by the Pennsylvania Company under the terms of its lease. [ 642 ] Sinking fund: The company provides a sinking fund equal to 1% of the bonds outstanding to purchase and cancel these bonds at not exceeding par and interest. If not purchasable at this price in any year, the fund is to revert to the company. Trustee: Central Trust Company, New York. The Pittsburgh, Youngstown & Ashtabula Railway Company was incorporated January 8, 190(5, under the laws of Ohio and Pennsylvania, as a consolidation of the Pittsburgh, Youngstown & Ash- tabula Railroad and the New Castle & Beaver Valley Railroad Companies. The property of the company is leased for 999 years, from July 1, 1910, to the Pennsylvania Company, at a rental equal to organization expenses, interest on funded debt, and 7% on the preferred and common stocks of the company. The entire capital stock of the Pennsylvania Company is owned by the Pennsylvania Railroad Company. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. PITTSBURGH, YOUNGSTOWN & ASHTABULA RAILROAD First Consolidated Mortgage Currency 5s Dated November 1, 1887 Maturing November 1, 1927 Interest payable May 1 and November 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $4,000,000 Outstanding $1,562,000 Per mile . . 12,700 Provisions of Of the total amount authorized, $1,562,000 are outstanding as above, $638,000 have been issue: cancelled, and the balance, $1,800,000, will not be issued. Security: The above bonds are secured by a first mortgage on the company's road, 122.9 miles, in- cluding the line from Ashtabula Harbor, O., to Kenwood, Pa., 98.7 miles, together with equip- ment, appurtenances and future acquisitions. They have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsyl- vania Company under the terms of its lease. Equity: These bonds are prior in lien to the company's First General Mortgage Gold 4s of 1948, a sufficient number of which have been reserved to retire this issue at maturity. Sinking fund: The company provides an annual sinking fund equal to 1% of the bonds outstanding for their purchase at not exceeding par and interest. Bonds so purchasable are to be cancelled, and if, in any year, they are not procurable at par and interest, the fund shall revert to the treasury of the company. Trustee: Farmers' Loan and Trust Company, New York. The Pittsburgh, Youngstown & Ashtabula Railroad Company was incorporated July "i^l, 1887, as a consolidation of the Ashtabula & Pittsburgh Railway, the Alliance, Niles & Ashtabula Railroad, the Lawrence & New Brighton Railroad Companies. Its property was leased from August 1, 1887, to the Pennsylvania Company. In 1906 it was consolidated with the New Castle & Beaver Valley [ 643 ] Railroad Company, forming the Pittsburgh, Yoimgstown & Ashtabula Railway Company. The latter was leased to the Pennsylvania Company from year to year from January 16, 1906. These bonds sold in 1902 on a 3.75 to 4.25 basis. 1904 3.85 4.05 1905 3.90 1906 3.98 4.05 1909 4.20 1910 4.25 1911 4.35 (bid) December, 1912 4.55 (bid) They ;irc considered ii legal investment for savings banks in Maine, New Hampshire and Rhode Island. ERIE & PITTSBURGH RAILROAD General Mortgage sJ^s Dated July 1, 1890 Maturing July 1, 1910 Interest payable January 1 and July 1 at Union Trust Company, New York. Coupon bonds of $1,000, regislcrable as to principal. Authorized $4,500,000 Outstanding $4,125,000 Ter mile . . 49,700 Provisions of Of the total amount authorized, $4,125,000 are outstanding as above, anil the balance, $375,000, issue: has been retired by the sinking fund. Security: The above bonds are secured by a first mortgage on the company's line from Girard to New Castle, Pa., and branches, totalling 82.97 miles, including water lots in the harbor of Erie, docks, wharf; also all other lands, buildings, rolling stock, now owned or hereafter acquired, together with all franchises, income and profits. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Railroad Company by endorsement. Sinking fund: The company agreed to set apart, beginning July 1, 1891, and amiually thereafter, an amount equal to 1% of the bonds outstanding to purchase the same at not exceeding par and interest. If not so purchasable in any year, the fund is to revert to the treasury of the company. Trustee: Union Trust Company, New York. The Erie & Pittsburgh Railroad Company was chartered April 1, 1858, and its road was opened for traffic in 1865. Its property was leased by the Pennsylvania Railroad Company for 999 years from March 1, 1870, at a rental equivalent to 7% on its stock and the interest on its bonds. This lease was later transferred to the Pennsylvania Company, whose entire capital stock is owned by the Pennsylvania Railroad Company. [ 644 ] These bonds sold in 1904 on a 3.55 basis 1905 3.60 1906 3.70 1907 3.95 1909 3.90 (bid) 1910 4.05 1911 4.05 1912 4.00 Tlicy are considered a legal investment for savings banks in New England except in Vermont. TOLEDO, WALHONDING VALLEY & OHIO RAILROAD First Mortgage 4s and 4I/2S (i) Series "A," 4HS Dated July 1, 1891 Maturing July 1, 1931 Interest payable January 1 and July 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $1,500,000 (2) Series "B," 4J/^s Dated July 1, 1891 Maturing July 1, 1933 Interest payable January 1 and July 1 at Farmers' Loan and Trust (!ompany, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $978,000 (3) Series "C," 4s Dated July 1, 1891 Maturing September 1, 1942 Interest payable March 1 and Sejitember 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $1,401,000 Total authorized $4,000,000 Total outstanding $3,879,000 Per mile .... 16,650 Security: The above bonds are secured by a first mortgage on the company's road, 234.26 miles, in- cluding the lands, buildings, equipment, franchises, incomes, profits and all other property now owned and hereafter acquired. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Penn- sylvania Company by endorsement. Sinking fund: The company provides out of its net earnings annually from October 1, 1892, a sum equal to 1% of the outstanding bonds for their purchase at not exceeding par and interest. If, in any year, bonds are not so purchasable, the fund shall revert to the treasury of the company. [ 645 ] Trustee: Farmers' Loan and Trust Company, New York. The Toledo, Walhonding Valley & Ohio Railroad Company was chartered May 22, 1891, under the laws of Ohio as a consolidation of the Northern Ohio Railway and the Walhonding Valley Railroad Companies. Its property is operated under lease by the Pennsylvania Company at a rental equal to its net earnings. In July, 1911, it was consolidated with the Cleveland & Marietta Rail- way Company into the Toledo, Columbus & Ohio River Railroad Company. The property will continue to be operated by the Pennsylvania Company. Series "A" of 1931 sold in 1907 on a 4.30 to 4.70 basis 1909 4.32 (bid) 1910 4.50 1911 4.40 (bid) 1912 4.30 4.35 Series "C" of 1942 was quoted July, 1912, on a 4.25 basis. These bonds are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. CLEVELAND & PITTSBURGH RAILROAD General Mortgage Sinking Fund 3>^s and 41^3 (i) Series "A," 43/^s Dated December 1, 1891 Maturing January 1, 1942 Interest payable January 1 and July 1 at Winslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $3,000,000 (2) Series "B," 4^8 Dated December 1, 1891 Maturing October 1, 1942 Interest payable April 1 and October 1 at Winslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $1,561,000 (3) Series "B," 31^3 Dated December 1, 1891 Maturing October 1, 1942 Interest payable April 1 and October 1 at Winslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $429,000 [ 646 ] (4) Series "C," s^s Dated December 1, 1891 Maturing November 1, 1948 Interest payable May 1 and November 1 at Winslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $2,788,000 (5) Series "D," sJ^s Dated December 1, 1891 Maturing August 1, 1950 Interest payable February 1 and August 1 at Winslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $1,604,000 Total authorized $10,000,000 Total outstanding $9,382,000 Per mile .... 46,000 Provisions of Of the total amount authorized, $9,382,000 are outstanding as above, and the balance, $618,000, issue: has been retired by the sinking fund. Security: The above bonds are secured by a first mortgage on 205.50 miles of the company's road, including the line between Rochester, Pa., and Cleveland, O., together with terminal property in Allegheny and Pittsburg, docks, buildings, equipment, future acquisitions, franchises, income and profits. These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Railroad Company by endorsement. Sinking fund: The company has provided, beginning January 1, 1893, and annually thereafter, a sinking fund equal to 1% of the bonds outstanding, for their purchase at not exceeding par and in- terest. If, in any year, bonds are not so purchasable, the fund shall revert into tlie treasury of the company. Trustee: Farmers' Loan and Trust Company, New York. The Cleveland & Pittsburgh Railroad Company was chartered in Ohio in March, 1836, and in Pennsylvania in April, 1850. The road was open for traffic in 1852. Its property was leased to the Pennsylvania Railroad Company for 999 years from December 1, 1871. This lease was transferred to the Pennsylvania Company in April, 1873. The rental is 7% on the capital stock, interest on the bonds, sinking fund and $10,000 a year for organization expenses. Series "A" of 1942 sold in 1903 on a 4.05 basis 1909 3.95 1910 4.15 1911 4.05 December, 1912 4.35 Series "B" (43^s) of 1942 sold in 1909 on a 4.00 basis 1910 4.15 1911 4.10 (bid) December, 1912 4.35 Series "C" of 1948 was quoted July, 1912, on a 3.95 basis (bid). [ 647 ] Series "D" of 1950 sold in 1904 ( an a 3.67 basis 1908 4.00 1909 3.75 (bid) 1910 3.92 (bid) 1911 3.95 (bid) December, 1912 4.00 (bid) These bonds are considered a legal investment for savings banks in New England. CLEVELAND & MARIETTA RAILWAY First Mortgage Sinking Fund 4>^s Dated May 1, 1895 Maturing May 1, 1935 Interest payable May 1 and November 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Outstanding $1,250,000 Per mile . . 12,000 The unissued balance of these bonds, $750,000, has been reserved for extensions and equipment. Security: The above bonds are secured by a first mortgage on the company's line from Marietta to Canal Dover, O., 103.68 miles, together with buildings, equipment and future acquisitions. They have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsyl- vania Company by endorsement. Sinking fund: The company agrees to set aside on July 1 in each year a sum equal to 1% of the bonds out- standing to be applied to their piu-chase and cancellation at not exceeding par and interest. If bonds are not so purchasable in any year, the fund shall revert to the treasury of the company. Trustee: Farmers' Loan and Trust Company, New York. The Cleveland & Marietta Railway Company was incorporated in July, 1886. In June, 1911, it was consolidated, with the Toledo, Walhonding Valley & Ohio Railroad Company, into the Toledo, Columbus & Ohio River Railroad Company, which is leased by the Pennsylvania Company. These bonds sold in 1905 on a 3.92 basis 1909 4.38 1910 4.45 (bid) 1911 4.25 (bid) December, 1912 4.38 (bid) They are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. I (i48 ] CINCINNATI, LEBANON & NORTHERN RAILWAY First Mortgage 5s Dated January 2, 1886 Maturing January 2, 1916 Interest payable January 1 and July 1 at Central Trust & Safe Deposit Company, Cincinnati. Coupon bonds of $1,000. Authorized $200,000 Outstanding $200,000 Per mile . . 5,300 Security: The above bonds are secured by a first mortgage on the company's line from Cincinnati to Dodds Station, O., and branch, totalling 37.55 miles, together with lands, buildings, equip- ment and future acquisitions. Equity: These bonds are prior in lien to the Cincinnati, Lebanon & Northern Railway First Con- solidated 4s of 1942, a sufficient number of which have been reserved to provide for the re- turement of this issue at maturity. The Pennsylvania Company owns practically the entire capital stock of the above company. The Pennsylvania Company, in turn, is entirely owned by the Pennsylvania Railroad Company. These bonds were quoted December, 1912, on a 4.70 basis (bid). They are considered a legal investment for savings banks in Maine, and New Hampshire. CINCINNATI, LEBANON & NORTHERN RAILWAY First Consolidated Mortgage 4s Dated November 1, 1902 Maturing November 1, 1942 Interest payable May 1 and November 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $1,500,000 Outstanding $1,230,000 Per mile . . 24,100 Provisions of Of the total amount authorized, $1,255,000 are outstanding as above, $200,000 have been issue: reserved to retire the company's First 5s of 1916, and the balance, $70,000, has been retired by the sinking fund. Security: The above bonds are secured by a direct mortgage on 51.49 miles of the company's road, togetlier with all property pertaining to it. It is secured by a first mortgage on 13.94 miles from Middletown to Middletown Junction, O., and by a second mortgage on the property covered by the first Hen of the company's First 5s of 1916 (which see). These bonds have been GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Company by endorsement. [ 649 ] Sinking fund : Beginning November 1, 1903, and annually thereafter, a sinking fund equal to 1% of the bonds outstanding is provided for their purchase at par and interest. If not so purchasable in anj' year, the fund will revert to the treasury of the company. Trustee : Central Trust & Safe Deposit Company, Cincinnati, 0. For history, see description of the company's First Mortgage 5s of 1916. These bonds sold in 1909 on a 3.95 basis 1910 4.25 December, 1912 4.62 (bid) They are considered a legal investment for savings banks in iNIaine. CLEVELAND, AKRON & COLUMBUS RAILWAY General Mortgage 5s Dated March 1, 1887 Maturing March 1, 1927 Interest payable March 1 and September 1 at Winslow, Lanier & Company, New York. Coupon bonds of $500 and $1,000, registerable as to principal. Authorized $1,800,000 Outstanding $1,800,000 Per mile . . 