The Muskegon, Grand Rapids and Indiana Railroad Company was organized in the inter est of the Grand Rapids and Indiana Railroad Company in February 1886. The road was completed from Muskegon to Grand Rapids, 37 miles, in December 1886, and leased to the Grand Rapids and Indiana Railroad Com any J for 99 years from time of its completion, June 1886, rental being net earnings, which were guaranteed by the lessee to be equal to the fixed charges (interest on $750,000 5 per cent bonds), and 20 per cent of gross earnings of all business interchanged; but the excess of expenditure over earnings forced the sale of the Grand Rapids and Indiana Railroad under foreclosure 10 June 1896.
A new company was organized as the Grand Rapids and Indiana Railway Company, was in corporated in Indiana and Michigan in July 1896, and commenced operation of the road 1 Aug. 1896, with a capital stock of $6,000,000. Of this, $4,291,000 was exchanged for third mortgage 5 per cent bonds, and $1,500,700 for debts, and also provided for a second mortgage of $5,000,000 (2 per cent first year, 3 per cent two years and 4 per cent thereafter), of which $3,962,000 were exchanged for second mortgage bonds and certain debts of the old company; the remainder held in treasury for necessary betterments to the property in its then depleted condition.
By economical management and wise ex penditures for betterments and additions, the company was enabled to make a slight return in the shape of dividends to its shareholders, first in 1900, beginning with 1 per cent and now paying 3 per cent; but is confronted by such hostile legislation in Michigan, both in the re duction of its passenger fares and increased taxation to such an extent that it is a serious question whether it can continue the small re turn to those who furnished the capital, so long in advance of its needs, to develop western Michigan and northern Indiana. Dividend of 3 per cent was continued until April 1910, since when no dividends have been paid.