The Sun.
London, England, 1867-07-17 00:00:00

Railway and Other Companies.

OTTOMAN (SMYRNA TO AID IN.)
A special general meeting of this company was
held on Monday at the City Terminus Hotel,
Cannon-street ; Sir Macdonald Stephenson in the

chair.
Mr. S. J. Cooke, the secretary, having read the
notice convening the meeting, the heads of arrange-
ment agreed to by the committees of the first and
second debenture holders and general creditors of
the company for the application of the Government
guarantee to the redemption of the first debentures
and discharge of the floating debt were taken as
read. The first and second debenture holders' com-
mittees recommended that the whole of the Govern-
ment guarantee, £12,000 and £lO,OOO, together
£112,000, be apportioned as follows :-Ist, to the
payment of interest on the first debentures (t 250,000)
from May, 18(16, at the rate of 6 pa cent.; to the
iayment of £7,390 on account of the floating debt
(about £112,000) ; to payment on account of the
principal sum due to the first debenture holders of
the balance which might remain of the first guar-
antee of £72,000 a year ; to payment of £4,110
balance of the £11,500, the instalment of the float-
ing debt ; to payment of interest to the second de-
benture holders in accordance with the conditions
of their bonds. The amount to be applied from time
to time in the redemption of the first debentures was
to be by drawings in the usual way. The result of
the arrangement, if carried into effect and the gua-
rantee punctually paid, would be to redeem the
principal of the first debentures in about five years,
in the meantime to pay the interest on the second
debentures out of the second guarantee of £40,000,
and, eventually, an accumulated dividend to the
shareholders.
The CirAtemaN apologised for delaying the
meeting later than the time appointed, in
consequence of the board having had an
interview with the Sultan and Grand Vizier,
and he was glad to say it was satisfactory. He said
it would be remembered that considerable difference
of opinion had been expressed by some of the share-
holders as to the future application of the guaran-
teed interest, and as to the respective rights of the
bond and shareholders. With a view to set this
question at rest, it was agreed at a meeting of the
two committees of bondholders with several of the
principal shareholders, that a case should be pre-
pared embodying the views of all parties, and sub-
mitted for the opinion of the Attorney-General and
Mr. Charles Clark. He would ask Mr. Rooper to
read the opinion, and to afford any further infor-
mation required regarding it; only mentioning that
when the directors recommended that the guarantee
should be applied to discharge the debts and obliga-
tions incurred to complete the line, and thereby to
utilise the previous expenditure, they did so on the
grounds of its being the honest as well as the usual
practice under all similar circumstances. This view
had now received the authority of the Attorney-
General and of another eminent counsel as to its
being the strictly legal as well as the equitable appli-
cation of the funds; and, assuming the approval of
the supplemental arrangement suggesting the pay-
ment of the share interest (pani passe with the re-
imbursement of the first bonds) out of the reserved
£304,000, there could be no doubt that all the re-
quirements of the case would have been met as far
as possible. If the endeavours of the board should
be, as they hoped, successful in obtaining the early
payment of the arrears, and some definite security
for future regularity, there could be no reason why
the company's property should not occupy its pro-
per position, and the bonds and shares attain their
real and intrinsic value.
Mr. ROOPER, the solicitor, said, in reference to
obtaining the opinion of counsel, that the case had
been prepared by the committee of the first and se-
cond bondholders, and by Mr. Fardell and Mr. Ten-
lon on the part of the shareholders, and by himself
on the part of the company. The case had been
. fairly, properly, and honestly drawn up ; all doubts,
the proposed arrangement for the settlements with
bondholders and other documents, were laid
before the Attorney-General and Mr. Clark. He
then explained the particulars of the case. The first
guarantee was £72,000 a year for a capital of
£1,200,000, which not being all raised they had to
borrow £250,000 on the first debentures issued to
carry on the works. and the Ottoman Government
had duly authorised their issue. Further capital was
required to complete the line, and a further guaran-
tee of £40,000 a year was granted by the Ottoman
Government for the additional capital, and upon
which the second issue of debentures was based
The produce of the latter debentures and the float-
ing debt had enabled them to finish the line, and
thus to secure the guarantee. The proceedings of
the board had been legally carried out, and every-
thing had been done on a fair and honest prin-
ciple, and could not be disturbed. The Attorney-
General and Mr. Clark treated the first mortgage
in every respect as a good one, and in their opinion
the proposed arrangement constituted a proper ap-
propriation of the £72,000 a year as between the
shareholders and first debenture holders ; that the
proposed arrangement was one that a court of equity
would uphold, and it was greatly for the interest of
all parties that litigation should be avoided, and that
all parties should be prepared to meet differences that
might arise by moderation and mutual concessions.
The CHAIRMAN said they had only to see whether
the shareholders would come into that arrangement.
11e concluded by moving that the heads of agree-
ment be approved, and that the following clause be
added thereto :—" As the first debentures are paid
off, a like amount of the £301,000 reserved bonds
will be released, and certificates will be issued rate-
ably to the shareholders for the amounts so from
time to time released on account of their dividends,
past and current ; such certificates to bear interest
at 6 per cent., and the interest to be payable out of
the subvention of £72,000 a year next after pay-
ment of the contributio❑ towards the floating debt."
Mr. A. DEVAUX seconded the motion.
Mr. E. J. lIERAPATII suggested that the directors
should have power to buy up the first debenture
bonds in the market, as well as to pay them off at
par value. This would be no injury to the bond-
holders, while the price of the bonds being only
about 50 per cent., the company would be in a posi-
tion to effect economically the sinking fund of the
debentures, and it would make a vast difference to
the shareholders.

The CHAIRMAN said that the suggestion by Mr.
Herapath was very important, if they could carry

it oat.

Mr. ROOPER said it was quite in accordance with
his views, and could be adopted if the bondholders
would assent to it.

Mr. Monuis, on the part of the bondholders, said
the matter had been so long under discussion, they
bad been asked for so many concessions, and as the
matter was so far settled it would he unwise to re-
open the question. The debentures were held in
large amounts, the holders could combine, and the
advantage would be so small that it would not be
worth the trouble.

Mr. TEBAY said he should be glad to sell his
bonds at 70, and so would many others that he
knew.

Mr. KI3IBER hoped they would not lose sight of
the main question, for if the guarantee were regu-
larly paid there would, in his opinion, be money
enough for them all.

• The CHAIRMAN hoped they would be unanimous.
Ile then put the motion to the meeting, and it was
carried unanimously amid cheers.
The adjourned ordinary meeting was then held.
tr. E. J. lIERAPATIE called the attention of the
board to an article in the Levant Herald, in which
it was stated that the third-class fares on the rail-
way were. injuriously high, being 13s. sd. for 100
miles run, a fare calculate 1 to dry up the traffic,
especially in Turkey. Ile thought it temarkable
that the traffic receipts were so low, the line having
on it several important places.
The CHAIRMAN said so soon as the present ques-
tions were settled the directors would specially de-
vote themselves to the development of the traffic,.
The report and statement of accounts were then
unanimously adopted.
Su: M. Stephenson, who retired by rotation, was
re-elected, and also the retiring auditors, Mr. Smith
and Mr. lklorgan, with an allowance of £l5 15s.
each per annum.
The CHAIIMAN hoed they would now consider