9,150 Security: The above bonds are secured by a first mortgage on 195.82 miles of the company's road, including the line from Hudson to Columbus, O.; together with lands, buildings, equipment and future acquisitions. These bonds were ASSUMED by the Cleveland, Akron & Cincinnati Railway Company. Equity: These bonds are prior in lien to the company's First Consolidated 4s of 1940, a sufficient number of which has been reserved to retire this issue at maturity. The Cleveland, Akron & Columbus Railway Company was chartered in Ohio in 1886. In 1911 it was consolidated into the Cleveland, Akron & Cincinnati Railway Company, which assumed the above bonds. Almost the entire capital stock of the latter is owned by the Pennsylvania Company, which, in turn, is entirely owned by the Pennsylvania Railroad Company. The.se bonds were quoted in December, 1912, on a 4.55 basis (bid). They are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. [ 650 ] CLEVELAND, AKRON & COLUMBUS RAILWAY First Consolidated Mortgage 4s Dated August 1, 1900 Maturing August 1, 1940 Interest payable February 1 and August 1 at Wiuslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to i)rincipal. Authorized $4,000,000 Outstanding $1,616,000 Per mile . . 8,250 Provisions of Of the total amount authorized, $1,616,000 are outstanding as above, $1,800,000 have been issue: reserved to retire the General 5s of 1927, $184,000 have been retired by the sinking fund, and $400,000 have been reserved for improvements and extensions. Security: The above bonds are secured by a second mortgage on the property covered by the General 5s of 1927 (which see). These bonds were ASSUMED by the Cleveland, Akron & Cincinnati Railway Company. Bonds numbered 778 to 1,800 inclusive are GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Company by endorsement. Sinking fund: Beginning October 1, 1901, and annually thereafter, a sinking fund equal to 1% of the bonds outstanding is provided for their purchase at par and interest. If not so purchasable from year to year, the fund will revert in each instance to the treasury of the company. Trustee: Commercial Trust Company, Philadelphia. For history, see page 650. These bonds were quoted December, 1912, on a 4.70 basis (bid). They are considered a legal investment for savings banks in Maine, New Hampshire and Rhode Island. WHEELING TERMINAL RAILWAY First Mortgage 4s Dated August 1, 1900 Maturing August 1, 1940 Interest payable February 1 and August 1 at Winslow, Lanier & Company, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $2,000,000 Outstanding $1,566,000 Security: The above bonds are secured by a first mortgage on the property of the company, including 9.6 miles of road extending from Martin's Ferry, O., to Benwood, W. Va. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Pennsyl- vania Company by endorsement. [ 651 ] Sinking fund: Beginning October 1, 1901, and annually thereafter, a sinking fund equal to 1% of the bonds outstanding is provided for their purchase at not exceeding par and interest. If not so pur- chasable in any year, the fund will revert to the treasury of the company. Trustee: Commercial Trust Company, Philadelphia. Tlie Wheeling Terminal Railway Company was incorporated in June, 1900, as the successor to the Wheeling Bridge & Terminal Railway Comjiany, whicli had been sold under foreclosure in May, 1900. It owns a bridge at Wheeling, West Virginia, and terminal facilities to connecting rail- roads. Its entire capital stock is owned by the Pennsylvania Company. Tiiese bond.s are considered a legal investment for savings banks in Maine and New Hampshire. CINCINNATI & MUSKINGUM VALLEY RAILROAD First Mortgage 4s Dated August 1, 1898 Maturing August 1, 1948 Interest payable February 1 and August 1 at Farmers' Loan and Trust Company, New York. Coupon bonds of $1,000, reglsterable as to principal. Authorized $2,000,000 Outstanding $1,741,000 Per mile . . 11,750 Provisions of Of the total amount authorized, $1,741,000 are outstanding as above, $9,000 have been issue : retired by the sinking fund and $250,000 have been reserved for future needs. Security: The above bonds are secured by a first mortgage on 148.46 miles of the company's road from Trinway to Morrow, O., including lands, buildings, equipment and futiu-e acquisitions. They have been ASSUMED by the Cleveland, Akron & Cincinnati Railway Company, and are GUARANTEED as to PRINCIPAL and INTEREST by the Pennsylvania Company by endorsement. Sinking fund: Beginning October 1, 1899, and annually thereafter, a sinking fund equal to 1% of the bonds outstanding is provided for their purchase at not exceeding par and interest. If not so pur- chasable in any year, the fund is to revert to the treasury of the company. Trustee: Farmers' Loan and Trust Company, New York. In 1911 the property of the above company was consolidated with the Cleveland, Akron & Columbus Railway Company into the Cleveland, Akron & Cincinnati Railway Company. Practi- cally all the capital stock of the latter is owned by the Pennsylvania Company. These bonds were quoted December, 1912, on a 4.87 basis (bid). They are considered a legal investment for .savings banks in Maine, New Ilaniijshirc, ('(miioclicnl and Rhode Island. [ 652 ] ROCK ISLAND SYSTEM ROCK ISLAND SYSTEM HISTORY The history of the Rock Island System is one of the most complex in railroad annals. It com- prises no less than two holding companies and one operating company, the latter contributing the earnings of all three. The principal holding company of the system is The Rock Island Company, which was organized under the laws of the State of New Jersey on July 31, 1902, "to acquire by pur- chase or otherwise, and to hold as investment, any bonds or other securities, or any shares of capital stock created or issued by corporations or associations in any state or territory, etc." This company took over the entire outstanding stock of the Chicago, Rock Island & Pacific Railroad Company, the second of the two holding companies in the system, having issued in exchange therefor its own outstanding preferred and common stock. The Chicago, Rock Island & Pacific Railroad Company was incorporated in Iowa on the same day that The Rock Island Company was incorporated in New Jersey. It acquired almost the entire capital stock of the Chicago, Rock Island & Pacific Railway Company, which it has always held, and in which from time. to time it has increased its investment. The latter company is the operating comjjany referred to above. The stockholders of the Chicago, Rock Island & Pacific Railway Company were offered in ex- change for each $100 of their stock, $100 in the Chicago, Rock Island & Pacific Railroad Company Four Per Cent Collateral Trust Bonds of 2002 (to be secured by a pledge with the trustee of an equal amount of stock of the Railway), also $70 in the preferred stock and $100 in the common stock of The Rock Island Company (New Jersey). At the close of the Railroad Company's fiscal year ending June 30, 1912, it held in its treasury $71,353,500 stock of the $75,000,000 of the Chicago, Rock Island & Pacific Railway. The early history of this system was, indeed, an ambitious one, and it was evidently the plan of its creators to develop one of the largest, if not the largest system in the United States, by acquir- ing from time to time control in the capital stocks of the railroads which cover the South and West. In 1904 the Railway Company acquired nearly absolute control of the Chicago & Alton Railroad. On the other hand, the Railroad Company was gradually acquiring a control of the St. Louis & San Francisco Railroad, and by 1906 had acquired its entire common stock. The St. Louis & San Francisco Railroad, in turn, controlled at that time majority interests in the Chicago & Eastern Illinois, the Evansville & Terre Haute, and the Evansville & Indianapolis Railroad Companies. All these companies controlled by the Rock Island System operated practically 15,000 miles of rail- road, reaching into seventeen states and territories in the West, with lines extending from Chicago to New Orleans, and westward to Denver, Colorado, and El Paso, Texas, and covering one of the richest sections of the entire country. This attempt to amalgamate the railways of the Southwest proved a very unprofitable venture. The "Rock Island" never received dividends from the "Frisco" stock which it held, and when it was decided to sell its control in the latter company, the sale was carried out at a severe loss. This happened late in 1909, and the control of the St. Louis & San Francisco, carrying with it the con- trol of the other above-mentioned companies, passed back into the hands of B. F. Yoakum and associates. Nor was this the only sale, for in 1908 the Chicago, Rock Island & Pacific Railway turned over [ 655 ] all its extensive holdings in the Chicago & Alton Railroad except 7,700 shares of preferred stock, to the Toledo, St. Louis & Western Railroad Company, receiving therefor that company's Gold Bonds of 1917. The present system has thus reduced itself to The Rock Island Company, with its $150,000,000 capital stock, of which $140,740,282 is outstanding, both common and preferred; the Chicago, Rock Island & Pacific Railroad Company, with a capital stock (entirely owned by the former) of $145,000,000; and the Chicago, Rock Island & Pacific Railway with its* $75,000,000 capital stock, nearly 95% of which is owned by the Railroad Company. The 5% balance of Railway stock, which is not controlled by the Railroad, is held by the public. The Chicago, Rock Island & Pacific Railway Company was incorporated Jime 4, 1880, by the consolidation of the old Chicago, Rock Island & Pacific Railroad and various proprietary companies. Since that time the company has absorbed many small lines, including the Chicago, Kansas & Ne- braska Railway purchased at foreclosure sale in April, 1891, the Gowrie & Northwestern Railway in January, 1901, the Enid & Anadarko Railway in 1902, the St. Louis, Kansas City & Colorado Railroad in 1903, and the St. Louis, Kansas City & Colorado Extension in 1906. On December 31, 1910, the Chicago, Rock Island & El Paso Railway Company owning a line from Bravo, Texas, to Santa Rosa, New Mexico, conveyed its property to the Chicago, Rock Island & Pacific Railway Company, the latter assuming its funded obligations. Owing to certain mortgage provisions, the securities of certain companies whose properties are owned in fee by the Railway Company have to remain alive. Among these are the Burlington, Cedar Rapids & Northern Railway Company, which was deeded to the Railway in 1903, with the guarantee of 6% on its outstanding capital stock; the Tucumcari & Memphis Railway Company, whose entire capital stock is owned by the Chicago, Rock Island & El Paso Railway Company; the Choctaw, Oklahoma & Gulf Railroad Company, which is leased to the Railway Company for 999 years from March 24, 1904; the Rock Island & Peoria Railway Company, which was deeded in 1903 with the 6% guarantee on its outstanding capital stock; the Rock Island, Arkansas & Lou- isiana Railroad ; and the Consolidated Indiana Coal Company, which owns 22,000 acres of coal land in Sullivan County, Indiana, and Dallas County, Jowa. Besides this, the Chicago, Rock Island & Pacific Railway Company has varied interests in other companies. It owns one-half the capital stock of the Peoria Railway Terminal Company, which has acquired all the property of the Peoria & Pekin Terminal Railway. It owns one-fifth of the capital stock of the Iowa Transfer Railway Company, whose yard at Des Moines, Iowa, has been completed and put into operation. It controls a proportion equal to the other proprietary companies in the capital stock of the Chicago LTnion Transfer Company and of the Terminal Railroad Association of St. Louis. The entire cai)ital stocks and funded debt of the Chicago, Rock Island & El Paso Railway Com]iany, and the Cliicago, Rock Island & (iulf Railway Company are owned by the Chicago, Rock Island & Pacific Railroad Company. There are also joint interests which the latter has in the Rock Island-Frisco Terminal Railway, which owns new freight depots and yards in St. Louis. The joint use of these terminals with the Rail- way Company has been gi-anted to the Chicago & Eastern Illinois Railroad. A joint interest in the Memphis Railroad Terminal Company, with nine other companies, is held by the Chicago, Rock Island & Pacific Railway Company. Early in 1911 the Chicago, Rock Island & Pacific Railway Company acquired the control of the St. Paid & Des Moines Railroad Company. This company formerly operated 121 miles of road from Des Moines, to Mason City, Iowa. A company, known as the St. Paul, Kansas City Short Line Railroad Company, was chartered in February, 1911, under the laws of the State of Iowa with an authorized capital stock of $45,000,000 to purchase from the Railway Company all the outstanding securities of the St. Paul & Des Moines Railroad. All the capital stock of the St. Paul, Kansas City Short Line Railroad which has been issued is owned by the Railway Company. The Short Line Rail- road is constructing at present a new line to Allerton, Iowa, a point on the Railway Company's main line to Kansas City. It is exi)ected that this line will be completed about Sc])lniil)er 1, 1912, and will then afford the Rock Island the shortest route by 43 miles between St. Paul and Kansas City. [ 056 ] PROPERTY The lines of the operating company of the Rock Ishmd System, the Chicago, Rock Ishxnd & Pacific Railway, extend from Chicago to St. Paul, Sioux Falls, Omaha, Denver and Pueblo, and southerly from Kansas City to El Paso, Dallas and Galveston, Texas, with branches to Memphis, Tennessee, Little Rock, Arkansas, and Eunice, Louisiana. Of the total miles operated during the fiscal year ending June 30, 1912, 8,042 miles, 7,197 are owned in fee; 225 represent mileage of leased lines, and 620 those operated under trackage rights. To show the extent of the system, the mileage extends into fourteen States of the Middle and South West, the bulk of its trackage lying in Iowa, Missouri, Kansas, Oklahoma and Arkansas. CAPITALIZATION To reach an approximate capitalization of the Rock Island System as a whole, the capital stock of The Rock Island Company, together with the small balance of Railway Company stock not held by the Railroad Company has been considered. The funded debt in the table below includes the funded obligations, both real and assumed, of the Railroad Company and the Railway Company. Rentals are those of the operating company and have been capitalized at 5%, and to procure the net capitalization, securities owned by the operating company as shown on its balance sheet have been deducted. Based on the annual reports of the three companies for the fiscal year ending June 30, 1912, the capitalization of the Rock Island System stood as follows: The Rock Island Company Preferred stock . . .