by the accountants and the committee of appraisal from the books of such vendors and from the condition of their plants and otherwise, and in default of information to the contrary it shall be assumed that they have expended in repairs a sum equal to 3 per cent. of the value of their respective plants.

Having by the foregoing methods, ascertained the earnings, there shall thereupon be deducted from the average annual earnings of each vendor for said period, a sum equal to 5 per cent. (5%) of the value of the land and plant sold and completed prior to the last date of the five and one-half years or other period applicable to such vendor, and the balance of said average annual earnings so ascertained shall be deemed for the purposes of this agreement the net profits of the respective vendors to be severally multiplied by ten as aforesaid.

Provided, however, that in case it shall be found that the aforesaid. multiplier of ten will produce a grand aggregate of common stock greater in amount than the grand aggregate of preferred stock, the Executive Committee shall choose such lower multiplier as will limit the grand aggregate of common stock.

Provided, further, that in the event that the grand aggregate of the average annual net earnings of the vendors, ascertained as aforesaid, shall be found to exceed 12 per cent. of the total value of the tangible property, then said Executive Committee in its discretion may choose such multiplier as will fix the volume of common stock as closely as may be at an amount upon which such past net earnings would show 6 per cent. applicable to dividends upon such common stock after providing for the dividend on the preferred stock.

And thereupon such newly chosen multiplier (whatever the same may be) shall be the multiplier to be used in the case of each vendor.

THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY

GRAND CENTRAL TERMINAL

NEW YORK, December 15, 1911.

To the Holders of The New York Central and Hudson River Railroad Company's Three and One-half Per Cent. Gold Bonds, Lake Shore Collateral:

Under the indenture, dated February 4, 1898, executed by The New York Central and Hudson River Railroad Company and the Guaranty Trust Company of New York, as Trustee, pursuant to which the above-mentioned bonds were issued, the Lake Shore & Michigan Southern Railway Company may be consolidated with the New York Central, or any other company may be consolidated with the Lake Shore, upon such terms as may be approved by the holders of threequarters of said bonds; but in case of any such consolidation, these bonds and certain other bonds of the New York Central of a similar issue not exceeding in amount $21,550,000 (the latter being the three and one-half per cent. gold bonds of this company for which stock of the Michigan Central Railroad Company is pledged as collateral) shall be secured by a mortgage upon the railroad of the New York Central, as provided in Section 5 of Article Two of the indenture, next in rank and second only to its existing general mortgage, dated June 1, 1897, securing an authorized issue of $100,000,000 of bonds, and in connection with any such consolidation of the Lake Shore and the New York Central, no lien or charge shall be created or incurred except in subordination and subjection to the prior claim, lien and charge of the Lake Shore collateral bonds.

The New York Central owns more than 90 per cent. of the stock of the Lake Shore, and it is thought that it may be desirable to consolidate the two companies, and to include in such consolidation certain others of the New York Central Lines.

As a preliminary step, your consent is requested pursuant to the provisions of the indenture securing your bonds.

Such consent being given, before making use of it, the New York Central will secure these bonds and also the Michigan Central collateral bonds above referred to by executing a mortgage upon the railroad now owned by it, second only to its existing general mortgage, and in that connection will pay the mortgage tax, which will entitle your bonds to the exemption provided for in the existing mortgage tax laws of the State of New York.

In that connection and in order to facilitate such Michigan Central consolidation as may hereafter be decided on, the holders of the Michigan Central collateral bonds are asked to give their consent to the consolidation of the Michigan Central with the New York Central, or its successors, or with any other railroad company or companies now or hereafter of the New York Central System, which consolidation may be made presently or at any future time.

Such consent being given, before making use of it, the New York Central will secure these bonds and also the Lake Shore collateral bonds above referred to by executing a mortgage upon the railroad now owned by it, second only to its existing general mortgage, and in that connection will pay the mortgage tax, which will entitle your bonds to the exemption provided for in the existing mortgage tax laws of the State of New York.

