Source: The Daily Mining Journal
Marquette, Mi.
July 15, 1888 Monday

South Shore Sold

Lake press dispatches confirm the rumored sale of a con-
trolling interest in the DSS&A to the CPR, or rather to the
capitalists most interested in the latter road. All the
light that can be thrown on the situation is given in the
following rewspaper comments. The Detroit Evening Journal
interviewed President McMillan Saturday with the following
results:

"All I can say", Mr. McMillan said, “is that there are
$20,000,000 invested in this road. New York stockholders
found it necessary ‘to get in strong parties to insure suc-
cess. Sir George Stevens, general manager Van Horne, Sir
Donald Smith and other CPR people with large means have
bought a considerable block of stock in the South Shore and
expect to come into the management. Of the details and plans
I know little, and will not until a meeting ef the directors
to be held in New York in about ten day:

"The CPR has a controlling interest then?"

"I can't tell until I go to New York, but that is their
expectation."

"Of whom was the stock bought?"

“Principally of the New York holders. Detroit holders sold
some but not very much."

"This deal will leave the MC without a feeder at the straits
will it not?"

"I don't think it will make any difference with the MC and
the GR&I. I am assurred that the old policy of the road will
be continued - that is, that the MC will continue to do the
share of business which naturally comes to it. Here is the
matter about as I understand it."

(Mr. McMillan here referred to the New York article pub-
lished below.)

To the Detroit News, President McMillan said:

"The majority of the DSS&A stock has all along been owned
in New York, and it wags a portion of this stock that the re-
presentatives of the CPR bought. I don't know just the amount
they purchased; still I guess they have secured enough to have
a voice in the management of the road. I will not know, pos-
itively, until after the meeting to be held on the 20% of this
month, how much of the stock the New York directors sold."

“Will the traffic arrangement affect the MC at the Straits?"

"No, the Central will continue to make connections over the
South Shore as heretofore. There will not in fact be any change
in the policy of the road so far as I am aware at present. Yes
it is a blow to the GT and rather disorganizes that road's plans."

As reported from Wall street the following are the circumstancws
attending the sale:

The announcement made today that the CPR had obtained prac-
tical control of the DSS&A brought to the surface details of
the transaction. Although the securities of this concern

 
Pe 2 South Shore sold... July 16, 1888 _

have not yet figured largely in the dealings on the stock ex-
change, the deal has a much more important bearing up on the
entire market for railway securities than appears on first sight.

Sir George Stephens, Sir Donald Smith and their associates in
the management of the CPR. The negotiations in their behalf
were conducted through their representatives here, Messers.
Morton, Bliss & Co., while the sellers were represented by
Messers Calvin S. Brice and Samuel Thomas, who have been fore-
most in the construction of the road. Brice and Thomas have
not, however, closed out their interest in the property. They
contributed a portion of the common and preferred stock which
was necessary to make up a majority of each class, but still
retain a large monied interest in the road. The principal
sellers are understood to have been George I. Seney and the
Detroit interest in the property includes that of James
McMillan, president of the company. The prices paid for the
two classes of stock were somewhat above the current market
prices. It is understood $10 per share was paid for the com-
mon and $26 for the preferred stock. The transaction was
really completed a week ago by a cash payment in full. The
first comment of Wall street upon this change of ownership was
that it would increase the difficulties of the American roads,
hampered as they are by the interstate commerce law, in their
competition with the CPR. It is learned, however, from excel-
lent authority that this purchase is incidental to a comprehen-
sive plan for the establishment of absolutely harmonious re-
lations between the CPR and the Northern and Union Pacific com-
panies. It is the intention of the new owners of the South
Shore to maintain it as an independent corporation, and they
will seek to attract busines to it from all sources, and also
permit business over it to flow into its natural channels. So
far as the NP is concerned, it will derive the advantage of a
line of through east-bound traffic with the CPR, and in return
will hand over its traffic at Duluth to the new CPR tributary.
The DSS&A and the CPR will derive the advantage of hauling some
of this traffic, not only over the DSS&A, but over its main
line east of S. S. Marie. The UP will become a party to the
arrangement dividing business and maintaining rates because of
it outlet to the Pacific Northwest over the Oregon Short Line
and Oregon Ry. & Navigation roads. It should be stated in
conclusion that although Brice and Thomas will remain in man-
agement of the company, the financiering as well as the oper-
ation of the road will be conducted by the new interests. A
considerable sum of money will be required to complete the road,
and this will be furnished by the GPR interests.

It will be seen from these circumstances together with the
fact that the purchasers have paid above market price for their
large holdings of stock, that it will manifestly be for their
interests to do everything in their power to make the property
a remunerative one, and as a large part of the traffic is as-
surred by the plans referred to, the necessity for cutting rates
is rather reduced. Besides all these considerations, the man-
agers have substantially promised that the road will not be a
disturbing factor. They claim, on the contrary, that the dis-
position that has been made of it will promote peace, both in
the northwest and between the transcontinental lines

 
p- 3 South Shore sold . . . July 16, 1888

Notes

Speaking of the sale the New York Mail and Express says:

This will give the CPR a connection with the lines extend-
ing northwest and southwest into Dakota, and in connection with
its ownership of the Soo will still further complicate matters
under the interstate commerce act, for the CPR can make such
rates as it chooses without interference on the part of the
commission. This is the first case in which an American road
has found it more profitable to accept foreign protection than
to undertake to work under the stringent provisions of the in-
terstate commerce act. :

Mr. Calvin S. Brice says, "Parties connected with the CPR
have purchased a controlling interest in the DSS&A stock. Gen-
eral Thomas and myself co-operating with and remaining with the
enterpris

 

DSS&A
Sam Breck