^ $54,000,000 Common stock 96,000,000 C. R. I. & P. Ry. Co. Balance outstanding 3,646,500 Total capital stock $153,646,500 Funded debt C. R. I. & P. R. R. Co $78,853,500 C. R. I. & R. Ry. Co 251,189,000 Nominal capital $483,689,600 Rentals capitalized at 5% 30,895,000 Gross capitalization $514,584,600 Securities owned 9,695,546 Net capitalization $504,889,054 Net capital per mile operated $62,828 Average miles operated 8,035.84 Net income to net capital 3.9% Fixed charges to net income (Railway) 80.6% Fixed charges to net income (System) 97.4% Margin of safety (Railway) 19.4% Margin of safety (System") 2.6% As will be seen above, the net capital of the system per mile of road operated was $62,828. Compared with two other properties situated in similar territory, the Chicago, Burlington & Quincy [ 657 ] Railroad and the Chicago, Milwaukee & St. Paul Railway, this figure is rather high. The Burling- ton's net capital per mile for the fiscal year ending June 30, 1912, was but slightly over $32,000, while that of the St. Paul was $49,181. Comparing the net capitalization of the three properties for the past decade, we find the same relative disadvantage in the case of the Rock Island. The Burling- ton's ten-year average was $30,670, the St. Paid's was but $36,450, while the average figure of the Rock Island System was $56,000. A comparison of the ratio of total net income to the net capital of these three properties shows rather conclusively that the Rock Island System is not earning a sufficient amount to carry safely such a large capital burden. During the fiscal year of 1912 the Rock Island earned but 4% on its entire net capital. On the other hand, the Burlington was able to show net earnings of 9.7% on its net capital, while the St. Paul earned approximately 6.2% in spite of its unfortunate year. The average net income earned on net capital for the ten years ending 1912 of the three systems is as follows: Rock Island (Ry.) 4.2% Burlington 9.1 St. Paul 8.9 The scant factor of safety shown for the charges of the system reveals by what a close mar- gin the Railway Company in 1912 met the burdens of the three companies. The margin of the Railway Company proper, however, was nearly 20% as compared with 26% of 1911. This figure cannot be considered safe by any means. Nor does the decline as compared with 1911 appear en- couraging, yet it shows more exactly what the operating company is doing independent of the other two. During the fiscal year of 1912 the capital account of the Rock Island System was somewhat changed by the sale of $20,000,000 Twenty- Year 5% Debentures of the Chicago, Rock Island & Pacific Railway. These were offered on a 5.20 basis. The company has agreed not to sell within the next two years any additional debentures or any direct or guaranteed bonds. CHARACTER OF TRAFFIC Nearly two-thirds of the total trafiic of the Railway is freight. Tapping the grain centers of the West and South, the Rock Island is necessarily greatly dependent upon the success of the crops. It will be seen in the table below that 25% of the freight business of the company was the trans- portation of agricultural products, 30% of the products of mines, over one-half of which is represented by bituminous coal alone, and 10% of lumber products. Following are the ratios of commodity statistics (revenue freight only) for the years 1907 to 1912 inclusive: Products of 1912 1911 1910 1909 1908 1907 Agriculture 25.5% 25.8% 22.1% 25.0% 26.4% 25.4% Animals . . . 7.6 7.7 7.1 7.7 7.9 7.2 Mines .... 31.6 29.5 31.9 29.3 27.8 30.4 Forests . . . 10.4 11.6 12.3 12.5 12.2 11.8 Manufactures 17.9 18.4 19.5 18.1 17.9 17.5 Miscellaneous 7.0 7.0 7.1 7.4 7.8 7.7 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% In order to get a clearer idea of the freight business of the Rock Island and how it is handled, a few of the important traffic statistics of the Railway are given on page 659 for the six years, ending June 30, 1912: I 658 J Year Freight density Train load ton.s 1907 . . . 550,268 266 1908 ... ... 504,384 255 1909 ... ... 518,394 264 1910 ... , . . . 567,792 257 1911 ... , . . . 587,890 270 1912 ... . . . 572,340 278 Freight Rate earnings per ton per mile $40,663,972 $.0095 37,899,356 .0094 39,158,053 .0094 42,218,880 .0092 43,368,395 .0092 41,156,835 .0089 It will be seen by the foregoing that, with the exception of 1908, the freight density — number of tons of revenue freight carried one mile per mile of road — increased substantially; and that in general it was handled with increased efficiency during the period in question, the train load in 1908 being but 255 and in 1912 reaching 278. It was due more than anything else to this economy of handling commodities that caused the steady increase in freight earnings in the face of steady declining rates per ton per mile. As compared with the Burlington and even the St. Paul, it would seem that this handling of freight coidd be greatly improved in the future. For example, the Burlington reports an average freight density for the past ten years of 734,136 per year, and carried an average of 361 tons of revenue freight in every train load. The St. Paul's average for the period, though not so good as that of the Burlington, was much better than the Rock Island showing, as follows: St. Paul Rock Island (Ry.) Freight Train load density tons 660,807 271 513,365 248 Average number Passenger Rate per passengers eammgs passenger per tram mile per mile 44.54 $16,449,765 $.0227 54.20 16,693,110 .0189 58.05 17,883,380 .0188 54.31 19,378,174 .0191 54.91 20,240,528 .0200 49.21 18,609,408 .0198 During the fiscal year of 1912 29% of the gross business of the Railway Company was pas- senger, passenger earnings being that proportion of the total. Given below are some of the salient passenger statistics of the Railway based on its annual reports for the year 1907 to 1912 inclusive. Year Passenger density 1907 93,215 1908 110,670 1909 118,694 1910 126,360 1911 125,844 1912 116,900 The passenger density of the Railway — the number of passengers carried one mile for every mile operated — increased steadily up to 1910, declining since then. In every year except 1912 passenger earnings increased in spite of a decline in the average rate per passenger per mile during 1908, 1909 and 1910. A comparison of the average passenger density and the average rate per passengerper mile of the Rock Island, Burlington and the St. Paul properties for the decade ending June 30, 1912, follows: Average Average rate passenger per passenger density per mile Rock Island (Ry.) 100,239 $.0207 Burlington 105,320 .0197 St. Paul 80,754 .0209 [ 659 ] EARNINGS The operating company of the system, the Chicago, Rock Island & Pacific Railway, reports the following gross and net earnings for the six years ending 1912 as follows: Year Average miles Gross Per Net Per operated earnings mile earnmgs mile 1907 . . . . . 7,780 $60,238,420 $7,728 $19,194,277 $2,484 1908 . . . , . 7,970 58,484,196 7,338 16,155,449 2,028 1909 . . . . , 8,026 61,184,887 7,623 18,671,391 2,326 1910 . . . . . 8,043 66,220,578 8,233 18,151,210 2,257 1911 . . . . . 8,026 68,487,473 8,533 19,431,790 2,421 1912 . , . . . 8,036 64,712,853 8,053 17,953,359 2,234 Both gross and net earnings show the effect of the general business depression of 1908 and 1909. In 1910 gross earnings increased over those of the previous year over $5,000,000, or 8%. Corre- spondingly, operating expenses in that year increased over those of the previous year nearly $5,600,- 000, or 13%, due to large increases in amounts spent for both maintenance of way and equipment and in cost of conducting transportation. The latter, far more significant than charges for upkeep, can be explained almost entirely by increased cost of fuel and a materially larger wage account. In 1911 the earnings were rather better than in 1910. With a total increase in gross earnings of nearly $2,300,000, or 3.4%, and an increase in operating expenses of less than $1,000,000, or 2%, the net earnings of the company showed an increase of nearly $1,300,000, or 7%. The fiscal year of 1912 was relatively a poor one from an earning standpoint, gross revenue declining over $3,750,000, or 5.5%o and net, 1,475,000, or 7.6%. MAINTENANCE It cannot be said that the Railway Company has been lavish in its nuiintenance charges. As compared with the Burlington, its maintenance record does not make a very favorable showing. To be sure, the Burlington is one of the best maintained roads in the West, but even comparing the Rock Island with the St. Paul, the showing is none too good. Below are given the amounts spent per mile of road for maintenance by the Railway Company for the years 1907 to 1912 inclusive, and also the average amount spent each year for the past decade by the Railway Company and by its immediate competitors, the Burlington and the Missouri Pacific. Year Maintenance Total Way Equipment 1907 $1,175 $895 $2,070 1908 1,044 939 1,983 1909 1,128 936 2,064 1910 1,327 1,051 2,378 1911 1,213 1,166 2,379 1912 1,057 1,033 2,090 Ten years Rock Island $1,068 $905 $1,973 Burlington 1,374 1,379 2,753 St. Paul 951 944 1,895 It is interesting, too, to note the proportions of gross which each of the three properties in ques- tion spent upon maintenance. Following is a table which shows this ratio for the three, for the six years ending June 30, 1912: 1 660 ] 1912 1911 1910 1909 1908 1907 Rock Island 25.9% 27.9% 28.9% 27.1% 27.0% 26.9% Burlington 32.1 30.6 34.9 33.7 34.7 35.4 St. Paul 29.3 25.7 24.9 24.3 24.1 23.8 It will be seen by the foregoing that, while the ratio of the Rock Island has remained practically stationary, the ratio of the St. Paul has shown a marked increase from year to year, and also that neither of the two has spent proportionately anywhere near as much as the Burlington. ADDITIONS AND BETTERMENTS In accordance with the order of the Interstate Commerce Commission which requires each railroad to state in its balance sheet the additions to property made since June 30, 1907, which have been charged to income, the Chicago, Rock Island & Pacific Railway reports in its balance sheet of June 30, 1912, but $64,370. Since June 30, 1907, the road and equipment account of the company has been increased $31,610,477, and with the exception of the amount charged to income as above, all of this item has been charged to capital. DIVIDENDS There have been no dividends paid on the stock of The Rock Island Company since 1905. One per cent quarterly was paid on its preferred stock from February 1, 1903, to November 1, 1905, inclusive. The operating company (Chicago, Rock Island & Pacific Railway) has paid dividends continuously from 1891 as follows: Year Rate Year Rate 1891 3% 1904 8M% 1892-4 31^ 1905 614 1895-6 2 1906 6 1897 ^V2 1907-09 5^ 1898 4 1910 5 1899-1901 4K 1911 5M 1902 5 1912 5 1903 614 It should be borne in mind that the only income which The Rock Island Company has is what may be derived from dividends declared upon the stock of the Railway Company. During 1911 the Railway Company disbursed 5\i% which was just sufficient to care for the interest charges on the funded indebtedness of the Railroad Company, expenses and taxes, and to wipe out the 1910 deficits of the Railroad Company and The Rock Island Company of $309,470. In order that the 5% dividend rate to which the Rock Island preferred stock is entitled from 1910 to 1916 may be paid, the Railroad Company will be required to disburse 8.4% on its own capital stock, which would mean that it would have to earn rising 10%, a thing which was done in but one year, 1907. Al- though the Railway Company earned 6.33% on its capital stock in 1910, 7.27% in 1911 and 5.1% in 1912, there seems to be very little likelihood that the company will have increased its corporate surplus sufficiently to declare dividends on The Rock Island Company preferred stock for some time. The corporate surpluses of the three companies were reported to be as follows for the fiscal year ending June 30, 1912: The Rock Island Company $75,415 Chicago, Rock Island & Pacific Railroad Company 290,910 Chicago, Rock Island & Pacific Railway Company 14,598,084 [ 661 ] The surplus of the Railway Company, figured on the total capital stock of the Rock Island System, is equal to 9.4%. STATISTICS Following are given the capitalization, earnings and traffic statistics of the Rock Island System, based on the average miles operated, for the year 1900, and for the years 1905 to 1912 inclusive. In the capitalization figures the capital stocks of The Rock Island Company and the Rail- way Company (not held by the Railroad Company) are included under the heading of "Capital stock." The "Funded Debt" includes the obligations of both the Railroad and the Railway Com- panies. The earning figures are those of the operating company, with the exception of the item of Fixed charges, which includes besides the total cor]3orate deductions of the Railway Company, the interest obligations and ex^jenses and taxes of the Railroad Company and The Rock Island Com- pany. The traffic statistics given are those of the operating company. 1 ()(!