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CANADIAN RAILWAYS.

(From the World, April 24.)

The directors’ reports of the two great Canadian lines—the Grand Trunk and the Great Western of Canada—which have just been issued, are satisfactory documents. Satisfaction where these lines are concerned’ is, of course, a relative term ; but the shareholders have been accustomed to such meagre fare, that they will be grateful- for the smallest mercies. There are increases in the receipts of both lines, while the working expenses have been reduced on both ; and the Great Western people get so far as to bo able to pay a small dividend on the ordinary shares, while the Grand Trunk propose a 8 per cent, dividend on the first' preferences. These results must be pronounced exceedingly satisfactory, in view of the post history of both companies, if, on a minute examination of-the accounts, there are no elements of doubtful financing or mysterious transfers, such as have been noted on some | former occasions. For the present we must content ourselves with calling attention to one feature of the of the Great Western Kail way Company of Canada. The directors give in an appendix the "agreement entered into between the London Bondholders’ Committee, the Great Western, and the bond holders of the Detroit and Milwaukee Railway, which is to bo submitted to the shareholders for their confirmation at their meeting on Tuesday, the 30th lust.

It is proposed to purchase this Detroit Railway, with a view to the reorganisation of the company, and the acquisition of shares and guarantee of bonds of the reorganised company by the Great Western of Canada. This is an agreement which should be most closely scanned by the shareholders: of the latter company. The Detroit and Milwaukee Railway, as a correspondent rightly remarks, has been in a state of such utter rottenness for some years that it has not been able to pay fully the interest duo to its first bondholders. For the Great Western .of Canada to take such a line on the terms proposed would be folly. It it not worth accepting as a gift; for tbe Groat Western will have to pay the guaranteed interest of the first and second bondholders, and it is doubtful if the Detroit and Milwaukee line will bo able to pay its own working expenses. Besides this there is the point we have before alluded to as to whether, under the American Constitution, agreements and amalgamations with a “ foreign ’’ corporation are legal. Our correspondent, however, seems to exaggerate in what ho says about the effects of the exceptional conditions that have been so favorable to tbe traffics of both tbo Canadian and the United States railways during the last year—the scanty , harvest on this side and the abundant yield of breadstuff® on the other, the combination of the American and Canadian railways to raise the freightage rates, and the monopoly of the grain trade that accrued to America in consequence of the blockade of the Black Sea ports. No doubt all these causes have helped the railway traffics across the Atlantic. But on the other hand there have been exceptional drawbacks. The strikes last summer on the American continent and the consequent disorganisation, And the extreme depression of general business in both Canada and the States, have all to be taken into account, We see no cause to despair of good times oomingjfor American railways that resist the temptation to indulge in reckless financing and make no attempt to ■ pay dividends out of capital. But the widening of the Welland Canal by the Dominion Government, so that ships of heavy burden may pass into thelakes from tho St. Bawrence, will materially affect the traffics of the Canadian lines. Even without that, the Great Western people will be taking a leap in the dark if they agree to this absorption of a worthless line, and the proprietors will do well to interpose for the protection of their property before it is too late.

Permanent link to this item
Hononga pūmau ki tēnei tūemi

https://paperspast.natlib.govt.nz/newspapers/NZTIM18780615.2.24.16

Bibliographic details
Ngā taipitopito pukapuka

New Zealand Times, Volume XXXIII, Issue 5372, 15 June 1878, Page 2 (Supplement)

Word count
Tapeke kupu
658

CANADIAN RAILWAYS. New Zealand Times, Volume XXXIII, Issue 5372, 15 June 1878, Page 2 (Supplement)

CANADIAN RAILWAYS. New Zealand Times, Volume XXXIII, Issue 5372, 15 June 1878, Page 2 (Supplement)

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