Pittsburg dispatch. [volume] (Pittsburg [Pa.]) 1880-1923, 1891-05-10
The Westinghouse Electric Company
Negotiations Have Reached the
Turning Point.
EASTERNERS ASSUME THE BURDEN
August Belmont, BraytOn Ives, and Lee,
= HigglusOn & Co. Undertake the
Reorganization, and
SUBMIT PLANS TO THE STOCKHOLDERS.
Neither the Edison Nor ThomsQDHeus!On Company has
Say In the Matter.

The negotiations looking 10 the reorgan
iEation of the Westinghouse Electric Com
pany, upon which the head of the interests
has been SO earnestly engaged for som,
months past have at length been brought L
an issue which, it is expected, will be re
garded by stockholders and creditors as very
successful, under all the circumstances. Th,
particulars of these negotiations are nov
officially announced for the first time in &
lengthy communication sent to the stock
holders yesterday, and which is appended
To complete the matter nothing is now
wanting but the assent of the stock
holders to the plan. This plan i!
TO be carried out by a syndicate
composed OF August Belmont, the New
York banker, Charles Fairchild, of Lee
Higginson s. Co., and Brayton Ives, Presi.
dent of the Western National Bank. OF
New York, who, with Henry d. Hyde
President of the Equitable Life Insurance
Company, Marcellus Hartley, OF Hartley s
Graham, of New York, and Charlie.
Francis Adams of Boston, have agreed to
become members Of the Board of Directors
upon completion of the reorganization.
Agreement of the Syndicate.
The syndicate above referred to,
with certain creditors of the com
pany and others, has agreed to
take So, 600, 600 of the z per cent preferred
stock, upon the assent of the stockholders
to the plan. which comprises the following
propositions: The present authorized capi-
tai. SO, 0O0, 900, is not to be increased; the
holders of the outstanding stock,
amounting to about S7,000,000, ali
OF which is common stock, are to surrender
40 per cent of their holdings into the
treasury. This will turn about 5000, 600
of stock into. the treasury, counting the
So, ,000, 900 formerly issued but not placed.
-Four million dollars of TINS treasury stock
is to be converted into per cent preferred
stock, of which S., 900. 900 is to be sold for
account of the floating debt and working
capital, while $500, 900 is to be held in re-
serve. Part of the remaining stock will be
devoted 10 purchasing further interest in
the United States Electric Light Company
and the Consolidated Electric Light Com
PAW.
The Plan Expected to be Approved.
The Mercantile Trust Company, of New
York, has been named as the depository of
the stock, and negotiable certificates of de.
posit will be issued by the company as
against the stock assigned to it by the
stockholders, who are also requested to send
in to the Committee of Reorganization
written authority to surrender into the
treasury 40 per cent of this stock sent in. 1t
is generally understood that this plan will
be approved OF by the bulk of the share
holders. 1t already has the appreciation Of
those most heavily interested in the electric
company.
1t is generally held that the accomplish
ment of this scheme of reorganization
which, it is thought, will receive immediate
recognition and support will not only
straighten out the tangled web of the CON-
pany'S finances, but will enable it to enter
upon a new era of prosperity, with every
facility for doing larger trade than before.
Though hampered by its difficulties, the
company has been enabled to keep its fac
tories here and in New Jersey and New
York gong, as witnessed by the fact that
the sales OF electrical apparatus during last
year amounted to 81, SOC, 000
Gobblins Up Other Interests.
The plan, as outlined, etfectually dis
poses of the assertions SO frequently pub
lIshed that the Thomson Houston Company
was attempting to absorb the Westinghouse
Electric So far from this being the case,
it is stated on authority that the Electric
Company will probably take other in
terests under its wing. When the
propositions toward reorganization are
accomplished it will be placed in a
very favorable position TO widen its field,
for it will be substantially free fran debt
and have an outstanding capital of S9, ,000,-
600, financial position which other big in
terests with many millions of capital can
hardly claim.
The circular conveying the reorganization
scheme is as follows:
The Plan of Reorganization.
OFFICE OF THE
WESTINGHOUSE ELECTRIC AND MF'G. Co.,
No. l2O BROADWAY, NEW YORK, May7.
To the Stockholders of the Westinghouse Electric
and Manufacturing Company:
Your officers have for some time been con-
fronted with a condition of affairs which has
kept the company upon the brink of receiver
Ship hut having full confidence in the value of
your prop erty and realizing the magnitude of
the injury which would be suffered by the
stockholders in case the creditors should force
the company into a receivership or assign
menI for the benefit of cred dItors, we have spared
no effort to keep the business together and the
factories in operation, pending the perfection of
the plan of reorganization set forth in the an
neXed resolutions, which made q part of
this circular. We feel confident that if this
plan meets with that immediate acd unani-
nous cooperation on the part of the stockhod-
ers which is essential TO its success, the credit
of the company viii be restored and the busi-
ness placed upon n firm basis. The following
gentlemen who have not been identified hither-
TO with the management of the company have
consented to become members OF your Board of
Directors in case the proposed reorganization is
successful: Messrs. August Belmont, Marcel
lus Hartley. Henry b. HYDE and Brayton Ives
all of New York. and Messrs Charles Francis
Adams and Charles Fairchild, OF Boston.
Conditions of the Agreement.
The reorganization syndicate, certain credi-
tors and Others, have agreed to take at par
So 600 900 of preferred stock upon the condition,
among other things. that the stockholders
sent to the plan of reorganization and return to
the treasury Of the company, 40 per cent of their
holdings as provided in this plan. An oppor-
Iunity will be offered to "assenting" stockhold-
are confident that the stockholders will feel
that the surrender of 40 per cent of their stock
as part Of the proposed plan, Will be a posi-
tive advantage rather than a sacrifice for the
following reasons:
First-The return of this proportion of the
stock TO the treasury will enable the company
to pay even without further additions to its
property or business. an increase in dividends
upon the remaining stock outstanding almost
in proportion to the amount of stock surren-
vantages resulting from the completion of the
proposed plan, Will be more valuable than 100
shares without the surrender.
SecOnd-The "aSSenting stock" will be en-
titled to a per cent annual preferential divi-
dend before any dividend is paid on such stock
as may not assent to the plan.
Ihird-The issue of preferred stock rendered
possible by the surrender of part of the COM
mon stock viii enable the company to care for
its floating debt and provide working capital.
Fourth-Treasury stock is provided wherewi:h
TO purchase additional property in the shape of
the stocks of the United States and Consoli-
dated companies, which purchase will greatly
strengthen the company.