^2 ROCK ISLAND SYSTEM Fiscal Capital Funded Rentals Gross Owned by Net Average ICxtra year stock debt capital company capiUil miles operated 3,636 track 1900 $13,751 $18,449 $4,687 $36,887 $1,799 $35,088 248 1905 21,442 35,552 2,987 59,981 5,357 54,624 7,232 288 1906 21,482 36,938 2,767 61,187 5,605 55,582 7,218 288 1907 19,914 36,330 3,074 59,318 5,130 54,188 7,780 289 1908 19,423 36,683 3,877 59,983 5,020 54,963 7,970 289 1909 19,264 36,042 3,907 59,213 4,966 54,247 8,026 289 1910 19,121 38,133 3.847 61,101 1,337 59,764 8,045 472 1911 19,150 38,494 4,248 61,892 1,411 60,481 8,026 470 1912 19,120 41,070 3,844 64,034 1.206 62,828 8,036 470 Fiscal Gross Maintenance Transportation Net Other Total FLxed charges year operating and general operating income net Rail- System (iu- revenue Way Equipment expense r $1,066 $647 $2,160 evenue income $2,549 way ck $1,322 ding railway) 1900 $6,229 $2,356 $193 1905 6,091 804 797 2,693 1,797 211 2,008 1,353 $1,862 1906 7,098 1,011 923 2.924 2,240 43 2,383 1,441 1,952 1907 7,729 1,175 895 3,175 2,484 22 2,606 1,438 1,915 1908 7,338 1,044 939 3,327 2,028 46 2,174 1,577 2.041 1909 7,623 1,128 936 3,233 2,326 48 2,474 1,703 2,164 1910 8,233 1,327 1,051 3,598 2,257 96 2,453 1,859 2,318 1911 8,533 1,213 1,166 3,732 2,421 96 2.617 1,939 2,356 1912 8,052 1,057 1,033 3,728 2,234 233 2,467 1,988 2,400 Fiscal Surplus avail- Dividends Surplus Dividend Surplu 5 avail- Di 'idends on Surplus year able for (Railway) (Railway) Rai way stock able for divi- Rock Island (System) dividends of outstanding dends on Rock Preferred Railway $1,227 Island Co. stock 1900 $550 $677 1905 654 646 9 $40 $106 $269 $163* 1906 942 648 294 42 389 08 321 1907 1,168 529 039 34 657 657 1908 597 493 104 31 102 102 1909 771 489 282 29 281 281 1910 594 465 129 25 110 110 1911 678 490 188 23 238 238 1912 479 466 13 22 45 45 Fiscal Operating Total Conducting Fixed Gross Net Per cent earned on Freight year expenses mainte- transpor- charges earnings incom to all to gross nance to tation to to gross to gross to net Railway Rocklslan 1 traflSc earnings gross gross earnings capital capita stock preferred earnings earnings 7.2% stock 1900 62.18% 28.10% 34.08% 21.3% 16.8% 5.9% 70% 1905 70.50 26.29 44.21 30.5 10.1 3.7 6.3 1.4% 67 1906 68.44 27.25 41.19 27.5 11.6 4.3 9.0 5.2 68 1907 68.11 26.88 41.23 24.8 13.0 4.8 12.1 9.4 68 1908 72.38 27.03 45.35 28.0 12.2 3.9 6.3 1.5 65 1909 69.48 27.07 42.11 28.5 12.8 4.5 8.3 4.2 64 1910 72.59 28.89 43.70 28.2 13.4 4.1 6.4 1.6 64 1911 71.63 27.89 43.74 27.7 13.7 4.3 7.3 3.5 63 1912 72.26 25.96 46.30 30.0 12.5 3.9 5.1 .7 64 * Deficit. [ 66t ] ROCK ISLAND SYSTEM Fiscal Train Maintenance Coi ducting Train Kate per mile Freight Train Passenger year mile per revenne ransportation mile density load freight earnings train mile per revenue earnings Per Per revenue and (gross) Way Equipment train mile (net) passenger ton tons company 1900 $1.46 $ 251 $.153 $.509 $.556 $.0206 $.0099 440,121 177 19,070 1905 65 217 .215 727 .485 .0218 .0094 438,531 228 40,942 1906 76 254 .238 723 .554 .0215 .0093 514,767 245 41,369 1907 86 282 .215 775 .593 .0223 .0094 550,268 266 45,095 1908 82 258 .233 826 .503 .0189 .0094 504,384 255 43,642 1909 90 281 .233 806 .580 .0188 .0094 518,394 264 41,625 1910 85 299 .236 809 .507 .0191 .0092 567,792 257 44,178 1911 94 276 .265 850 .557 .0200 .0092 587,890 270 46,668 1912 84 244 .237 857 .514 .0198 .0089 572,340 278 46,902 [ 664 ] BOND DESCRIPTIONS Following are descriptions of the bond issues of the Rock Island Sys- tem, both direct and assumed, together with the bases upon which they have sold during the decade ending December 31, 1912: CHICAGO, ROCK ISLAND & PACIFIC RAILROAD Collateral Trust 4s Dated August 1, 1902 Maturing November 1, 2002 Interest payable May 1 and November 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $5,000 and multiples. Coupon and registered bonds interchangeable. Authorized $75,000,000 Outstanding $71,353,500 Security: These bonds are secured by a deposit with the trustee of the capital stock of the Chicago, Rock Island & Pacific Railway Company now owned or hereafter to be acquired by the Chicago, Rock Island & Pacific Railroad Company. On June 30, 1912, $71,353,500 of the $75,000,000 Railway Company stock had been acquired and deposited with the trustee. The capital stock of the Chicago, Rock Island & Pacific Railway Company cannot be in- creased beyond the $75,000,000 now authorized until all the bonds of this issue are paid, and bonds may be issued only to the face amount of the stock deposited under this mortgage. Trustee: Central Trust Company, New York. These bonds sold in 1902 on a 4.55 to 5.00 basis 1903 4.50 5.80 1904 4.85 6.00 1905 4.70 5.15 1906 4.90 5.35 1907 5.20 7.00 1908 5.05 6.50 1909 4.70 5.30 1910 4.75 6.00 1911 5.20 5.60 1912 5.45 6.00 CHICAGO, ROCK ISLAND & PACIFIC RAILROAD First Mortgage 6s Dated May 1, 1877 Maturing July 1, 1917 Interest payable January 1 and July 1 at the First National Bank, New York. Coupon bonds of $1,000, exchangeable for registered bonds. Registered bonds of $5,000. Authorized $12,500,000 Outstanding $12,500,000 Per mile . . 16,340 Security: The above bonds are secured by a first mortgage on 765.39 miles of road, including the line from Chicago to Council Bluffs, la., 500.46 miles, and from Davenport to Knoxville, la., 144.12 miles. In the mileage between Chicago and Council Bluffs is included the bridge across the Mississippi River at Rock Island, 111. This bridge is owned by the Government, [ 666 ] but is leased in perpetuity to the company. The bonds are also secured by a mortgage on equipment, appurtenances and future acquisitions. These bonds were ASSUMED by the Chicago, Rock Island & Pacific Railway Company. Equity: These bonds are prior in lien to the Refunding 4s of 1934, and to the General 4s of 1988, a sufficient number of which are reserved to retire this issue at maturity. Trustee: United States Trust Company, New York. These bonds sold in 1902 on a 3.27 to 4.05 basis 1903 3.50 4.00 1904 3.15 3.875 1905 3.35 3.85 1906 3.70 4.00 1907 3.87 4.25 1908 3.80 4.375 1909 3.87 4.25 1910 4.00 4.40 1911 4.10 4.35 1912 4.05 4.50 These bonds are considered a legal investment for savings banks in New England. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY General Mortgage 4s Dated January 1, 1898 Maturing January 1, 1988 Interest payable January 1 and July 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Registered bonds of $1,000 and $5,000. Authorized $100,000,000 Outstanding $61,581,000 Per mile . . 18,925 Provisions of Although the amount of this issue was authorized $100,000,000, the limit of the issue was issue: placed at $99,981,000 by the terms of the Chicago, Rock Island & Pacific Railway Refunding Mortgage. Beside the amount outstanding as above, $12,500,000 have been reserved to retire the First 6s of 1917, $17,900,000 are issuable for additions and improvements at the rate of $1,000,000 per year, and $8,000,000 are held by the trustees of the Refunding Mortgage. Under the terms of the Refunding Mortgage, all of the General Mortgage bonds issued sub- sequent to April 1, 1904, are to be acquired and deposited, without impairment of Uen, with the trustee of the Refunding Mortgage. Security: The above bonds are secured by a direct mortgage or by collateral trust upon 3,254.48 miles of road; upon securities, leaseholds, trackage rights and contracts, terminals, lands, build- ings, appurtenances, equipment and future acquisitions. They are secured by a first mortgage on 2,396.00 miles of road including the line from South Omaha, Neb., to Colorado Springs, Colo., 562.63 miles and from Washington, la., to Terral, Okla., 643.75 miles; in effect by a first mortgage on 93.09 miles of road extending from Terral to Fort Worth, Tex. being a [ 667 ] first collateral Hen on $1,365,000 Chicago, Rock Island & Texas First Mortgage Bonds covering this mileage; by a second mortgage on 765.39 miles of road which are covered by the first mortgage of the Chicago, Rock Island & Pacific First 6s of 1917; and by a first lien on the leasehold interest of the company in the Keokuk & Des Moines Railway covering 162.31 miles; also upon trackage rights and contracts covering 341.50 miles. Equity: The above bonds are subject to the $12,500,000 Chicago, Rock Island & Pacific Railroad First 6s of 1917 (for description see above). They are prior in lien to the Chicago, Rock Island & Pacific Railway First and Refunding 4s of 1934. Trustees: Bankers Trust Company, New York, and Benjamin Strong, Jr. These bonds sold in 1902 on a 3.50 to 3.80 basis 1903 3.70 4.05 1904 3.75 3.95 1905 3.70 3.85 1906 3.87 4.05 1907 4.00 4.55 1908 3.90 4.25 1909 3.95 4.05 1910 4.05 4.25 1911 4.05 4.20 1912 4.10 4.35 These bonds are considered a legal investment for savings banks in New England. CEDAR RAPIDS, IOWA FALLS & NORTHWESTERN RAILWAY First Mortgage 5s Dated June 23, 1881 Maturing October 1, 1921 Interest payable April 1 and October 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $4,000,000 Outstanding $1,905,000 Per mile . . 6,524 Provisions of Of the $4,000,000 authorized, $3,916,000 have been issued, $2,011,000 of which have been issue: acquired and deposited, without impairment of the lien, with the trustee of the Burlington, Cedar Rapids & Northern Railway Company Consolidated First Mortgage in lieu of bonds of that issue. Security: The above bonds are secured by a first mortgage on the company's lines from Holland, la., via Dows, to Worthington, Minn., 182.64 miles, and from Dows via Germania to Esterville, la., 108.87 miles, totalling 291.51 miles; also on appurtenances, equipment and future acquisitions. Trustee: Central Trust Company, New York. The Cedar Rapids, Iowa Falls & Northwestern Railway Company was chartered under the laws of the State of Iowa. It was opened for business in December, 1880, from Holland to Clarion, Iowa, a distance of 55 miles. The road was leased in perpetuity by the Burlington, Cedar Rapids & North- [ 668 ] ern Railway and operated as the Iowa Falls Division of that line. In 1900 these two roads were merged under the name of the Burlington, Cedar Rapids & Northern Railway, and in 1903 the latter deeded its property to the Chicago, Rock Island & Pacific Railway Company. The above bonds sold in 1905 on a 4.05 basis 1909 4.35 (bid) 1910 4.30 to 4.35 1911 4.43 (bid) December, 1912 4.70 (bid) The above bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecti- cut and Rhode Island. BURLINGTON, CEDAR RAPIDS & NORTHERN RAILWAY Consolidated First Mortgage 5s Dated April 1, 1884 Maturing April 1, 1934 Interest payable April 1 and October 1 at First National Bank, New York. Coupon bonds of $1,000, exchangeable for registered bonds. Registered bonds of $5,000. Authorized $19,405,000 Outstanding $11,000,000 Provisions of Although these bonds were authorized at the rate of $15,000 per mile of single track and issue: $7,500 per mile additional for double track, the Refunding Mortgage of the Chicago, Rock Island & Pacific limits the issue to $19,405,000, as above. Of this amount, beside the $11,000,000 outstanding, as above, $6,500,000 are held by the trustee of the Refunding Mort- gage and $1,905,000 are reserved to retire the Cedar Rapids, Iowa Falls & Northwestern First 5s of 1921. Security: The above issue is secured by direct mortgage upon 1,301.48 miles of road, appurtenances and future acquisitions. They are secured l)y a first mortgage on 997.63 miles of road including the company's line from Lake Park, la., to Watertown, S. D., a distance of 164.08 miles, and from Burlington to Plymouth Junction, la., a distance of 219.52 miles; by a second mortgage on 303.85 miles, including the 291.51 miles covered by the first mortgage of the Cedar Rapids, Iowa Falls & Northwestern First 5s (see page 668), and on the Minnesota-Iowa State Line cov- ered by the first mortgage of the MinneapoUs & St. Louis First Guaranteed 7s (see page 671). They are also secured by trackage rights covering 39 miles of road. Equity: These bonds are prior in lien to the Chicago, Rock Island & Pacific Railway First & Refund- ing 4s of 1934. Trustee: The Central Trust Company, New York. The Burlington, Cedar Rapids & Northern Railway Company was organized as the Burlington, Cedar Rapids & Minnesota Railroad Company, in June, 1868, and was completed in September, 1873. The Burlington, Cedar Rapids & Minnesota, upon default of interest on its bonds due November 1, 1873, was placed in the hands of a receiver by whom it was operated until July 1, 1876, when the present company, the Burlington, Cedar Rapids & Northern Railway, was organized, purchasing the road and property of the former. [ 669 ] The Burlington, Cedar Rapids & Northern Railway was leased to the Chicago, Rock Island & Pacific Railway for 999 years from June 1, 1902, at a yearly rental amounting to 6% net on the capital stock, at the same time offering to purchase the outstanding capital stock of the former by issuing in exchange therefor share for share of its own capital stock. This plan was consummated in the following year, subject to its various mortgages. These bonds sold in 1902 on a 3.65 to 3.85 basis 1903 3.80 3.87 1904 3.75 4.10 1905 3.75 3.95 1906 3.87 4.00 1907 4.00 4.75 1908 3.95 4.60 1909 3.95 4.05 1910 4.05 4.35 1911 4.15 4.27 1912 4.20 4.40 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecti- cut and Rhode Island. ROCK ISLAND & PEORIA RAILWAY Consolidated First Mortgage 6s Dated July 1, 1885 Maturing July 1, 1925 Interest payable January 1 and July 1 at the First National Bank, New York. Coupon bonds of $1,000, exchangeable for registered bonds. Registered bonds of $5,000. Authorized $600,000 Outstanding $450,000 Per mile . . 