New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1886-12-18
CHESAPEAKE AND OHIO PLANS.
ATALK WITH C. P. HUNTINGTON

1
WHAT HE THINKS THE BoND-HOLDERs WILL GAIN
BY ASSERTING TO HIS PLAN.
President Huntington talked yesterday with n
TRIBUNE reporer in respect the dissatisfied holders
! OF bonds Of the Chesapeake and Ohio Railway who
object to the scheme of extension. When asked what
was the foundation of the litigation threatened by
certain people in Troy n. Y. Mr.. Huntington replied
The offer of the Newport News and Mississippi Val
| lev Company as forth in my letter of July last
proposed to put the Chesapeake and Ohio Company
upon better basis of credit, by reducing its annual
! fixed charges. The original Chesapeake and Ohio
| Railroad bonds for which these present issues were
exchanged under the plan of reorganization, were
sold by popular advertisement and subscription ana
v ere widely scattered Acceptances are coming In
every day. and on the whole fast as could be ex-
pected No benefit Is TO be gained that can discover
! bv non-assent while the advantages OF compliance
are many and important nor by stopping the interest
on the other bonds
What has prevented the company from paying full
nterestT
Let us look at The present position OF the Chesa
peake and Ohio Railway property and funded debt
The completion of line from the terminus to
the Big Sandy RIVER through mountain ranges invov
ing more expense for embellishments and tunnels than
any line of edual length in America and the bringing
of roadbed its present state OF perfection, have
exhausted its pedg gable credit. The extensions and
feeders II now has situated beyond its western
terminus are in part owned and controlled by those
who are also holders OF Chesapeake and Ohio Railway
securities but in part by those who have no such
in crest There is assurance that even he present
degree of community of ownership and control will
be permanent that the valuable connections in
Kentucky and Tennessee and on the north bank of
the Ohio may be transferred to other trunk iinrs
Thus more complete union of interests had hoped TO
secure during my lifetime terms THAT would be
far alike 10 those OF my associates In the Chesapeake
and Ohio Railway and TO those in the tributary com
panies | have given many years OF arduous labor 10
the building up OF this enterprise in the hoIe that II
could be ma le more than selfsustaning. have not
lost faith in ts ultimate outcome, but must face
the fact it's burden OF fixed charges IL greater than
it's earning power now in the near future. may
freely disc;afm responsibility for this OF things.
as tho present large Indebtedness was entered upon
under The reorganization plan in Difference to the
views Of the bondholders and against my convictions
if not positive protest The present Is necessary and
PROPER time to remedy the errors OF the past. Inc
road in nv ind gment cannot earn at present quite
pe cent on the b bonds it certainly cannot earn o.
II useless expect any more out Of it than 1t can
earn net" .
= Have you any confidence that this plan would
- To conduct the business bet the seaboard and
the Ohio and Mississippi valleys the road needs further
expenditures Tor extension OF second track. additional
motive power and rolling stock the alliance OF ocean
steamship lines docks. elevators aud other accessories
which II csnnot obtain nv fresh borrowing. but ly
by cash aynents to be derived either from current
nsr earnings. or by advances from others who may
have n Joint interest in its prosperity.
"Wl the minority OF bondholders be able to fore
close and take the road =
:. The holders OF b. bonds would hardly like to
foreco their entire interest for the accomplishment OF
these purposes. while il would Danish the hone of
interest upon the currency bonds for series OF
Nv the terms OF the mortgage securing the b. bonds
the right OF foreclosure does not until part
OF six successive remaus unpaid No adequate
relief s to be found in that direction Besides, one
experience of litigation and foreclosure should suffice
for this generation OF bondhOders. No other
ii seems to me- would be wise for the bondholders
as the one proposed. The traffic of the road is aud
must consist chiefly Of coal coke, iron, lumber gram
and other prduocts. whch only be moved at a
profit by an immense tonnage, for which preparation
MIST be made"
d" " ny does not the new company Oncr 10 guarantee
. You ask il the Newport News and Mississippi
Valley Company the lessee. viii gu6fantse the lower
rate of interest on the bonds In answer will
saw that the bOndhoders offered % per cent OF the
stock or the essees company. in lien OF such guarantee
which think will be of more value to them the
investment OF money by the lessee tor other pur
poses tehnd the security Of the b. bonds W have all
the effect in market, alter few years OF positive
Guarantee VIII oh in fact be also Obtained upon the
surrender OF the profered % per cent OF shares but
this alternative or guarantee need net he oOnsdered at
n,esept The lessee company Assumes the burden !
of having the interest far the net tarnn9s III /
suffice Tor the purpose The present security for pay
mem on. OF the earnings MAINS unimpared, and the
ron holder will be entitled by Lis shares to percent
age OF the and above his interest spula
. What rights have the complaining bondhoders !
over the other classes y
The lien of the A. and B. bonds il subordinate TO
that of The purchase mDney funding 0nds iS2,3JO
600 authorzedl issued retire an equal amount OF
virginia Central Railrc ad bonds The - 0OO.O !
series A have the same position as the BIS west OF
Ricbmouf and are in addition first lien concurrent
" with - 600 900 skies OF l0ll on the stem end OF
Inc road betwe cen Richmond and Newport News. which
includes the expensive docks and plant ilready |
erected The credit and preference shown to the AS
were xpressly intended and reserved in the plan OF
and the cash projects OF these bonds
at mar were invested for the protection OF the re-
mander Of the debt and they legally and equits
bly entitled to receive their full current interest to
maturity.
II this suit for an injunction to prevent paying
interest on the A. bonds and junior issues granted
what effect will it have y
Oh | presume there is some job IN II somewhere.
As stated the right TO foreclose and the exercise Of
all the rights under the mortgage is not denied IL -
simply a question OF business judgment whether the
extension at per cent is advantageous or not There
would be great to the holders Of the enoined
bonds. hut so Far can nothing gained 70 The
CO plainants."
How IL the road doing now r.
Well the roads west OF Virginia are doing pretty
well this year but the Chesapeake and Ohio has not
come up TO It's full interest charge. and if cannot do
80 now there is prospect Of its DONG for some
time to come. No one desires it more than myself.
and ii it could the full 6 per cent should be
delighted 10 hand il TO the creditors"
THE MAYOR VETOES RAILROAD PLAN.
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