The indenture by which your bonds are secured provides that the amount and numbers of coupon bonds held by any person executing any request of other instrument as a bondholder and the date of holding the same may be proved by the certificate of any trust company bank, bankers or other depositary, if such certificate shall be deemed by the Trustee to be satisfactory, showing therein that at the date therein mentioned such person had on deposit with such depositary the bonds described in such certificate. The holding of registered bonds of course is shown by the registry. The holders of coupon bonds are, therefore, requested to furnish the certificate of a depositary, as provided in the indenture, a form of which certificate is herewith enclosed. The deposit of bonds required for the purpose of procuring such certificate need be only a temporary one.

Herewith you will find a form of consent, which we should be pleased to have you execute and return at your convenience, first having acknowledged its execution before a notary public.

By order of the Board of Directors.

THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY,

DWIGHT W. PARDEE,

Secretary.

W. C. BROWN,

President.

Extra copies of the form of consent will be sent to you on application.

THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY

GRAND CENTRAL TERMINAL

NEW YORK, December 15, 1911.

To the Holders of The New York Central and Hudson River Railroad Company's Three and One-half Per Cent. Gold Bonds, Lake Shore Collateral:

Under the indenture, dated February 4, 1898, executed by The New York Central and Hudson River Railroad Company and the Guaranty Trust Company of New York, as Trustee, pursuant to which the above-mentioned bonds were issued, the Lake Shore & Michigan Southern Railway Company may be consolidated with the New York Central, or any other company may be consolidated with the Lake Shore, upon such terms as may be approved by the holders of threequarters of said bonds; but in case of any such consolidation, these bonds and certain other bonds of the New York Central of a similar issue not exceeding in amount $21,550,000 (the latter being the three and one-half per cent. gold bonds of this company for which stock of the Michigan Central Railroad Company is pledged as collateral) shall be secured by a mortgage upon the railroad of the New York Central, as provided in Section 5 of Article Two of the indenture, next in rank and second only to its existing general mortgage, dated June 1, 1897, securing an authorized issue of $100,000,000 of bonds, and in connection with any such consolidation of the Lake Shore and the New York Central, no lien or charge shall be created or incurred except in subordination and subjection to the prior claim, lien and charge of the Lake Shore collateral bonds.

The New York Central owns more than 90 per cent. of the stock of the Lake Shore, and it is thought that it may be desirable to consolidate the two companies, and to include in such consolidation certain others of the New York Central Lines.

As a preliminary step, your consent is requested pursuant to the provisions of the indenture securing your bonds.

Such consent being given, before making use of it, the New York Central will secure these bonds and also the Michigan Central collateral bonds above referred to by executing a mortgage upon the railroad now owned by it, second only to its existing general mortgage, and in that connection will pay the mortgage tax, which will entitle your bonds to the exemption provided for in the existing mortgage tax laws of the State of New York.

The indenture by which your bonds are secured provides that the, amount and numbers of coupon bonds held by any person executing any request or other instrument as a bondholder and the date of holding the same may be proved by the certificate of any trust company, bank, bankers or other depositary, if such certificate shall be deemed by the Trustee to be satisfactory, showing therein that at the date therein mentioned such person had on deposit with such depositary the bonds described in such certificate. The holding of registered bonds of course is shown by the registry. The holders of coupon bonds are, therefore, requested to furnish the certificate of a depositary, as provided in the indenture, a form of which certificate is herewith enclosed. The deposit of bonds required for the purpose of procuring such certificate need be only a temporary one.

Herewith you will find a form of consent, which we should be pleased to have you execute and return at your convenience, first having acknowledged its execution before a notary public.

By order of the Board of Directors.

THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY W. C. BROWN,

DWIGHT W. PARDEE,

Secretary.

President.

Extra copies of the form of consent will be sent to you on application.

The undersigned, being the owner and holder of THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY'S THREE AND ONE-HALF PER CENT. REGISTERED (COUPON) GOLD BONDS, MICHIGAN CENTRAL COLLATERAL, under an indenture dated April 13, 1898, to Guaranty Trust Company of New York as Trustee, of the aggregate par value of $ numbered as follows:

*

on his (her, its) own behalf and on behalf of his (her, its) successors in the ownership of such bonds, hereby consents to and approves of the consolidation of The Michigan Central Railroad Company with The New York Central and Hudson River Railroad Company, or its successors, together with any other railroad companies, now or here