3,982 Provisions of Under the terms of the Chicago, Rock Island & Pacific Railway Refunding Mortgage this issue: issue is limited to $450,000, all of which are outstanding as above. Security: The above bonds are secured by a first mortgage on 112.86 miles of road, including the line from Rock Island to Peoria, 111., 90.49 miles. They are further secured by a first mortgage on all the equipment of the line and future acquisitions. Ivpiity: These bonds are prior in lien to the Chicago, Rock Island & Pacific Railway First & Refund- ing 4s of 1934, a sufficient number of which have been reserved to retire this issue. Trustee: Metropolitan Trust Company, New York. The Rock Island & Peoria Railway Company, a corporation of the State of Illinois, was the reorganization of the Peoria & Rock Island Railway Company, October 9, 1877. The former was leased for 999 years from June 1, 1902, to the Chicago, Rock Island & Pacific Railway Company, the lessee assimiing all the obligations of this company, and agreeing to pay dividends on its capital 1 G70 ] stock at the rate of 6% per annum. Subject to the above mortgage, the property of the Rock Island & Peoria Railway Company was purchased by the Chicago, Rock Island & Pacific Railway Company in 1903. These bonds were quoted in 1909 on a 4.68 basis (bid) 1910 4.95 1911 5.47 December, 1912 5.75 These bonds are considered a legal investment for savings banks in Maine, New Hampshire, Connecticut and Rhode Island. MINNEAPOLIS & ST. LOUIS RAILROAD First Mortgage Guaranteed 7s Dated February 1, 1877 Interest Security : Equity: Trustee: Maturing June 1, 1927 e June 1 and December 1 at the First National Bank, New York. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Outstanding $150,000 Per mile . . 12,500 The above bonds are secured by a first mortgage on 12.34 miles of the company's road be- tween Albert Lea, Minn., and the Iowa-Minnesota State Line. The bonds numbered 1101 to 1400 are GUARANTEED as to PRINCIPAL and INTEREST by the Burhngton, Cedar Rapids & Northern Railway. The above bonds are prior in lien to the Burhngton, Cedar Rapids & Northern Railway Con- solidated 5s of 1934, and also prior to the Chicago, Rock Island & Pacific Railway Refund- ing 4s of 1934. Farmers' Loan & Trust Company, New York. The Minneapolis & St. Louis Railroad Company is a corporation of the State of Minnesota and was leased to the Burlington, Cedar Rapids & Northern Railway Company for 999 years on the guarantee of $150,000 for these bonds. When the bonds are paid off, the road becomes the property of the latter, which in turn had conveyed its property in 1903 to the Chicago, Rock Island & Pacific Railway Company. These bonds sold in 1902 on a 3.95 to 4.30 basis 1903 4.00 4.22 1905 4.35 1907 4.68 1908 4.75 4.90 1909 4.30 4.37 1910 4.30 4.40 1911 4.37 S 1912 4.30 The bonds numbered 1101 to 1400 are considered legal for savings banks in Maine and New Hampshire. [671 ] CHICAGO, ROCK ISLAND & PACIFIC RAILWAY First & Refunding Mortgage 4s Dated April 1, 1904 Maturing April 1, 1934 Interest payable April 1 and October 1 at the First National Bank, New York. Coupon bonds of $500 and $1,000, registerable as to principal or fully registerable. Registered bonds of $500 and $1,000. Coupon and registered bonds interchangeable. Authorized $163,000,000 Outstanding $94,942,000 Per mile . 16,250 Provisions of The balance of these bonds, authorized but not issued, is issuable as follows: $870,000 for issue: future acquisitions and property, $48,713,000 for refunding underlying liens, $13,500,000 for acquisitions of bonds of other companies and $4,975,000 for additions and improvements to existing lines at not exceeding $2,500,000 for each calendar year beginning January 1, 1904. Security: Trustees : The above bonds are secured by a direct mortgage or by collateral trust on 5,840.80 miles of road and upon leaseholds aggregating 1,129.7 miles, together with securities, trackage rights, terminals and equipment of those lines and future acquisitions. The bonds are secured by a direct first mortgage on 654.32 miles of road including the lines from St. Louis to Strasburg Junction, Mo., and from Geary to Anadarko, Okla., also upon terminal property at St. Paul, Minn., and new equipment and shops at East Moline, 111. The bonds are further secured in effect by a first mortgage on 517.66 miles of road, including the fines of the Chicago, Rock Island & Gulf Railway Company, 365 miles, and those of the Chicago, Rock Island & El Paso Railway, 153 miles. They are further secured by a second mortgage on 3,506.49 miles of road subject to the Chicago, Rock Island & Pacific General 4s of 1988, the Burlington, Cedar Rapids & Northern Consolidated 5s of 1934, and the Rock Island & Peoria First 6s of 1925 (all of which see). The bonds are secured also in effect by a second mortgage on 93 miles of road subject to the First Mortgage Bonds of the Chicago, Rock Island & Texas Railway, and by a third mortgage on 1,069.24 miles of road. The company agrees in its mortgage not to issue any additional prior hens unless the same shall be pledged with the trustee of this issue, nor can there be any extensions permitted while any of the bonds of this issue remain outstanding. Central Trust Company, New York, and David R. Francis, Esq. These bonds sold in 1904 on a 4.15 to 4.20 basis 1905 4.05 4.30 1906 4.15 4.55 1907 4.55 5.40 1908 4.55 5.15 1909 4.40 4.70 1910 4.55 5.00 1911 4.70 4.90 1912 4.70 5.00 These bonds are considered a legal investment for savings banks in New Hampshire. [ 672 CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Choctaw, Oklahoma & Gulf Collateral Trust 4s Dated May 1, 1902 Maturing annually $1,494,000 each May 1 to May 1, 1918 Interest payable May 1 and November 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $24,000,000 Outstanding $8,964,000 Provisions of Of the total amount authorized, $23,883,000 have been issued. Series "A" to "J" issue: ($14,919,000) have been cancelled. Security : The above bonds are secured by a first lien by deposit with the trustee of the entire $9,827,500 common stock and the entire $6,000,000 preferred stock of the Choctaw, Oklahoma & Gulf Railroad. It is provided in the indenture that the capital stock of the Choctaw, Oklahoma & Gulf Railroad shall not be increased unless a proportionate amount shall be delivered to the trustee hereunder, nor can the railroad create any mortgage or issue any bonds under existing mortgages other than the Consolidated 5s of 1952. Redemption: These bonds are redeemable at 101 J^ and interest on any interest date upon 60 days' notice. Trustee: Central Trust Company, New York. These bonds are considered a legal investment for savings banks in New Hampshire. CHOCTAW, OKLAHOMA & GULF RAILROAD General Mortgage 5s Dated October 3, 1894 Maturing October 1, 1919 Interest payable January 1 and July 1 at the First National Bank, New York, or at the Girard Trust Co., Philadelphia. Coupon bonds of $1,000, registerable as to principal or fully registerable. Authorized $5,500,000 Outstanding $5,500,000 Per mile . . 15,670 Security : The above bonds are secured by a first mortgage on 350.57 miles of road, from the Arkansas- Oklahoma State Line to Elk City, Okla., 325.16 miles, and from Tecumseh to Asher, Okla., 25.41 miles; also on spurs to coal mines, coal mining property of the company, appurtenances, equipment and futm-e acquisitions. These bonds have been ASSUMED by the Chicago, Rock Island & Pacific Railway Company. A sufficient number of the Chicago, Rock Island & Pacific Railway Refunding 4s of 1934 have been reserved to retire this issue at maturity, also the company's Consohdated 5s of 1952. The Choctaw, Oklahoma & Gulf Railroad was created under an Act of Congress in 1894. In 1904 it was leased for 999 years to the Chicago, Rock Island & Pacific Railway Company, which [ 673 ] owns the entire capital stock. At the time of the lease the interest on the Choctaw, Oklahoma & Gulf issues were guaranteed by the former. These bonds sold in 1902 on a 3.85 to 4.55 basis 1903 4.20 4.37 1904 4.15 4.60 1905 3.55 4.25 1906 4.35 4.45 1907 4.45 4.55 1908 4.50 4.75 1909 4.70 (bid) 1910 4.45 (bid) 1911 4.58 to 4.62 1912 4.65 CHOCTAW & MEMPHIS RAH^ROAD First Mortgage 5s Dated January 2, 1899 Maturing January 1, 1949 Interest payable January 1 and July 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $3,750,000 Outstanding $3,525,000 Per mUe . . 12,500 Pro\'isions of Although the amount authorized was $3,750,000, as above, by the terms of the Choctaw, issue: Oklahoma & Gulf Railroad Consolidated 5s of 1952, this amoimt was Umited to $3,525,000, all of which is outstanding. Security: The above bonds are secured by a first mortgage on 282.32 miles of road from the west bank of the Mississippi River on the company's line in Arkansas to the Oklahoma-Arkansas State Line; on terminals in Memphis, Tenn., and trackage rights from Memphis to Bridge Sidings, Ark. These bonds have been ASSUMED by the Choctaw, Oklahoma & Gulf Railroad Company, and later ASSUMED by the Chicago, Rock Island & Pacific Railway Company. Equity: The above bonds are prior in lien to the Choctaw, Oklahoma & Gulf Consolidated 5s of 1952, a sufficient number of which have been reserved to retire this issue at maturity. Trustee: Girard Trust Company, Philadelphia. The Choctaw & Memphis Railroad Company was purchased in 1900 by the Choctaw, Oklahoma & Gulf Railroad Company, whose entire capital stock is owned by, and its property leased to, the Chicago, Rock Island & Pacific Railway Company for 999 years from 1904. These bonds were quoted in 1909 on a 4.45 basis (bid) 1910 4.45 to 4.55 1911 4.55 December, 1912 4.65 [ 674 ] LITTLE ROCK BRIDGE COMPANY First Mortgage 6s Dated June 29, 1899 Maturing July 1, 1919 Interest payable January 1 and July 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $375,000 Outstanding $175,000 Security : The above bonds are secured by a first mortgage on the bridge across the Arkansas River at Little Rock and on all the property pertaining to the same. These bonds have been ASSUMED by the Chicago, Rock Island & Pacific Railway Company. Sinking fund : The company has provided for the retirement of these bonds by means of a sinking fund equal to $21,000 each year, beginning June 1, 1903. Up to June 30, 1912, $200,000 of these bonds had thus been retired and cancelled by this sinking fund. Redemption: The above bonds are redeemable for the sinking fund at 105 and interest at the rate of $20,000 yearly. Trustee: Girard Trust Company, Philadelphia. The Little Rock Bridge Company was incorporated in the State of Arkansas to build the above- mentioned bridge over the Arkansas River. Its entire capital stock is owned by the Choctaw, Oklahoma & Gulf Railroad Company, which in turn is controlled by the Chicago, Rock Island & Pacific Railway Company. CHOCTAW, OKLAHOMA & GULF RAILROAD Consolidated Mortgage 5s Dated May 1, 1902 Maturing May 1, 1952 Interest payable May 1 and November 1 at the Girard Trust Company, Philadelphia, and at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Outstanding $5,411,000 Per mile . . 5,596 The amount authorized is $1,000,000 for mining property, and $15,000 per mile, including underlying bonds of completed railroad covered. Provisions of By the terms of the Chicago, Rock Island & Pacific Railway Refunding Mortgage no further issue: bonds may be issued except for the purpose of refunding a like amount of $5,500,000 Choctaw, Oklahoma & Gulf General Mortgage 5s of 1919, which upon issuance are to be immediately placed with the trustee of the above refunding mortgage. Security : The above bonds are secured by a direct mortgage upon 967.39 miles of road, together with leaseholds, buildings, equipment and future acquisitions. They are secured by a first mort- [ 675 ] gage on 334.5 miles of road, a second mortgage on 632.89 miles of road, covered by the first lien of the Choctaw, Oklahoma & Gulf General 5s, the Choctaw & Memphis 5s, and the Little Rock Bridge Company 6s. They are further secured by a first lien on the leaseholds of the company aggregating 62.27 miles. The above bonds have been ASSUMED by the Chicago, Rock Island & Pacific Railway Company under the terms of its lease. Trustee: Girard Trust Company, Philadelpliia. For a history of the Choctaw, Oklahoma & Gulf Railroad Company, see page 673. These bonds sold in 1904 on a 4.80 basis 1905 4.25 1906 4.45 to 4.55 1908 4.50 4.60 1909 4.37 4.40 1910 4.45 4.60 1911 4.50 4.55 1912 4.55 4.65 ROCK ISLAND, ARKANSAS & LOUISIANA RAILROAD First Mortgage 43^s Dated March 1, 1910 Maturing March 1, 1934 Interest payable March 1 and September 1 at the First National Bank, New York, and at offices in certain cities in Europe as may be designated. Coupon bonds of $100, $500 and $1,000, registerable as to principal. Registered bonds of $500, $1,000, $5,000 or multiples of $5,000. Coupon and registered bonds interchangeable. Authorized $30,000,000 Outstanding $11,000,000 Per mile . . 33,300 Provisions of In addition to the $11,000,000 outstanding, $10,000,000 of the amoimt authorized are reserved issue: for new mileage at not exceeding $30,000 per mile, and $9,000 for additions and betterments exclusive of equipment. Security: The above bonds are secured by a first mortgage on 330.39 miles of road, equipment and future acquisitions. They are also secured by a first mortgage on trackage rights aggregat- ing 37.89 miles. These bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Chicago, Rock Island & Pacific Railway Company by endorsement. Redemption: The bonds are redeemable at 105 and interest on any interest date upon 60 days' notice. Trustee: The Bankers Trust (Company, New York. The Rock Island, Arkansas & Louisiana Railroad was incorporated in 1905 under the laws of the States of Louisiana and Arkansas, as a consolidation of the Little Rock & Southern Railroad, f 676 1 the Arkansas Southern Railroad and the Arkansas Southern Extension Railway Companies. By indentures dated January 31, 1906, and March 1, 1910, the road was leased for 999 years to the Chi- cago, Rock Island & Pacific Railway Company, which guaranteed the company's bonds, and agreed to pay all rentals, taxes and $500 for corporate expenses. The Chicago, Rock Island & Pacific Railway Company owns the entire capital stock of the Rock Island, Arkansas & Louisiana Railroad Company. In 1912 these bonds were quoted on a 5.00 to 5.50 basis (bid). These bonds are considered a legal investment for savings banks in New Hampshire. ROCK ISLAND, ARKANSAS & LOUISIANA RAILROAD Hot Springs Western 4s Dated October 14, 1911 Maturing July 1, 1939 Interest payable January 1 and July 1 at Chicago. Coupon notes of $1,000. Authorized $453,600 Outstanding $453,600 Security: The above notes are a direct obligation of the Rock Island, Arkansas & Louisiana Rail- road Company, but are not secured by a mortgage. They have been GUARANTEED as to PRINCIPAL and INTEREST by the Chicago, Rock Island, & Pacific Railway Company. KEOKUK & DES MOINES RAILWAY First Mortgage 5s Dated September 20, 1878 Maturing October 1, 1923 Interest payable April 1 and October 1 at the First National Bank, New York. Coupon bonds of $100, $500 and $1,000, registerable as to prmcipal. Authorized $2,750,000 Outstanding $2,750,000 Per mile . . 