Bond Offering by the Central Pacific Railroad in the 1873 "Railway Times"

Bond Offering by the Central Pacific Railroad in the 1873 “Railway Times.”. Click on image to enlarge it. — George P. Landow

In Bonds to Bearer of 1,000 Dollars each. Principal and Interest payable in gold at New York, or at the option of the Holder in sterling in London, at the Oﬁee of Messrs. Speyer Brothers, at the rate of 4s. 1d. per Dollar. Principal payable on the 1st January, 1892; Interest at 6 per Cent. per Annum from the 1st January, 1873, payable Half-yearly on the 1st July and 1st January. Messrs. SPEYER BROTHERS are authorised to RECEIVE SUBSCRIPTIONS for the above BONDS. The Issue Price is 79 1/2 per Cent. at 4s. 6d. per dollar, equal to £178 17s. 6d. per Bond of $1,000; payable as follows :——

20 per c., or £45 0 0 per bond of $1,000 on allotment
30 per c., or £67 10 0 per bond of $1,000 on April 24th
20 per c., or £66 7 6 per bond of $1,000 on May 2nd
79 1/2 per c. [or] £178 17 6.

Allottees may anticipate instalments under discount at the rate of 4 per cent. per annum.

The Central Paciﬁc Railroad Company is the corporate name of an amalgamation of the Central Pacific Railroad Company of California, and other Railway Companies, forming, according to an official statement of the Company, dated lst November, 1872, a network of Railways, of which about 1,218 miles are actually in operation.

The present issue is specially secured by a ﬁrst mortgage on the California and Oregon Railroad, which was consolidated with the Central Paciﬁc Railroad in August, 1870. The California and Oregon Railroad runs from the main Line in the Sacramento Valley to the southern boundary line of the State of Oregon, a distance of about 380 miles, of which, according to the above-mentioned Ofﬁcial statement, 151 miles are constructed and in operation.

The Railroad system of the Company furnishes one of the most important links of connection between the Paciﬁc and Atlantic Oceans. The importance of its property and trafﬁc and the high reputation and ability of its administration have secured to the Central Paciﬁc Railroad Company a leading position among the great Railways of the United States.

According to the ofﬁcial statement of the Company, the amount of Capital Stock of the Central Paciﬁc Railroad Company issued is $54,275,500, represented by 542,755 shares of $100 each, all fully paid. The land grants of the Company, according to the same statement, are upwards of 13,000,000 acres, subject only to a mortgage of $10,000,000. The amount of First Mortgage Bonds authorised on the California and Oregon Railway is $10,000 per mile, equal to a total of about $13,200,000; of this amount $6,000,000 have been issued, Principal and Interest payable in New York only. The present issue of $2,000,000, the Principal and Interest of which are, by a resolution of the Board of Directors, payable in London, at the Office of Messrs. Speyer Brothers, at the rate of 4s. 1d. per dollar, forms part of the remaining $7,200,000. The balance, according to the mortgage deed, can only be issued as the works progress.

The Report of the Financial Agency of the Company, dated January 2nd, 1873, shows that the net earnings of the Line for the year 1872 amounted to $7,185,000. The same Report also shows that the annual Interest on the whole outstanding Bonded Debt, adding thereto the Interest on the present il-ne, and the remaining Bonds authorised to be issued on the same division when completed, and the interest on the unissued Bonds of the San Francisco, Oakland, and Alameda Railrond amounts to about $4,107,000, thus leaving the large surplus of $3,358,000. In this calculation the Interest on the issue of $1,500,000 Central Paciﬁc State Aid Bonds is not included, this Interest being paid by the State of California.

A copy of the Bond is printed below.

Applications must be made on the annexed Form.

The Allotment of the Loan will be made as early as possible after the subscription is closed; and in cases where no answer to applications is returned, it will be understood that it has not been practicable to make any allotment.

In default of payment of the sum due on allotment, or any subsequent instalments, the allotments and all payments Wlll be subject to forfeiture. Upon payment of the Deposit on Allotment, Scrip Certiﬁcates to bearer will be issued, which will be exchanged for definitive Bonds as soon as ready after the issue price is paid up.

The Official Statement and the Report of the Financial Agency, referred to above, the Mortgage Deed, and a certiﬁed copy of the Articles of Consolidation, of August, 1870, can be inspected by intending Subscribers, at the Ofﬂice of Messrs. Freshﬁelds, 5, Bank-buildings E.C.1, Angel-court, London, E.C., February 26, 1873.

(Copy Bond. Series B. No. 1,000 CENTRAL PACIFIC RAILROAD COMPANY OF CALIFORNIA)

The Central Paciﬁc Railroad Company, successor by consolidation to the California and Oregon Railroad Company, acknowledges that it owes to D. Ogden Mills, of the city of San Francisco, in the State of California or to the holder hereof, the sum of one thousand dollars, which sum it promises to pay to the holder hereof, in the city of New York, on the 1st day of January, 1872, with interest thereon nt the rate of six per cent. per annum, payable semi-annually oh the 1st day of July, 1872, and on the 1st day of January and July of each year thereafter in the city of New York, upon the surrender of the annexed Coupons, both principal and interest payable in gold coin of the Dnited States at par dollar for dollar.

This Bond is one of the Series B of First Mortgage Bonds, consisting of seven thousand and two hundred Bonds, each of the same amount and date, the payment of all of which is secured by a First Mortgage, bearing date on the 1st day of anunry, 1869, executed by the said California and Oregon Railroad Company prior to said consolidation upon the whole of its Railroad from Roseville, on the Central Paciﬁc Railroad, in the Sacramento Valley, in the County of Placer, in the State of California, to the southern boundary line of the State of Oregon, and the rolling stock, ﬁxtures, and franchises thereof to David S. Dodge and Eugene Kelly, of the City of New York, as trustees for the holders of the several series of Bonds secured thereby, which said Railroad, rolling stock, ﬁxtures, and franchises now constitute by consolidation as aforesaid the California and Oregon Division of the said Central Paciﬁc Railroad; and the said Bonds of this series are issued and to be issued, under and in virtue of the provisions of the said original Mortgage executed by the California and Oregon Railroad Company, in order to provide funds for the construction, completion, and equipment of the said Railroad embraced in and covered by said Mortgage.

The payment of this Bond is also secured by a Sinking Fund to be provided by setting apart in the year 1876, and each year thereafter, from the net income of said Railroad, the sum of one hundred thousand dollars, to be applied, with the Interest thereon, to the redemption or payment of said Bonds, the same being irrevocably pledged for that purpose. The holder of any of the Bonds constituting this series or Series A, consisting of Six Thousand Bonds of the California and Oregon Railroad Company heretofore issued, has no preference or priority over any other holder of any of said Bonds of either of said series, which two series include all of the Bonds to be issued under said Mortgage. In testimony whereof the said Central Paciﬁc Railroad Company has caused its corporate seal to be hereunto afﬁxed, and the same to be signed by its President and Secretary on this 1st day of January, 1872.

President.
Secretary.

Related material: Other Bond Offerings in 1873

Bibliography

Railway Times. 36 (1873): 240. Hathi Trust online version of a copy in the University of Michigan Library. Web. 4 September 2018.

Last modified 5 September 2018