New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-06-29
PART II.
JUNE 20, 1892.
ANOTHERBLOW AT TERMINAL
DRE0EL, MORGAN & CO. DECLINE THE
TASK OF REORGANIZATION.
THEIR LITTER OF REFUSAL DECLARES THAT
THERE ARE HOSTILE INTERESTS on THE
INSIDE-A SURPRISE FOR

THERE ARE HOSTILE INTERESTS on THE
INsIDE-A SURPRISE FOR
WALL STREET.
Drexel, Morgan & Co. yesterday declined to under
take the reorganization OF the Richmond Terminal
system The letter announcing this decision based
II upon the existence of inside interests unrendy to
the reorganization plan. This hostile element was
referred 10 in the letter in uncertain terms, and
drew forth sharp reply before the day was done
The firm declared its inability to control OF the
litigation proceedings in which the Terminal system
was involved! and to have receivers appointed TO the
exact liking Of the banking firm.
This action the part of Drexel Morgan d GO.
In the nature Of dlsagrceabe surprise TO wall
Street. IL had becn confidently expected that their
reply would be favorable When the letter was given
out, there was a rush to sell Richmond Terminal
securities and a pronounced decline was the result.
The letter leaves the heavily involved Terminal sys-
TEN where 1t before application was made TO the
great banking house. with the single difference tha'
now the component parts OF the system are IL! tile
hands of receivers whereby the pressure on the COM
panes is temporarily relieved by the protection of the
courts.
DrexeL Morgan & Co.'S letter was addressed to W.
e. Strong, chairman of the stockholders Committee
and follows:
Referring to our previous correspondence regarding the
Affairs OF the Richmond Terminal system, we beg to say
that we have made careful investigation Of the affairs
Of the Richmond West Point Terminal Railway and
warehouse Co allied corporations and Mr. Spencer
has, on behalf, made personal inspection Of the en-
tire system.
We have reached conclusion that reorganization is
feasible basis OF equity to all concerned one that we
be prepared to undertake. and one which, in our
opinion would place your property sound financial
basis. -
The unparalleled compile aeions ard difficulties which
must In this connection make 10 necessary we hceV
scarcely add that should your representatives ana
as far as possible protected against single interest
which might personal other reason desire 10 "it
successful carrying out Of such reorganization win
this mind deemed 1t essential before any aeuoh Oh
our part majority Of each class Of stock ana bohds
Of Richmond and West Terminal Railway and Ware
house Company be deposited with u.s. for the purpose OF
REORGANIZATION that all litigation should be put under
our control persons of selection subtucd for the
receivers now possession Of the proprties
Therefore upon learning Of the appointment OF receivers
Of the Richmond and Danvile property by the United
States Court, applied to Mr. w. p Clyde to know
whether in case we the reorganization the suit
under his control would 10 transferred to and the
present receivers resign favor Of Mr. Spencer stating
him that In our opinion, such course was essential
declines give any assurance ana our conversation
with him doubt his loyalty to any reorganza-
ton plan whatever, although he, as one Of your COM
mittee signed the request To undertake the same
As IN our OPINION 1t is essential to the success OF any
plan that during reorganization tbs properties nNoved
should be under our contvo, already mentioned and
a. the position BY Mr. Clyde makes this impossible
we are obliged reluctantly decline the invitation to un
dertake the Reorganization
There were at oOce many suImises as TO what turn
the Terminal affairs would next take Colonel strong
and Others were not inclined to consider DreXe
Morgan g. Co.'S answer final, but though> that, in
case the changes they desired made, they would
undertake the work Several hasty conferences we're
called, but no acton was taken beyond that given
below.
Much comment was excited by the pointed refer
ences in Drexel, Morgan CO.'S letter TO W. p Clyde
who was said to have occupied position no different
tho& ~ 9TH Mr.