10,975 Security: The above bonds are secured by a first mortgage on 162.31 miles of road extending from Keokuk to Des Moines, la.; also upon equipment. These bonds are GUARANTEED as to INTEREST by the Chicago, Rock Island & Pacific Railway Company under the terms of its lease. Trustee: The Farmers' Loan & Trust Company, New York. [ 677 ] The Keokuk & Des Moines Railway was a reorganization on January 1, 1874, of the Eastern Division of the Des Moines Valley Railroad, which had been opened for traffic in 1870, and sold in foreclosure in 1873. The new company was leased in 1878 to the Chicago, Rock Island & Pacific Railroad Company until December, 1923. Under the terms of the lease the Chicago, Rock Island & Pacific Railroad Company was to pay interest on the bonds and 25% of the gross earnings as annual rental; and the existing bonds were to be exchanged for $2,750,000 5% first mortgage bonds. The Chicago, Rock Island & Pacific Railroad was succeeded in 1880 by the Chicago, Rock Island & Pacific Railway, which owns a majority of the capital stock of the Keokuk & Des Moines Railway. These bonds sold in 1902 on a 4.25 to 4.30 1903 4.37 4.67 1904 4.45 4.67 1905 4.15 4.27 1906 4.05 4.55 1907 4.75 5.50 1908 4.60 5.12 1909 4.50 4.70 1910 4.60 5.00 1911 4.70 5.10 1912 4.85 5.25 These bonds are considered a legal investment for savings banks in Maine. WHITE & BLACK RIVER VALLEY RAILROAD First Mortgage 5s Dated June 30, 1900 Maturing July 1, 1980 Interest payable January 1 and July 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $800,000 Outstandmg $600,000 Per mUe . . 9,677 Provisions of In addition to the $600,000 outstanding, there are $200,000 reserved to extend the road to issue: Batesville. Security: The above bonds are secured by a first mortgage on 62.27 miles of road, equipment and future acquisitions. The bonds are GUARANTEED as to INTEREST by the Choctaw, Oklahoma & Gulf Rail- road by endorsement. The White & Black River Valley Railroad Company was chartered under the laws of the State of Arkansas in 1881 as the Batesville & Brinkley Railroad Company. In 1890 the Batesville & Brinkley Railroad changed its name to the present title, the White & Black River Valley Railroad Company. Bonds of the Batesville & Brinkley Railroad were cancelled and White & Black River Valley Railroad bonds were issued in lieu thereof. The company was leased to the Choctaw, Oklahoma & Gulf Railroad Company for 80 years [ 678 ] from July, 1900, the annual rental to be equal to interest on $500,000 5% bonds for the first 10 years and on $600,000 5% bonds thereafter. (For history of the Choctaw, Oklahoma & Gulf Rail- road Company, see page 673.) ST. PAUL & KANSAS CITY SHORT LINE RAILROAD First Mortgage 4J4s Dated February 1, 1911 Maturing February 1, 1941 Interest payable February 1 and August 1 at New York or London. Coupon bonds of $500 and $1,000; £100 and £200, registerable as to principal or fully registerable. Coupon and registered bonds interchangeable. Sterling bonds will be exchangeable for doUar bonds after February 1, 1912, at a fixed rate of $4.85 per £ sterling. Authorized $30,000,000 Outstanding $10,000,000 Per mile . . 52,900 Provisions of Of the $30,000,000 authorized $10,000,000 are outstandmg as above, $10,000,000 have been issue: reserved for new mileage at cost and $10,000,000 for actual cost of additions and betterments to the hnes imder this mortgage. Security: The above bonds are secured by a first mortgage on 188.65 miles of road including the hue from the Rock Island Railway at Allerton through Des Moines to Mason City near a point of connection with the Chicago-St. Paul line, also upon trackage rights over the Chicago, Rock Island & Pacific Railway from Carlisle to Des Moines. The bonds are GUARANTEED as to PRINCIPAL and INTEREST by the Chicago, Rock Island & Pacific Railway Company by endorsement. Redemption: Redeemable as a whole but not in part at 105 and interest on any interest date on 60 days' notice. Trustee: Bankers Trust Company, New York. For history of the St. Paul & Kansas City Short Line Railroad Company, see page 656. These bonds were quoted in 1911 on a5. 125 basis (bid) December, 1912 5.25 These bonds are considered a legal investment for savings banks in Maine and New Hampshire. [ 679 ] CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Trust 43^2% Gold Notes. Series "A" Dated February 1, 1907 Maturing $325,000 February 1 and August 1 until February 1, 1917 Interest payable February 1 and August 1 at the First National Bank, New York. Coupon notes of $1,000. Authorized $6,500,000 Outstanding $3,250,000 The above notes mature in twenty consecutive semi-annual installments of $325,000 each, commencing August 1, 1907, and ending February 1, 1917. Up to June 30, 1912, $3,250,000 have matured. Security: These notes are a direct obligation of the company. They are secured by an equipment lease covering 50 locomotives, 65 passenger train cars and 5,000 freight train cars. The title to the equipment shall not revert to the Railway Company until all the notes have been paid, and ample powers are vested with the trustee for the protection of the note holders. Trustee: Bankers Trust Company, New York. The above notes were underwritten by Speyer & Company, New York, in 1907, and were offered in February of that year to the public on a 5.125 basis. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Trust 6% Notes. Series **B" Dated October 15, 1907 Maturing $60,000 each April 15 and October 15 until April 15, 1913 Interest payable Ai^ril 15 and October 15 at Harvey Fisk & Sons, New York. Coupon notes of $10,000 each and one note for $6,541. Authorized $586,541 Outstanding $120,000 Provisions of The above notes mature $46,541 October 15, 1908, and in nine consecutive semi-annual issue: installments of $60,000 each, commencing April 15, 1909, and ending April 15, 1913. Up to June 30, 1912, $466,541 have been matured. Security: These notes are a direct obligation of the company. They are secured by an equipment lease on 45 locomotives. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Trust 4%% Bonds. Series "C" Dated October 1, 1909 Maturing $265,000 each April 1 and October 1 until October 1, 1919 Interest payable April 1 and October 1 at the First National Bank, New York. Coupon bonds of $1,000. Authorized $5,300,000 Outstanding $3,975,000 Provisions of issue: Security : Trustee : The above bonds mature in twenty semi-annual payments of $265,000 each, commencing April 1, 1910, and ending October 1, 1919. Up to June 30, 1912, $1,325,000 of these bonds have been redeemed. These bonds are secured by an equipment lease covering 85 locomotives, 100 passenger cars and 3,610 freight cars. The title to this equipment shall remain with the trustee until all these bonds shall have been jiaid. Central Trust Company, New York. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Trust 4H% Bonds. Series "D" Dated May 2, 1910 Maturing $225,000 each May 1 and November 1 until May 1, 1925 Interest payable May 1 and November 1 at the First National Bank, New York. Coupon bonds of $1,000, registerable as to principal. Authorized $6,750,000 Outstanding $5,850,000 Provisions of The above bonds mature in thirty semi-annual installments of $225,000 each, commencing issue: November 1, 1910, and ending May 1, 1925. Up to June 30, 1912, $900,000 of these bonds had been redeemed. Security: These bonds are a direct obligation of the company and are secured by an equipment lease covering 134 locomotives, 4 motor cars, 71 passenger cars and 4,000 freight cars. The title to this equipment shall remain with the trustee until all of these bonds shall have been paid. Trustee: Bankers Trust Company, New York. [ 681 ] CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Trust 5% Notes. Series "E" Dated January 1, 1911 Maturing $5,000 each January 1 and July 1 until January 1, 1921 Interest payable January 1 and July 1 to the United States Express Company, New York. Coupon notes of $1,000. Authorized $100,000 Outstanding $90,000 This issue is owned entirely by the United States Express Company. CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Trust 4^^% Notes. Series "F" Dated August 1, 1911 Maturing $12,000 each February 1 and August 1 to August 1, 1926 Interest payable February 1 and August 1 at Bankers Trust Company, New York. Coupon notes of $1,000. Authorized $360,000 Outstanding $348,000 Provisions of The above notes mature in thirty semi-annual payments of $12,000 each, commencing Febru- issue: ary 1, 1912, and ending August 1, 1926. Security: These notes are a direct obUgation of the company and are seciu-ed by an equipment lease covering 24 postal cars, 6 steel postal cars and 11 steel baggage cars. The title to this equip- ment shall remain with the trustee until all of these notes shall have been paid, and the trustee is vested with various powers for the protection of the note holders. Trustee: Bankers Trust Company, New York. These notes were offered in October, 1911, by White, Weld & Company, New York, on a 5.00 basis. ROCK ISLAND IMPROVEMENT COMPANY Equipment Gold 43^s Dated January 3, 1905 Maturing $225,000 each January 1 and July until January 1, 1915 Interest payable January 1 and July 1 at New York. Coupon bonds of $1,000. Authorized $4,500,000 Outstanding $1,350,000 Provisions of The above bonds mature in twenty semi-annual payments of $225,000 each, commencing issue: July 1, 1905, and ending January 1, 1915. Up to June 30, 1912, $3,150,000 of these bonds had been redeemed. [ 682 ] Security: These bonds are a direct obligation of the Rock Island Improvement Company and are secured by an equipment lease covering 50 locomotives, 1,000 box cars, 475 coal cars, 500 furniture cars, 250 dump cars, 250 ballast cars, 1,500 refrigerator cars, 2 postal cars, 7 com- bination baggage and mail cars, 10 chair cars, and 10 passenger coaches. The title to this equipment shall remain with the trustee until all these bonds shall have been paid. These bonds have been ASSUMED by the Chicago, Rock Island & Pacific Railway Company. Trustee : Bankers Trust Company, New York. These bonds were offered in October, 1911, by White, Weld & Company on a 5.00 basis. ROCK ISLAND IMPROVEMENT COMPANY Equipment Gold 4Hs. Series "B" Dated November 1, 1905 Maturing $280,000 each May 1 and November 1 until November 1, 1915 Interest payable May 1 and November 1 at New York. Coupon bonds of $1,000. Authorized $5,605,000 Outstanding $1,960,000 Provisions of The above bonds mature $280,000 each in twenty semi-annual installments, commencing issue: May 1, 1906, and ending November 1, 1915. Up to June 30, 1912, $3,645,000 of these bonds had been thus redeemed. Security: These bonds are a direct obligation of the Rock Island Improvement Company, and are secured by an equipment lease covering 10 chair cars, 30 coaches, 6 smoking cars, 17 baggage cars, 2,750 box cars, 250 furniture cars, 750 stock cars, 5 mail cars, 2 baggage and mail combination cars, 6 combination baggage and passenger cars, 7 dining cars, 2 combination parlor cars, 4 combination dining and passenger cars, 5 observation library cars, 247 Hart convertible ballast cars, 3 double plow distributing cars, 58 consoUdation locomotives, 6 balanced compound passenger locomotives and 11 Pacific type locomotives. The title to this equipment shall remain with the trustee until all these bonds shall have been paid. These bonds have been ASSUMED by the Chicago, Rock Island & Pacific Railway Company. Trustee: Bankers Trust Company, New York. These bonds were offered in October, 1911, by White, Weld & Company on a 5.00 basis. [ 683 ] CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Twenty-Year Debentxire 5s Dated January 15, 1912 Maturing January 15, 193"^ Interest payable January 15 and July 15, at New York. Coupon bonds of $1,000, registerable as to principal or fully registerable. Coupon and registered bonds interchangeable. Authorized $20,000,000 Security: Outstanding $20,000,000 The above bonds are a direct obligation of the company, but are not a mortgage. The Rail- way Company agrees in its indenture not to make any new mortgage upon its railroad without including these debentures ecpiallj- with every bond issue, and secured by any such new mort- gage. It is agreed, however, that this will not prevent the renewal, extension, or refunding of any existing mortgage. Redemption: These bonds are redeemable at 105 and interest upon any interest date on 60 days" notice. Trustee: Bankers Trust Company, New York. These bonds were offered in January, 1912, by Speyer & Company on a 5.(20 basis. These bonds are considered a legal investment for savings banks in New Hampshire. Dated July 1, 1912 CHICAGO, ROCK ISLAND & PACIFIC RAILWAY Equipment Gold 4s Maturing $170,000 each January 1 and July 1 to July 1, 1927 Interest payable January 1 and July 1 at New York. Coupon notes of $1,000. Authorized $5,100,000 Outstanding $4,930,000 Security : Trustee: Up to January 1, 1913, $170,000 of these notes had been redeemed. These notes are a direct obhgation of the company and are secured under terms of a Trust Agreement covering 50 locomotives, 2 electric motor cars, 10 steel baggage cars, 10 steel combination cars, 20 mail cars, 6 dining cars, i express cars, 500 furniture cars, 2,500 box cars, 700 steel coal cars, and 200 convertible ballast cars, costing $5,557,788, of which the company paid $457,788 in cash, issuing the above notes for the balance. The title to the above-described equipment remains with the trustee until all these notes have been paid. Bankers Trust Company, New York. [ 684 ] INDEX TO BOND DESCRIPTIONS INDEX TO BOND DESCRIPTIONS Adirondack Ry. System Page First 4i^s 1942 D. & H 253 Albany & Susquehanna R. R. First 3Ms 1946 D. & H 257 Allegheny Valley Ry. General 4s 1942 Penna 608 American Dock & Improvement Co. First 5s 1921 C. R. R. of N. J 141 Aroostook County Gold 4Ks 1915 Bangor & Ar 83 Aroostook Northern R. R. First 5s 1947 Bangor & Ar 80 Atchison, Topeka & Santa Fe Ry. General 4s 1995 18 Adjustment 4s 1995 19 Transcontinental Short Line 4s 1958 20 Serial Debenture 4s 1913-1914 21 Convertible 4s 1955 21 Convertible 5s 1917 22 Convertible 4s 1960 23 Eastern Oklahoma Div. First 4s 1928 23 California-Arizona Lines First & Refunding 4i^s 1962 31 Atlanta, Knoxville & Northern Ry. First 5s 1946 L. & N 398 First Consolidated 4s 2002 " 399 Baltimore & Ohio R. R. Prior Lien 3Hs 1925 46 First 4s 1948 47 Equipment Trust 4^8 1913-1922 67 Pittsburgh, Lake Erie & West Virginia Refunding 4s 1941 50 Pittsburgh Junction & Middle Div. First 3i.