The morning news. [volume] (Savannah, Ga.) 1887-1900, 1892-06-29
DREXEL'S FIRM DECLINES
CLYDE'S REFUSAL TO PUT THEM
IN CONTROL THE REASON,

VIII Endeavor to Have Mr.. Clyde
Withdraw Els Opposition - Wall
Street Greatly Surprised By the Out
come of the Negotiations.
NEW YORK, June 28.-Drexel, Morgan
& Co. have sent the following letter to w.
E. Strong, chairman of the Richmond
Terminal stockholders committee:
". E. Strong, Chairman:
DEAR SIR-ReferrinE to our previous corre-
spondence regarding the affairs Of the Rich
mond Terminal system, we beg to say that we
have made a careful investigation Of the affairs
Of the Richmond Terminal system. We have
reached the conclusion that reorganization is
feasible on the basis of equity to all concerned,
one that we should be prepared to undertake,
and one which, in our opinion, would place your
property on a sound financial basis. The COM
plications and difficulties which must be met in
this connection makes it necessary, we need
scarcely add that We should as
representatives, as far as possible,
be protected against any single interest which
might for personal or other reason desire to
thwart the successful carrying out of such re-
organization. With this in mind we deem it
essential before any action on our part, that q
majority Of each class of the stock and bonds
OF the Richmond and West Point Terminal Rail
way and Warehouse Company be deposited
with us for the purpose of reorganization. and
that all litigation should be put under our con-
troll and persons of our selection substituted for
the receivers now in possession OF the proper
ties. Therefore. upon learning of the
appointment Of receivers of the Rich
mond and Danville property by the United
States court we applied to Mr.. w. P. Clyde
to know whether in case we undertook the re-
organization the suit under his control would be
transferred to us and the present receivers
sign in favor of Mr.. Spencer, stating to him
that, in our opinion, such course was essen
tial. He declines to give US any such assurance
and our conversation with him leads to doubt
as to his loyalty to any reorganization plan
whatever, although he az one of your COM
mittee, signed the request to us to undertake
the same. As in our opinion it ia essential to
the success of any plan that during the
reorganization the properties involved should
be under our control. as already mentioned, and
as the position taken by Mr.. Clyde makes this
impossible, we are obliged, reluctantly, to de-
cline the invitation to undertake the reorganiza-
tion. Thanking you for your confidence We re-
main, dear sir. yours very truly,
DRExEL, MORGAN & Co.
A similar letter has been sent to Messrs
Kessler & Co., Spencer Trask &C Co., John
Bloodgood & Co., Charles Head 81 Co.. and
others.
The committee OF fifteen met this after
noon in the Office Of Work, Strong e. Co.,
but ad journed until July z without action.
After the adjournment it was stated that
the letter Of Drexel, Morgan & Co. had been
discussed. but that the committee made no
expression as to its views. The members of
the committee still think that Drexel.
Morgan & Co. will undertake the work of
reorganizing the property. The firm only
desire to have control Of the litigation and
to be joined as parties to the suits already
pending, and it Is thought that pressure will
be brought to bear before the next meeting
to have this satisfactorily arranged.
WALL STREET SURPRISED.
NEW York, June 2S.-WalI street had
made up its mind very positively that
Drexel, Morgan & Co.'s acceptance of the
invitation extended to them by a committee
Of security holders to undertake the reor-
ganiZation Of the Richmond and West
Point Terminal Railway and Warehouse
Company was foregone conclusion. Con-
sequently when the great banking house
issued its letter of formal declination this
morning 1t came like a clap of thunder out
of clear sky to the habitues of the stock
exchange district. All the Terminal secu-
rites had sharp decline when Drexel,
Morgan & Co.'s determination became
known, but a sharp rally took
place when the reason for their refusing be-
came generally understood. The letter ad-
dressed to W. E. Strong, chairman of the
securities holders committee, was promptly
secured by the various news agencies and
thereby got quick and wide circulation. 1t
was critically analyzed and seems to be a
decIination that came not on account of
any difficulty in the way of the reorganiza-
ton per Sc, but because of what Drexel,
Morgan & Co. considered q serious bin
drance occasioned by the recent action and
present attitude of Mr. Clyde.
COUNTED WITHOUT THEIR HOST!
ssWhen Mr. Clyde was recently instru-
mental In putting both the Richmond and
Danville and the Richmond Terminal COM
panies in the hands of receivers the general
impression was that those proceedings were
instituted with a view to facilitating any
reorganization that Drexel, Morgan & Co.
might PROPOSE and in no sense IN opposition
to such programme. Drexel, Morgan &
Co. themselves inclined to the opinion, but
In order TO be perfectly sure of the facts
they conferred with Mr.. Clyde. explaining
to him that they could not think of under
taking the reorganization unless they were
placed in absolute control of the
to this end they desired to know
Of Mr.. Clyde If he would be willing to put
them In control of the suits which he had
Instituted, and on which his applications
Tor receivers had been granted by the
United States courts. For reasons salts
factory to himself Mr.. Clyde did not see at
to accede TO this proposition, and on that,
and that only, is based Drexel, Morgan &
Co.'s letter declining to undertake the re-
organization.
DRExEL's REQUEST NOT UNREAsoNABLE.
1t does not seem at all unreasonable that
Drexel, Morgan & Co. should have desired
the absolute control Of all Htigations in
Volvtng the properties reached in the pro-
posed reorganization. as we'll as 10 control
the properties themselves, since they were
TO put their reputation and credit behind
ths stupendous undertaking, and it will be
hard for Mr.. Clyde to explain how his or
any other creditors interest could suffer by
having Samuel Spencer as receiver instead
OF the gentlemen who were recently ap-
pointed. Without meaning the slightest
renectlon on them, it does seem that Mr..
spencer, owing to his relations with Drexel,
morgan q Co., likewise his experience aud
8 ability as a practical railroad man, would
s serve the interests of all concerned in the best
& possible way. Gen. Sam Thomas 10
8 Salo to have taken this view Of it, and TO
s.eVe expressed his perfect willingness 10
naVe Mr. Spencer substituted as receiver
1or the East Tennessee, Virginia and Geor-
gla Instead of Col. Magee and MIR. Fink,
& VINO we're appointed on Gen. Thomas apph-