Clyde said In reply:
II don't know whether Drexel, Morgan d 20.
think that the United States Court has resigned In my
favor or not 1t is absurd TO talk OF my rcius'u "
assure the appointment OF Mr. spencer as receiver ~
pIsce Of Messrs. Huidekoper and Foster 40 n"
control the court and the present receivers we're dis
charged how could guar sntee the appointment OF MI.
Spencerl
Tho application for placing the Richmond ana
Dany,lle Railroad under the protection OF the thl'ed
states Court was made with double oo!ect III 'ie"'
viz. -,
"First to protect II from the grasp OF the paruee
rrs,motinp the rnnaralelcd litigation in Georgia ana
also to protect IL against all and every other marin
which ID might suffer in case Drexel, Morgan w.
should as they have done, for any reason dechhe
To undertake the reorganization OF the property. by
giving the creditors and security holders ample time
properly and justly 10 protect theT own interests
from sacrifice, and meanwhile to preserve and pro
,.ct tho very great value which lies in the main
tenance Of the integrity OF the system as whole.
ait has accomplished thus far both OF these OBJ
tects and a little time will show that the Dah'ihe
system in safe and honest hands Will soon demonstrate
again TO its security holders and the public It's great
intrinsic strength and great earning power. which
alone have enabled 1t 10 survive its past troubles ana
which with or without reorganization are ana huS'
he the hope OF It's security holders ana CREDITORS
1t has all this Just as 1t had II heretofore anu
except to those who look for miracles In the way Vi
rad
meeting NJ the Stockholders Committee was held
T., tho afternoon at the Office Of Work. Strong q Co.,
n. which the following report, benf1ng suspic'oh Vi
sarcassn in It's Tone was given out by Mr. CIyue;
meeting OF the Advisory COMMITTEES OF The llchmohd
and West Point Terminal and Richmond anu DSi,'"' s
r,v holders was called this afternoon TO receive "o
,.,,.r ~ Nessrs prcxel Morgan Co.. which was gi'e"
N the press and 70 the committee to-day III "
n the request made the last meeting oi the con'
that Messrs Drexe Morgan Co. should prepare p'
80 roo.g,n,z,,lc OF the Richmond Terminal system
Tbe Letter OF Mes.rs Diexel. Morgan Co. was rsao !"
the committee, and the members oil inc co'i".."0 ~
much Qratined to learn from Messrs DfeNei 'Aois'"
90 that their thorough examination OF the properly
and account, of the system showed the properly 10 W O
nnysleally and financially In such condition thst IT,
organization is feasible on basis oil equity W a ,
cornod and one which, In their OPINION "ou'u ~
no nroperty on a sound financial basis" Inc con
regre tted that because Of the lagai action VIM" ~
o. necessary for the protection Of the ilchmono III"
panyille system since the coniInittees ih'i" " ,,,
n,exe, Morgan g. Co. on May 70 tneSo s'" -.
,rea % asc,,c 20 formulate any plan. The committee
rel however that the properties are now saie iron. an
,,oonfstc litigation and assaults which nave rece's ~
seriously threatened and embarrassed Do'h ie
and integrity and that the Riehmona ana D'N' =, ~
and Will row be operated by the receivers ne from an
such oppressive embarrassment and that the intrinsic
S a,n,no power OF the system will soon again oe''on
strste itself -. o,,o Iuly O.
I'm. committee then adjourned to meet again '"t W
IN ,.L, nm the further consideration oil Inc stun
,oa Of the Richmond and Yves, Point Terminal anu Ne"'
mond and Danvile properties ,.,o.o
Application been made to Judge BOND o. 'a ren,al
a. % allow the receivers pay the interest," ana re''
.ou", 49, ,e,, on its various securities and leased
lines on July I. -. - q .o,s,rnr.
Tho rnmors OF possible actions. based on "conS,ruc
hve larcenyn against some OF those WHO ""u "
~ -, rt.bnond Terminal and Georgia tch-