^s 1925 48 Secured Notes 4Ks 1913 51 Southwestern Div. First 3^3 1925 49 Baltimore, Chesapeake & Atlantic Ry. First 5s 1934 Penna 631 [ 687 ] Bangor & Aroostook R. R. System Page First 5s 1943 78 Second 5s 1945 82 Piscataquis Div. First 5s 1943 78 Van Buren Ext. First 5s 1943 79 Medford Ext. First 5s 1937 79 Consolidated & Refunding 4s 1951 81 Washburn Ext. First 5s 1939 82 St. John River Ext. First 5s 1939 83 Equipment Trust Certificates Series " C " 84 Equipment Trust Certificates Series " D " 84 Equipment Trust Certificates Series " E " 85 Bangor & Portland Ry. First 6s 1930 D. L. & W 272 Second 6s 1932 " 272 Third 6s 1936 " 272 Battle Creek & Sturgis Ry. First 3s 1989 Mich. Cent 458 Bay City & Battle Creek Ry. First 3s 1989 Mich. Cent 459 Beaver & EUwood R. R. First 4s 1919 (called in 1912) L. S. & M. S 359 Beech Creek Extension R. R. First 33/^s 1951 N. Y. C 485 Consolidated 4s 1955 " 486 Beech Creek R. R. First 4s 1936 N. Y. C 483 Second 5s 1936 " 484 Belfast & Moosehead Lake R. R. First Sinking Fund 4s 1920 Me. Cent 429 Belleville & Carondelet R. R. First 6s 1923 111. Cent 327 Bell's Gap R. R. Consolidated Sinking Fund 6s 1913 Penna 615 Belvidere Delaware R. R. Consolidated Sinking Fund 4s 1925 Penna 621 Consolidated Sinking Fund 4s 1927 " 621 Consolidated Sinking Fund 4s 1933 " 621 Consolidated Sinking Fund S^s 1943 " 622 Boston & Albany R. R. Debenture 4s 1913 N. Y. C 502 Debenture 3i^s 1951 " 502 Debenture S^s 1952 " 503 Debenture 4s 1933 " 503 1 688 ] Boston & Albany R. R. — continued System Page Debenture 4s 1934 N. Y. C . 504 Debenture 4s 1935 " 504 Debenture 43/^s 1937 " 505 Equipment Trust 43.^s 1927 " 505 Boston & Lowell R. R. Plain 4s 1932 B. & M 102 Plain 4s 1915 " 102 Plain 4s 1916 " 103 Plain 4s 1917 " 103 Plain 4s 1918 " 103 Plain 33^s 1919 " 103 Plain 3Hs 1921 " 104 Plain 3Ks 1923 " 104 Plain 33/^s 1925 " 104 Plain 4s 1926 " 104 Plain 4s 1927 " 104 Plain 4s 1929 " 104 Plain 4Hs 1933 " 105 Boston & Maine R. R. Sinking Fund Improvement 4s 1937 98 Plain 4s 1942 98 Plain 43.^3 1944 98 Plain 3s 1950 99 Plain 3Ms 1921 99 Plain 3Ks 1923 99 Plain 33^8 1925 99 Plain 4s 1926 100 Plain 4Ms 1929 100 One Year Notes 4s 1913 117 Boston & New York Air Line R. R. First 4s 1955 N. Y., N. H. & H 533 Boston & Providence R. R. Plain 4s 1918 N. Y., N. H. & H 554 Boston, Revere Beach & Lynn R. R. First 43^s 1927 128 Boston Terminal Co. First 3Ks 1947 N. Y., N. H. & H 560 Boyer Valley Ry. First 3Ks 1923 C. & N. W 166 Branford Electric Co. First 5s 1937 N. Y., N. H. & H 542 Bridgeport Traction Co. First 5s 1923 N. Y., N. H. & H 557 [ 689 ] Bridgton & Saco River R. R. System Page First 4s 1928 Me. Cent 437 Second 4s 1928 " 438 Burlington & Missouri River R. R. Consolidated Sinking Fund 6s 1918 C. B. & Q 194 Burlington, Cedar Rapids & Northern Ry. Consolidated First 5s 1934 Rock Island 669 Cambria & Clearfield R. R. First 5s 1941 Penna 613 Cambria & Clearfield Hy. General 4s 1955 Penna 617 Canada Southern Ry. First Consolidated 5s 1962 Mich. Cent 459 Carbondale & Shawneetown R. R. First 4s 1932 111. Cent 327 Carthage & Adirondack Ry. First 4s 1981 N. Y. C 486 Carthage, Watertown & Sacket's Harbor R. R. Consolidated 5s 1931 N. Y. C 498 Cedar Rapids & Missouri River R. R. First 7s 1916 C. & N. W 169 Cedar Rapids, Iowa Falls & Northwestern Ry. First 5s 1921 Rock Island 668 Central New England Ry. First 4s 1961 N. Y., N. H. & H 558 Central Ohio R. R. Consolidated First 4i^s 1930 B. & 53 Central R. R. of New Jersey General 5s 1987 140 Equipment Trust Bonds Series "C" 143 Equipment Trust Bonds Series "D" 143 Equipment Trust Bonds Series "E" 144 Equipment Trust Bonds Series "F" 144 Chicago & Northwestern Ry. General 3i/^s and 4s 1987 156 Collateral Trust Sinking Fund 5s and 6s 1929 157 Collateral Trust Extension 4s 1926 158 Sinking Fund Debenture 5s 1933 159 Debenture 5s 1921 159 Consolidated Sinking Fuiul 7s 1915 160 Chicago & St. Louis Ry. First 6s 1915 A. T. & S. F 25 [ (if)0 I Chicago, Burlington & Quincy R. R. System Page General 4s 1958 188 Illinois Div. 33^s and 4s 1949 189 Nebraska Ext. Sinking Fund 4s 1927 190 Debenture 5s 1913 191 Iowa Div. First 4s and 5s 1919 191 Denver Ext. Collateral Trust Sinking Fund 4s 1922 192 Sinking Fund Currency Plain 4s 1921 193 Chicago, Hammond & Western Ry. First 6s 1927 L. S. & M. S 363 Chicago, Indiana & Southern R. R. Mortgage 4s 1956 L. S. & M. S 352 Chicago, Indianapolis & Louisville Ry. Refunding 6s, 5s and 4s 1947 L. & N 409 Equipment Series "A" 4lis 1913-1921 " 410 Equipment Series "B" 43^ 2S 1913-1921 " 411 Chicago, Memphis & Gulf R. R. First 5s 1940 331 Chicago, Milwaukee & Puget Sound Ry. First 4s 1949 C. M. & St. P 223 Chicago, Milwaukee & St. Paul Ry. General 4s and Sj^s 1989 212 Debenture 4s 1934 213 Chicago & Pacific Western Div. First 5s 1921 213 Dubuque Div. First 6s 1920 214 Wisconsin & Minnesota Div. First 5s 1921 215 Chicago & Missouri River Div. First 5s 1926 216 LaCrosse & Davenport Div. First 5s 1919 216 Wisconsin Valley Div. First 6s 1920 217 Chicago & Lake Superior Div. First 5s 1921 218 Terminal First 5s 1914 219 European Loan Debenture 4s 1925 222 Convertible Debenture 4} ^s 1932 224 Chicago, Rock Island & Pacific R. R. Collateral Trust 4s 2002 Rock Island 666 First 6s 1917 " 666 Chicago, Rock Island & Pacific Ry. First & Refunding 4s 1934 Rock Island 672 Choctaw, Oklahoma & Gulf Collateral Trust 4s 1913-1918 ... " 673 Debenture 5s 1932 " 684 Equipment Trust 43-^% Notes Series "A" 1913-1917 " 680 EquipmentTrust 6% Notes Series "B" 1913 " 680 Equipment Trust 41^% Bonds Series "C" 1913-1919 " 681 Equipment Trust 4K% Bonds Series "D" 1913-1925 " 681 Equipment Trust 5% Notes Series "E" 1913-1921 " 682 [ 691 ] Chicago, Rock Island & Pacific Ry. — continued System Page Equipment Trust 41/^% Notes Series "F" 1913-1926 Rock Island 682 Equipment Trust 4% Notes 1913-1927 " 684 General 4s 1988 " 667 Chicago, St. Louis & Minneapolis Ry. First 6s 1918 C, St. P. M. & 236 Chicago, St. Louis & New Orleans R. R. Consolidated S^s and 5s 1951 • 111. Cent 330 Memphis Div. First 4s 1951 " 331 Chicago, St. Paul, Minneapolis & Omaha R. R. Consolidated 6s and 3}4s 1930 234 Debenture 5s 1930 239 Chicago, Santa Fe & California Ry. First 5s 1937 A. T. & S. F 26 Choctaw & Memphis R. R. First 5s 1949 Rock Island 674 Choctaw, Oklahoma & Gulf R. R. General 5s 1919 Rock Island 673 Consolidated 5s 1952 " 675 Cincinnati & Muskingum Valley R. R. First 4s 1948 Penna 652 Cincinnati, Lebanon & Northern Ry. First 5s 1916 Penna 649 First Consolidated 4s 1942 " 649 Clearfield & Jefferson Ry. First 6s 1927 Penna 616 Cleveland, Akron & Columbus Ry. General 5s 1927 Penna 650 First Consolidated 4s 1940 " 651 Cleveland & Marietta Ry. First Sinking Fund 43/^s 1935 Penna 648 Cleveland & Pittsburgh R. R. General Sinking Fund Series "A" and "B" 43^2S 1942 .... Penna 646 General Sinking Fund Series "B" 3j^s 1942 " 646 General Sinking Fund Series "C" 3j/^s 1948 " 647 General Sinking Fund Series "D" 33^s 1950 " 647 Cleveland, Lorain & Wheeling Ry. Consolidated 5s 1933 B. & 63 General 5s 1936 " 64 Consolidated Refunding 43/^s 1930 " 64 Cleveland Terminal & Valley R. R. First 4s 1995 B. & 62 Concord & Claremont R. R. First 43^s 1914 B. & M 106 [ 692 ] Concord & Montreal R. R. System Page Mortgage Currency 4s 1920 B. & M 107 Plain 4s 1920 " 108 Plain Si^^s 1920 " 108 Connecticut & Passunipsic Rivers R. R. First 4s 1943 B. & M 107 Connecticut Lighting & Power Co. First 5s 1939 N. Y., N. H. & H 557 Connecticut Railway & Lighting Co. First & Refunding 4^8 1951 N. Y., N. H. & H 556 Connecticut River R. R. Plain 4s 1943 B. & M 109 Plain 314s 1921 " 109 Plain 3Ks 1923 " 109 Connecting Railway Co. First 4s 1951 Penna 620 Consolidated Railway Debenture 4s, 3i^s and 3s 1930 N. Y., N. H. & H. ... 551 Debenture 4s 1954 551 Debenture 4s 1955 551-2 Debenture 4s 1956 552 Cooperstown & Susquehanna Valley R. R. First 5s 1918 D. & H 259 Dakota & Great Southern Ry. First 5s 1916 C. M. & St. P 22f Danbury & Norwalk R. R. Consolidated 5s and 6s 1920 N. Y., N. H. & H .4 General 5s 1925 " ... 314 First Refunding 4s 1955 " . • 314 Delaware & Hudson Canal Co. . . 315 Pennsylvania Div. First 7s 1917 D. & H . 315 Delaware & Hudson Co. . . . 316 First & Refunding 4s 1943 332 Convertible Debenture 4s 1916 . . . 323 Equipment Debenture 4s 1913-1914 319 First Lien Equipment 4j^s 1922 326 Delaware River Railroad & Bridge Co. 318 First Sinking Fund 4s 1936 • Penna. . 320 Detroit & Bay City R. R. 325 First 5s 1931 Mich. C 321 Detroit River Tunnel Co. 320 First 43^s 1961 Mic'. 324 Dexter & Newport R. R. 324 First 4s 1917 V. 333 [ 693 ] Dexter & Piscataquis R. R. System Page First 4s 1929 Me. Cent 428 Duluth Short Line Ry. First 5s 1916 Nor. Pac 583 Dunkirk, Allegheny Valley & Pittsburgh R. R. First 41/^s 1960 N. Y. C 501 Eastern Railway of Minnesota, Northern Div. First 4s 1948 Gt. Nor 295 EUwood Short Line R. R. First 5s 1922 B. & 57 Elmira & Williamsport R. R. First 4s 1950 Penna 629 Income 5s 2862 " 630 Erie & Pittsburgh R. R. General 3}4s 1940 Penna 644 European & North American Ry. Refunding 4s 1933 Me. Cent 426 Fargo & Southern Ry. First 6s 1924 C. M. & St. P 219 Fitchburg R. R. Plain 4Hs 1914 B. & M Plain 4s 1915 " Plain 4s 1916 " ^^ Plain 4s 1920 " Plain 3J^s 1920 " (-ig Plain Si^s 1921 " Plain 4s 1925 " Plain 4s 1927 " Clevelan>i" 4s 1928 " pjjun 43^s 1928 " Cleveland &^4Ms 1932 " Gene, 4^^1933 " Gener 4s 1937 P orn & Missouri Valley R. R. (ited First 6s 1933 C. & N. W. General L Cleveland, Loraii. Consolidate ' „ ^ , ^ '40 Penna. . General 5s 1". ... ^i n , Ritchie R. R. Consolidated K<. MVP Cleveland Terminal & "^j First 4s 1995 . . Concord & Claremont R. I\ First 4^3 1914 . . . jggj [ 694 ] Mich. Cent. Greenwich & Johnsonville Ry. System ^ First 4s 1924 D. & H 260 Greenwich Tramway Co. First 5s 1931 N. Y., N. H. & H 542 Gulf, Beaumont & Kansas City Ry. First 6s 1913 A. T. & S. F 28 Second 6s and 5s 1913 " 29 Harrisburg, Portsmouth, Mount Joy & Lancaster R. R. First 4s 1913 Penna 613 Hartford, Manchester & Rockville Tramway Co. First 5s 1924 N. Y., N. H. & H 540 Hartford Street Ry. First 4s 1930 N. Y., N. H. & H 541 Debenture 4s Series " M " 1930 " .... 541 Henderson Bridge Co. First 6s 1931 L. & N 387 Hereford Ry. First 4s 1930 Me. Cent 434 Housatonic R. R. Consolidated 5s 1937 N. Y., N. H. & H 529 Huntington & Big Sandy R. R. First 6s 1922 B. & 60 Hutchinson & Southern Ry. First 5s 1928 A. T. & S. F 28 Illinois Central R. R. First 4s 1951 .' 314 First 33^s 1950 314 First 3i^s 1951 314 First 3Ks (April) 1951 315 First 3s 1951 315 Refunding 4s 1955 316 43^% Notes 1914 332 Cairo Bridge 4s 1950 323 Collateral Trust 4s 1952 319 Litchfield Div. First 3s 1951 326 Louisvalle Div. & Term. First 3Ks 1953 318 Purchase Lines First 33^s 1952 320 Omaha Div. Finst 3s 1951 325 St. Louis Div. & Term. First 3s and sy.s 1951 321 Springfield Div. First 3Hs 1951 320 Sterling Trust S^s 1950 324 Western Line First 4s 1951 324 Equipment Trust 4^8 1913-1923 333 [ 695 ] Indiana Harbor Belt R. R. System Page General 4s and 2s 1957 L. S. & M. S 362 Indiana, Illinois & Iowa R. R. First 4s 1950 L. S. & M. S 353 Indianapolis & Louisville Ry. First 4s 1956 L. & N 411 Iowa FaUs & Sioux City R. R. First 7s 1917 111. Cent 329 Iowa, Minnesota & Northwestern Ry. First 3Ms 1935 C. & N. W 165 Jackson, Lansing & Saginaw R. R. First 3i^s 1951 Mich. Cent 453 Jamestown, Franklin & Clearfield R. R. First 4s 1959 L. S. & M. S 348 Johnsonburg R. R. First 6s 1929 Penna 617 Joliet & Northern Indiana R. R. First 4s 1957 Mich. Cent 455 Junction R. R. General 33^s 1930 Penna 606 Kalamazoo, Allegan & Grand Rapids R. R. First 5s 1938 L. S. & M. S 349 Kalamazoo & South Haven R. R. First 5s 1939 Mich. Cent 454 Kalamazoo & White Pigeon R. R. First 5s 1940 L. S. & M. S 349 Kanawha & Michigan Ry. First 4s 1990 L. S. & M. S 367 Second 5s 1927 " 368 Equipment Trust 43.4s 1913-1922 " 369 Kankakee & Southwestern R. R. First 5s 1921 111. Cent 322 Kentucky Central Ry. First 4s 1987 L. & N 397 Keokuk & Des Moines Ry. First 5s 1923 Rock Island 677 Knox & Lincoln Ry. Second 5s Series "A" 1921 Me. Cent 432 Lake Erie & Western R. R. First 5s 1937 ' L. S. & M. S 354 Second 5s 1941 " 355 [ 696 ] Lake Shore & Michigan Soiitliern Ry. System Page Debenture 4s 1931 347 Debenture 4s 1928 346 First Slis 1997 346 Leamington & St. Clair Ry. First 4s 1945 Mich. Cent 460 Lehigh & Wilkes-Barre Coal Co. Consolidated 4s 191.5-1950 C. R. R. of N. J 142 Little Falls & Dolgeville R. R. First 3s 1932 N. Y. C 509 Little Rock Bridge Co. First 6s 1919 Rock Island 675 Louisville & Nashville R. R. Atlanta, Knoxville & Cincinnati Div. Mortgage 4s 1955 396 Evansville, Henderson & Nashville Div. First Sinking Fund 6s 1919 383 First 5s 1937 384 First Collateral Trust 5s 1931 395 General Sinking Fund 6s 1930 383 New Orleans & Mobile Div. First 6s 1930 . ' 388 New Orleans & Mobile Div. Second 6s 1930 389 Paducah & Memphis Div. First 4s 1946 392 Pensacola Div. First 6s 1920 389 St. Louis Property First 5s 1916 403 Southeast & St. Louis Div. First 6s 1921 394 Southeast & St. Louis Div. Second 3s 1980 394 Unified 4s 1940 382 Louisville & Nashville -Southern Ry. Joint Monon First Collateral Trust 4s 1952 L. & N 402 Louisville & Nashville Terminal Co. First 4s 1952 L. & N 399 Louisville, Cincinnati & Lexington Ry. General 43^s 1931 L. & N 386 Louisville, Henderson & St. Louis