Fort Worth daily gazette. (Fort Worth, Tex.) 1882-1891, 1886-07-23

ing from Texarkana and Shreveport 10
Fort Worth; the New Orleans Pacific
division, $50 miles, between Shreveport
and New Orleans, and the Rio Grande
division, Go miles, from Fort Worth 20
lei Paso. The securities outstanding on
each division are as follows
Rate
First mortgage, Eastern
Consolidated mortgage,
Eastern division. q nRiG noo
lacomc and land grant
honda. .......,..,.,, QoS Dnn
Rio Grando DIVE lon
tirat moTtEage,s...., =. q n Oos nOO
New Orleans division
First mortgage, New Or.
leans Pacific railway, q 6,7gOOOO
Inc income and land grant bonds are a
first mortgage on the lands OF the com.
pany and a third mortgage on the eastern
division. Besides there are 2,79s, 600
general and terminal mortgage bonds
outstanding, which are flrst mortgage
on the terminal property of the company
at New Orleans and general mortgage
on the whole road. The stock of the
company is $50, l6i,e00 In amount.
The eastern division was built in 1870
~ under the management Of the late Col.
Thomas A. Scots, aud the suretles OF that
division are mostly held ia Philadelphia.
In 1879 Mr.. Gould became interested In
the company, and under their
joint auspices the construction of
the Rio Grande and New Orleans
Pacifcsd ivisions were commenced. early
in 1881 Col. Scott parted with his inter
est to Mr.. Gould, who became possessed
OF the virtual control OF the property.
| The two divisions were built through the
familiar medium Of construction com
panles, which were highly remuneratlye
TO their fortunate stockholders, among
whom was Mr. Gould's Missouri Pacific
road. When completed in 882 the road
was virtually included in the Missouri
Pacific system. Its officers were Off
GERS of the Missouri Pac fc, and
the allegation nus been freely made that
1t was operated with regard rather TO the
interests Of the Missouri Pacific than TO
that Of It's own securlty-holders.
From the start special causes seemed
against the success OF the road. and the
earnings fell of rapidly. 1t was agreed
| in 1884 with the bondholders OF the Rio
Grande & New Orleans 10 fund one-half
their interest for four years in the ter
minSl bonds, which were created for that
purpose. AT the same time Mr.. Gould
agreed that large representation on the
board should be accorded the holders of
the Eastern division bonds. In the latter
part of 1885, however, committee OF the
board, after visiting the property, report
ed that 1t was still falling behind ia earn
ings, was sadly in need OF repairs, and
had large floating indebtedness, 81 ,G00,-
900 of which Is due the Missouri Pacific.
Receivers were Immediately appointed,
and the operation OF the road In their
hands, having been conducted with
view to the sole interests of the road itself,
has already resulted In gratifying in
creasefn its earnings.
AT the same time that the road was put
In the hands Of receivers it was an
nounced that q committee would be
formed, charged with the task OF formu
lating plan for its reorganization. A !
committee was accordingly formed under
the Craftsmanship of Mr.. Wister, but 1t |
would seem that the gentlemen, mainly |
Philadelphians, associated with him were |
principally Interested In the securities OF |
the Eastern division, which, being the |
Oldest and most profitable portion Of the |
road, must be more favorably treated In |
any plan OF reorganization. For the Jun |
Tor securities and the stock they seem to |
have had little consideration Their plan |
comprehended the foreclosure of the ex.
listing mortgages subsequent in lien TO the |
first mortgage on the Eastern division, /
and the reorganization OF the company
with an indebtedness OF $1,000, 900 per |
cent. bonds divided into two class
es, one bearing obligatory interest |
and the other entitled 10 interest |
when earned. These were TO be divided /
In exchanges for the other classes OF 1
bonds In certain proportions. While the |
division was, perhaps, unjust to the Rio
Grande & New Orleans division bond |
holders, the plan was, with some modlfl- /
cation, capable OF being made acceptable |
1t reduced the obligatory Interest on the |
debt 10 9l,ll5,000 per annum, or within /
It's earning capacity. The feature OF the |
plan, however, which naturally excited 4
the greatest share OF criticism was the |
manner In viii h the stock was treated |
Instead Of assessing the existing stock as
the price of its participation In the re-
ogganizltio IL was proposed 10 exchange 1
three shares Of the existing stock for one |
OF new, the holder having the privilege OF |
purchasing another share OF new for Sl5, |
the balance OF the new stock, which was
equal 10 amount 70 the old capital, TO be 4
used in settling the floating debt. This,
II Is easy to perceive, would be equivalent 4
70 handing the control Of the company 4
back 60 ssa Missouri PacIhr.
Committees have therefore been formed
20 represent the holders of the Rio Grande 1
division aud land grant bonds and the |
stockholders, and the New Orleaus diyis- /
ion bondholders have followed their ex-
ample. plans Of reorganization, Ia OPP 4
position 10 that Of the Wifaer committee, 4
have been formulated by the Rio Grande /