New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-05-11
RAILROAD INTERESTS.
GOULD s COTTON BELT PLAN.
THE. MEMORANDUM UNDER WHICH THE NAY IN

THE MEMORANDUM UNDER WHICH THE NAY IN
TERGsT AND OTHER DEBTS WERE TO DE MET
President Forlyce, of the st. Louis. Kansas and
Texas Railway, continued In conference yesterday
with counsel for the Central Trust Company. trustee
of the first mortgage which detult OF Nay interest
was made OH Tuesday and with some Of tho principal
hordholdcrs No plan was announced fer the relief
Of tho railway company from It's present embarrsss'
merits.
George Gould yesterday gave out the memorandum
adopted BY the directors Of tho Cotton Belt Road at
a meeting in ST. Louis April IS, President Fordyoe
and Directors Kercns BomIs, DOddridGe. scntor and
Ferguson being present IL was addressed to the
bopdholdcrs' committee or trustees and was by them
approved in general terms on AprI I'd IDS luz.
nishcd the basis under when jay Gould. RuSSeh
Sage and others formed syndicate for adVancihk
funds TO meet the May coupons OF the ROAD EeorEo
Gould said thae the coupons wcro to be PAIL not
bought and could not be held prior lien against
the frsr mortgage bonds. The syndicate were Wiling
70 take them as security trusting that tho bond
holders would provide for them under the general
plan Of reorganization proposed but not expecting
the coupons TO take any precedence over mortgage
OBLIGATIONS 1t IS felt In wall Street that u
the memorandum had been published at the
time the bopdhoders would have better understood
the position Of affairs and there might not have beon
any occasion for the action OF the Central Trust Com
pany in obectng TO the payment OF the May Inter
est without cancellation Of tho coupons.
Mr. Fordyce's memorandum states that tho railway
company is in debt TO employees 10 the amount Oh
100000; owes $4,000 for supplies and So2'ooo
for improvements, total Of ss45,OOO exclusive OF
the Nav interest Of S492 27O cor trust notes. etc. Inc
management thought that It would be wise 10 provide
for The carving OF that Indebtedness in such form as
will no least expensive to tho company and its bust
moss to a ppriod whom tho earning capacity Of the
prnnertv shall have Increased sufficiently TO discharge
said Indebtedness. and thereby prevent the passage
of the property into the hands OF the courts or re-
| ccvnro Full confidence IS expressed In the fucurc
| OF the properly. although the necessity OF the OK
pendture Of 100000 To improve the track was suS-
Cested Mr.. Forlyce's memorandum proposed that 10
meet these debts interest trusts etc. tho company
bouId issue ccrtc Of indebtedness 10 the amount
| NJ ~ 600 600 to be lien upon all the property
o tho com3any and TO he sold 10 raise tho necessary
| funds These certificates were 10 bear per cent
! annual Interest and to mature on January l. leO'
All the notes. coupons Judgments ETC. however Pua
! chased through the fundamentally OF these cerun
catrs were 10 be kept alive security 70 tho synd
| cato that would advance The aluley, PRESIDENT Fof
| dyce, however, adds this: ,.. ,,, ~
These suggestions do not contemplate making ans
new Indebtedness against the railway companies MOI
lmpairing any Hens already existing IN favor OF IN,
euro money to discharge what are nov IN law Hen,
upon the property and 10 Keep alive ,hoSc IONS mn s
Hens shall have been fully paid and the liens thus
taken mp and continued under ths arrangement are u
! be held and maintained collateral security for thu
payment Of tho certificates Of indebtedness or bond
| herein proposed. TAe lions against the property o.
rangement, except. possibly ~ that extent Of The
! amount for bcttermcnts aforesaid 10 go into tho i'm
provcmCnt OF tho track and lines OF railway OF sad
| companies This Improvement however, II IS be
H"ycd will Increase the earning capacity of n? com
Inc rst mortgage bcndhod"r fa% @ Esyond the "opens
| which It is herein contemplated shan be Incurred