Ry. First 5s 1946 L. & N 403 Louisville, New Orleans & Texas Ry. Collateral Trust 4s 1953 111. Cent 317 Mahoning Coal R. R. First 5s 1934 L. S. & M. S 350 Maine Central R. R. Collateral Trust Sinking Fund 5s 1923 424 Consolidated Refunding 5s 1961 434 Sinking Fund Improvement Series "A" 4j^s 1916 433 Sinking Fund Improvement Series "B" 4j^s 1917 433 [ 697 ] Maine Central R. R. — continued System Page 4% Notes 1913 438 4% Notes 1914 ; 438 Maine Shore Line R. R. First 6s 1923 Me. Cent 422 Manchester & Lawrence R. R. Plain 4s 1922 B. & M 114 Manitowoc, Green Bay & Northwestern Ry. First 3l4s 1941 C. & N. W 163 Maryland, Delaware & Virginia Ry. First 5s 1955 Penna 631 McKeesport & Belle Vernon R. R. First 6s 1918 L. S. & M. S 361 Meriden Horse R. R. Consolidated 5s 1924 N. Y., N. H. & H 537 Meriden, Southington & Coniponnce Tramway Co. First 5s 1928 N. Y., N. H. & H 543 Michigan Air Line R. R. First 4s 1940 Mich. Cent 454 Michigan Central R. R. First 3}4s 1952 452 Debenture 4s 1929 456 Middletown Horse R. R. First 5s 1914 N. Y., N. H. & H 539 Milwaukee & Northern R. R. First 4Hs 1913 C. M. & St. P 221 Consolidated 6s 1913 " 222 Milwaukee & State Line Ry. First 3i^s 1941 C. & N. W 163 Milwaukee, Lake Shore & Western Ry. Ashland Div. 6s 1925 C. & N. W 172 Consolidated 6s 1921 " 170 Extension & Improvement Sinking Fund 5s 1929 " 172 Michigan Div. 6s 1924 " 171 Marshfield Ext. First 5s 1922 " 174 Milwaukee, Sparta & Northwestern Ry. First 4s 1947 C. & N. W 175 Minneapolis & St. Louis R. R. First Guaranteed 7s 1927 Rock Island 671 Minneapolis Union Ry. First 5s and 6s 1922 Gt. Nor 298 Minnesota & Iowa Ry. First 3i^s 1924 C. & N. W 168 Minnesota & South Dakota Ry. First Sj^s 1935 C. & N. W 168 [ G98 ] Mobile & Montgomery Ry. System Page First 4i^s 1945 L. & N 390 Mohawk & Malone Ry. First 4s 1991 N. Y. C 489 Consolidated Sj^s 2002 " 490 Monongahela River R. R. First 5s 1919 B. & O CO Montana Central Ry. First 5s and 6s 1937 Gt. Nor 296 Montville Street Ry. First 5s 1920 N. Y., N. H. & H 538 Morris & Essex R. R. First 7s 1914 D. L. & W 272 First Consolidated 7s 1915 " 273 First Refunding S^s 2000 " 274 Narragansett Pier R. R. First 4s 1916 N. Y., N. H. & H 561 Nashville, Chattanooga & St. Louis Ry. First 7s 1913 L. & N 404 First Consolidated 5s 1928 " 408 Centreville Branch First 6s 1923 " 408 Fayette & McMinnville Branches First 6s 1917 " 406 Jasper Branch Ext. First 6s 1923 . " 407 Lebanon Branch First 6s 1917 " 406 Tracy City Branch First 6s 1913-1917 " 405 Nashville, Florence & Sheffield Ry. First 5s 1937 L. & N 391 Naugatuck R. R. First 4s 1954 N. Y., N. H. & H 533 Debenture Sj^s 1930 " .... 528 New England R. R. Consolidated 4s and 5s 1945 N. Y., N. H. & H 545 New Haven & Centerville Street Ry. First 5s 1933 N. Y., N. H. & H 536 New Haven & Derby R. R. Consolidated 5s 1918 N. Y., N. H. & H 532 New Haven & Northampton Co. Refunding Consolidated 4s 1956 N. Y., N. H. & H 546 New Haven Street Ry. First 5s 1913 N. Y., N. H. & H 535 Consolidated 5s 1914 " .... 536 New Jersey Junction R. R. First 4s 1986 N. Y. C 493 [ 699 ] New London Street Ry. System Page First 5s 1923 N. Y., N. H. & H 539 Newport & Cincinnati Bridge Co. General 4i^s 1945 L. & N 385 Newport & Richford R. R. First 5s 1941 B. & M 105 New York & Harlem R. R. First 33/^s 2000 N. Y. C 490 New York & Long Branch R. R. First 4s and 5s 1941 C. R. R. of N. J 142 New York & Northern Ry. First 5s 1927 N. Y. C 491 New York & Putnam R. R. First Consolidated 4s 1993 N. Y. C 492 New York Central & Hudson River R. R. First 33/^s 1997 478 Lake Shore Collateral Trust 33^s 1998 479 Michigan Central Collateral Trust Sj^s 1998 480 Debenture 4s 1934 481 Debenture 4s 1942 506 43^% Notes 1914 482 414% Notes 1915 483 New York Central Lines Equipment Trust (1907) 5s 1913-1922 N. Y. C 506 Equipment Trust (1910) 4i/^s 1913-1925 " 507 Equipment Trust (1912) 43^s 1913-1927 " ■ 507 Equipment Trust (1913) 43^s 1914-1928 " 508 New York, Chicago & St. Louis R. R. First Sinkmg Fund 4s 1937 L. S. & M. S 356 Debenture 4s 1931 " 357 New York, Lackawanna & Western Ry. First 6s 1921 D. L. & AV 275 Construction 5s 1923 " 276 Terminal & Improvement 4s 1923 " 277 New York, New Haven & Hartford R. R. Harlem River & Port Chester First 4s 1954 528 Convertible Debenture 6s 1948 547 Convertible Debenture Certificates Sj^s 1956 548 Non-convertible Debenture 4s 1914 548 Non-convertible Debenture 4s and 33^s 1947 549 Non-convertible Debenture 33^s 1954 549 Non-convertible Debenture 4s 1955 549 Non-convertible Debenture 4s 1956 550 5% Notes 1913 550 European Loan 4s 1922 551 [ 700 ] New York, Philadelphia & Norfolk R. R. System Page First 4s 1939 Penna 632 4% Stock Trust Certificates 1948 " 610 Income 4s 1939 " 633 New York, Providence & Boston R. R. General 4s 1942 ' N. ¥., N. H. & H 529 New York, Westchester & Boston Ry. First 4Hs 1946 N. ¥., N. II. & H 558 Nodaway Valley Ry. First Sinking Fund 7s 1920 C, B. & Q 197 Northern Central Ry. Consolidated General 43/2S Series "E" 1925 Penna 627 Second General 5s 1926 " 628 Northern Maine Seaport R. R. Railroad & Terminal First 5s 1935 Bangor & Ar 80 Northern Ohio Ry. First 5s 1945 L. S. & M. S 355 Northern Pacific -Great Northern C, B. & Q. Collateral .loint 4s 1921 Nor. Pac 585 Northern Pacific Ry. Prior Lien 4s 1997 576 General Lien 3s 2047 577 St. Paul-Duluth Div. 4s 1996 579 Northern Wisconsin Ry. First 6s 1930 C, St. P., M. & 237 Northwestern Union Ry. First Sinking Fund 7s 1917 C. & N. W 164 Norwich & Worcester R. R. Debenture 4s 1927 N. Y., N. H. & H 555 Norwich Street Ry. First 5s 1923 N. Y., N. H. & H 538 Norwood & Montreal R. R. First 5s 1916 N. Y. C 496 Ohio & Little Kanawha R. R. First 5s 1950 B. & 65 Ohio River R. R. First 5s 1936 B. & 58 General 5s 1937 " 59 Old Colony R. R. Plain 4s 1938 N. Y., N. H. & H 552 Plain 4s 1924 " .... 553 Plain 4s 1925 " .... 553 Plain Sy^s 1932 " .... 553 [ 701 ] Oswego & Rome R. R. System Page First 7s 1915 N. Y. C 499 Second 5s 1915 " 500 Oswego & Syracuse R. R. Construction 5s 1923 D. L. & W 277 Oswego Railroad Bridge Co. First 6s 1915 N. Y. C • . . 496 Pawtuxet Valley R. R. First 4s 1925 N. Y., N. H. & H 544 Pennsylvania & Northwestern R. R. General 5s 1930 Penna 614 Pennsylvania Co. First 4Hs 1921 Penna 636 Series "A" Trust Certificates 3i^s 1937 " 637 Series "B" Trust Certificates 3Ms 1941 " 638 Series "C" Trust Certificates 3 J^s 1942 " 638 Series "D" Trust Certificates 31/^8 1944 " 639 Series "E" Trust Certificates 4s 1952 " 640 Collateral Sj^s 1916 " 640 Collateral 4s 1931 " 641 French Franc Certificates S^^s 1921 " 642 Pennsylvania R. R. Consolidated 5s 1919 600 Consolidated 4s 1943 600 Consolidated 33^s 1945 600 Consolidated 4s 1948 600 Collateral Trust Sinking Fund 43^s 1913 611 Convertible 33/^s 1915 " 611 Real Estate Purchase Money 4s 1923 612 Penobscot Shore Line R. R. First 4s 1920 Me. Cent 422 Pensacola & Atlantic R. R. First 6s 1921 L. & N 393 Peoria & Northwestern Ry. First 3i^s 1926 C. & N. W 167 Peterborough & Hillsborough R. R. First 4Ms 1917 B. & M 106 Philadelphia & Erie R. R. General 4s, 5s and 6s 1920 Penna 607 Philadelphia, Germantown & Chestnut Hill R. R. First 43^s 1913 Penna 620 Philadelphia, Wilmington & Baltimore R. R. Stock Trust Certificates 4s 1921 Penna 609 [ 702 ] Pine Creek Ry. System Page First 6s 1932 N. Y. C 487 Pittsburgh & ConnellsviUe R. R. First 4s 1946 B. & O .51 Pittsburgh & Lake Erie R. R. First 6s 1928 L. S. & M. S ;{.58 Second 5s 1928 " 3.58 Pittsburgh & Western Ry. First Consolidated 4s 1917 B. & 55 Pittsburgh, Cleveland & Toledo R. R. First 6s 1922 B. & 57 Pittsburgh Junction R. R. First 6s 1922 B. & 54 Second 5s 1922 " 55 Pittsburgh, McKeesport & Youghioghony R. R. First 6s 1932 L. S. & M. S 360 Second 6s 1934 " 360 Pittsburgh, Newcastle & Lake Erie R. R. First Extended 4s 1917 B. & 56 Pittsburgh, Virginia & Charleston Ry. First 4s 1943 Pcnna (i02 Pittsburgh, Youngstown & Ashtal)ula R. R. First Consolidated 5s 1927 Penna 643 Pittsburgh, Youngstown & Ashtabula Ry. First Series "A" 4s 1948 Pcnna 642 Portland & Ogdensburg Hy. First 4Ks 1928 Me. Cent 430 Portland & Rumford Falls Ry. Consolidated First 4s 1926 Me. Cent 427 Debenture Sinking Fund 4s 1927 " 435 Collateral Trust 4s 1934 " 43(1 Portland Street Ry. First 5s 1916 N. Y., N. H. & II 540 Portland Terminal Co. First 4s 1961 Me. Cent 439 Portsmouth, Great Ealls & Conway R. R. First 4}4s 1937 B. & M 100 Prescott & Eastern R. R. First 5s 1928 A. T. & S. F 30 Princeton & Northwestern Ry. First 3i^s 1926 . . . " C. & N. W 166 Providence & Springfield R. R. First 5s 1922 N. Y., N. H. & II 532 Providence & Worcester R. R. First 4s 1947 N. Y., N. H. & II 554 [ 70:5 ] Providence Securities Co. System Page Debenture 4.s 1957 N. Y., N. H. & H 559 Providence Terminal Co. First 4s 1950 N. Y., N. H. & H BM Raquette Lake Ry. First 5s 1950 N. Y. C 510 Ravenswood, Spencer & Clciivillo Ry. First 6s 1920 B. & O f.G Rensselaer & Saratoga R. R. First 7s 1921 D. & H 259 Republican Valley R. R. First Sinking Fund 6s 1919 C, B. & Q 195 Rock Island & Peoria Ry. Consolidated First 6s 1925 Rock Island 070 Rock Island, Arkansas & Louisiana R. R. First 43^s 1934 Rock Island 676 Hot Springs Western 4s 1939 " 677 Rock Island Improvement Co. Equipment 4i/^s 1913-1915 Rock Island 682 Equipment 41/^s Series "B" 1913-1915 " 683 Rome, Watertown & Ogdensburg R. R. First Consolidated 5s, 4s and SUs 1922 N. Y. C 494 Terminal R. R. First 5s 1918 " 498 Rumford Falls & Rangeley Lakes R. R. First Sinking Fund 5s 1937 Me. Cent 436 St. Johnsbury & Lake Champlain R. R. First 5s 1944 B. & M 115 St. Lawrence & Adirondack Ry. First 5s 1996 N. Y. C 508 Second 6s 1996 " 509 St. Louis Southern R. R. First 4s 1931 111. Cent 328 St. Paul & Duluth R. R. First 5s 1931 Nor. Pac 580 Second 5s 1917 " 581 First Consolidated 4s 1968 " 581 St. Paul & Kansas City Short Line R. R. First 43^8 1941 Rock Island 679 St. Paul & Northern Pacific Ry. First 6s 1923 Nor. Pac 577 St. Paid & Sioux City R. R. Fir.st6sl919 C. St. P., M. & 238 I 704 1 St. Paul, Minneapolis & Manitoba lly. System Page Consolidated Sinking Fund fis, 43, 2S ami 4s 1!):53 (it. Nor 292 Montana Ext. First 4s 1937 " 203 Pacific Ext. First 4s 1940 " 294 San Francisco & San Joaquin Valley Ry. First 5s 1940 A. T. & S. F 24 Santa Fe, Prescott & Plioenix Ry. First 5s 1942 .\. T. & S. F 27 Saranac & Lake Placid R. R. First 5s 1913 D. & H 258 Sault Ste. Marie & Southwestern Ry. First 5s 1915 C, St. P., M. & 235 Schenectady & Duanesburgh R. R. First 6s 1924 D. & H 254 Schuylkill River East Side R. R. First 4s 1925 B. & 52 Sioux City & Pacific R. R. First 3}is 1936 C. & N. W 161 Sodu.s Bay & Southern R. R. First 5s 1924 Pcnna 630 Somerset Railway First 5s 1917 Me. Coiil 430 Consolidated 4s 1950 " 431 First & Refunding 4s 1955 " 431 South & North Alabama R. R. Consolidated 5s 1936 L. & N 400 South West Pennsylvania Ry. First Sinking Fund 7s 1917 Peniui OOR Si)okane Falls & Northern Ry. First 6s 1939 Gt. Nor 299 Spuyten Duyvil & Port Morris R. R. First 33^s 1959 N. Y. C 481 Stafford Springs Street Ry. First 5s 1956 N. Y., N. H. & H 546 Sturgis, Goshen & St. Louis Ry. First 3s 1989 L. S. & ]\I. S 351 Sullivan County R. R. First 4s 1924 B. & M 116 Sunbury & Lewiston Ry. First 4s 1936 Penna 604 Sunbury, Hazelton & Wilkes-Barre Ry. First 5s 1928 Penna 602 Second 6s 1938 " 603 Superior Short Line Ry. First 5s 1930 C, St. P., M. & () 239 [ 705 ] Syracuse, Phoenix & Oswo.i^'o II. R. System Page First 6s 1915 N. Y. C. 407 Tarkio Valley R. R. First Sinking Fund 7.s 1920 ('., 13. & Q 196 Taylor's Falls & Lake Superior R. R. First 6s 1914 Nor. Pac 582 Toledo & Ohio Central Ry. First 5s 1935 L. S. & M. S 363 Western Div. First 5s 1935 " 3G4 General 5s 1935 " 365 St. Mary's Div. First 4s 1951 " 366 St. Mary's Div. First Income 4s 1951 " 366 Equipment Trust Notes " 367 Toledo, Canada Southern & Detroit Ry. First 4s 1956 Mich. Cent 457 Toledo, Walhonding Valley & Ohio R. R. First 4>^s Series "A" 1931 Penna 645 First 4Hs Series "B" 1933 " 645 First 4s Series "C" 1942 " 645 Toronto, Hamilton & Buffalo Ry. First 4s 1946 N. Y. C 510 Second 4s 1946 " 511 Torrington & Winchester Street Ry. First 5s 1917 N. Y., N. H. & H 543 Troy & Boston R. R. Fir.st7sl924 B. & M 113 United New Jersey Railroad & Canal Co. General 4s 1923 Pcinia 618 General 4s 1929 " 018 General 4s 1944 " 618 General 3^3 1951 " 618 General 4s 1948 "' 619 Upper Coos R. R. First 4s 1930 Me. Cent 425 Extension 43^s 1930 ' " 425 Utica & Black River R. R. First 4s 1922 N. Y. C 500 Vermont & Massachusetts R. R. Plain 33/^s 1923 B. & M 114 Vermont Valley R. R. First 4i^s 1940 B. & M 116 Warren R. R. First KrfiMidiriK.'Ii^s 2000 D. L. & W 278 [ 7UG J Wasliington & Cohnnhia River Ry. System Page First Is 1935 Nor. Pac 584 Washington Central Ry. First 4s 1948 Nor. Pac 584 Washington County Ry. First 3}is 1954 Me. Cent 423 West Chester R. R. First 5s 1919 Peiiiia G05 West Jersey & Seashore R. R. First Consolidated Sinking Fund 33/2S and 4s 1930 Pcnna 626 West Shore R. R. First 4s 2361 N. Y. C 494 West Virginia & Pittsburgh R. R. First 4s 1990 15. & 61 Western New York & Pennsylvania Ry. First 5s 1937 Penna 624 General 4s 1943 " 624 Income 5s 1943 " 625 Western Pennsylvania R. R. Consolidated 4s 1928 Penna 605 Western Railway of Alaliama Consolidated First 4^2^ li^l8 L. & N 401 Wheeling Terminal Ry. First 4s 1940 Penna 651 White & Black River Valley R. R. First 5s 1980 Rock Island 678 Willniar & Sioux Falls Ry. First 5s 1938 Gt. Nor 297 Winona & St. Peter R. R. First Sinking Fund Ext. 7s 1916 C. & N. W 174 Worcester & Connecticut Eastern Ry. First 41-is 1943 N. Y., N. H. & H 535 Worcester, Nashua & Rochester R. R. First 4s 1935 B. & M 101 First 4s 1930 " 101 First 4s 1913 " 101 First 4s 1934 " 101 [ 707 RETURN TO the circulation desl< of any University of California Library or to the NORTHERN REGIONAL LIBRARY FACILITY Bldg. 400, Richmond Field Station University of California Richmond, CA 94804-4698 ALL BOOKS MAY BE RECALLED AFTER 7 DAYS • 2-month loans may be renewed by calling (510)642-6753 • 1-year loans may be recharged by bringing books to NRLF • Renev^/als and recharges may be made 4 days prior to due date. DUE AS STAMPED BELOW ^iAY 7 200G DEC1120D7 271805 UNIVERSITY OF CALIFORNIA LIBRARY iiiiiii