Richmond dispatch. [volume] (Richmond, Va.) 1884-1903, 1888-02-11
NEUTRALITY-SUSPICIOUS.
More About the scheme for ReOr.
Ganizattou.

More About the scheme for ReOr'
ganizaiton.
The Tribune of yesterday contains the
following details of the scheme for reor-
ganizing the Chesapeake and Ohio rail
way
The reorganization scheme of the
Chesapeake and Ohio railway was an
nounced officially yesterday. The terms
have been already outlined. The assess
ments on the stock, which have been in
doubt. are fixed at - on the first pre-
fcrred, IS on the second preferred, and
s. on the common. New first preferred
stock will be issued for the assessment.
Tie securities Of the new company will
consist of $4,000, 600 each Of first and
second preferred per cent. nOn-cumu-
lative stock. about S40,000.O00 common
stock, and $50, 900, 900 first consolidated
3 per cent. bonds
The plan provides for the building of
the line from Ashland to Cincinnati,
which is now under construction. The
distribution OF the new securities is given
in the advertising columns. The follow
ing letter, addressed to the holders OF Sc
curites, WAS made public by President G.
2. Huntington yesterday:
As a director and as president OF the
Chesapeake and Ohio Railway Company
| have earnestly laborcd to bring 1t up
to the position of trst-class line from
the Atlantic seaboarl to the interior val
lev TO that end | have invested largely
of my own means and have in good
faith asked the public to aid in the task
by loans upon its bonds. Considerable
progress has been made, but difficulties
of one kind or another have retarded It's
full development. The road has been
an expensive one to build, partly from
the boldness Of its engineering and part
" from the nature Of the country ira
versed. 1t penetrates one of the richest
mineral regions Of the continent, and
will afford one of the shortest and most
cheaply operated outlets from the cen
trail West to the coastwise cities and Flu
rope. The principal link to unite il with
the railroad system of the West Is near
lysuppliej, and the prOspectof improve
ment, though long deferred, Is apparent
ly near Mt hand.
1t was with regret that | felt called
upon, in my circular letter Of July 24,
1886, to ask the holders of Series 4
bonds to accept two thirds of the specified
rate of interest. More than two thirds
in amount of the entire loan have assent
ed TO the plan then proposed, and
hoped that it might have been carried
out. A minority refused and threatened
legal proceedings. Without discussing
the motives for such OppositiOnit is sutli
cient to say that in order to effect har
monious adjustment IN respect to Chesa
peake and Ohio securities, and to obtain
the new capital necessary to bring about
the much desired extension to Cincinna
ii, it was suggested by some OF those
concerned that the better way to clear NJ
all controversy and disencumber the pro
pcrty would be to allow foreclosure and
to reorganize the company on sound
basis. 10 this 1 was disposed TO assent,
all the more readily because it presented
the opportunity of placing the asserting
b bondholders on a satisfactory footing
as to the extent of their liens and In
creasing their current income.
The plan of reorganization, as finally
agreed upon with a syndicate of bank
ers, provides that the new company shall
embrace the ownership of the entire
line from Newport News to the union
depot mt Cincinnati, a distance of about
$50 miles Of main line, and embracing
the now incomplete river division of las
miles and the bridge and its important
I approaches at CoYiDgtOn and Cincinnati,
of which about mile IS elevated track
in the heart Of the two cities. The
bridge and its approaches are above the
highest water that was ever known,
The mortgage securing the b bonds oil
1903, SO, 600 in amount, is 10 he
foreclosed, leaving the smaller issues
under prior and Independent mortgage
liens TO run to maturity. Those holder.
who have received 70 per cent. Of the
Newport News and Mississippi Valley
stock will retain the same. IN
The plan of reorganization viii be
fully set forth in the circular Of Drexel,
Morgan Il Co, whose plan has my hearty
approval. ] regret any necessity for Q
- AithlfSI III li4N l'ifsll 9tt iOAsh
circular OF July y, 1886. to the B bond
holders. but | am satisfied that the pro
position now made 10 reorganize the
company and secure for 1t the new and
valuable line to Cincinnati is more for
the interest OF all b bondholders than the
propositions previously made. and being
myself the largest holder OF Il bonds
| have not hestated 30 agree tc
accept It's terms, believing thereby
that the income Of y bondholders will be
considerably increased and the security
vastly improved 1 would therefore
ike to have il done, "a believe that DC
further concessions win ever be asked
after this reorganization is perfected--a
reorganization clearly made necessary
by the fact that the Chesapeake and Ohio
rs q stem line without proper conpec-
tons with western roads, could not earn
the interest upon Its great cost, and ha'
been able TO obtain these connections
Only ut the expense of concessions that
had to be made in view of roads to be
built