The times. [volume] (Richmond, Va.) 1890-1903, 1892-07-03
DANyrLLE r.. II. REcErvERsHIp.
Mr. Ciyde's Reply to Drsxel, Morgan
a 90.


Mr. Clyde, commenting to q reporter upon
the letter Of Messrs. Drexel. Morgan d. TO.
to Chairman Strong. of the security holders
committee, declining TO undertake the re-
organization OF the Richmond leIullu"ii
which was delivered by Messrs. Dio eN',,
Morgan & Co. TO the public and 70 1he ~. ~.
mittee Of security holders to-day Say sa.s'
the favorable conclusions reacne1 ny ,,i,,,of
Drexel, Morgan Co. as 70 the iea7 Iosie
a reorganization of the system on no,
Of equity and the practicability, OF placlhIj
the property upon SOUND hh" ii
basis'was the only conclusion Whlcn uH.n-
terested experts and bankers coulu IeaC. 49,
this subject. The soundness auu ~. ,oIi
strength Of the Danylle system y ~ vi
known 20 those who are familiar WIN ~ ~
one which will demonstrate itself 20 any
competent examiner who VIII looH ll'oI ~
MIR Clvdes views upon these points are wen
known 10 every security holder VINO a1senug ~
the various meetings of security ~
April and May, which resulted !" ~
application TO Messrs. DTeAel 10
gan a Co., as ne asseIIeu ,,,oti7,.rs
plainly and emphatically az these uccviH-
and took the ground then aud there "hiVh
he maintains now. that the chief trOuOle WIN
the Danville system is neither intrinsic HbaH-
cihl or physical weakness. but the ihc1 IuH1
through bad financial management iunn'ps
over a period OF years, 10 had become PuDl'JJJ
discredlted and consequently helpless uuuo5
an amount Of floating debt which. with gooa
management and consequent credit, "ou'u
have caused 10 no trouble. nat e1yn
such discredit. however. has IN the
eyes of creditors attached much more
e. the management than 70 the pI.P
erty. is shown by the fact that the foatlnB
debt of between 5000 900 and 16,UOJ'UyD'
which. though large IN the aggregate Is uy
No. means large as railroad finances go LOT
six thousand miles of railway, and - 80
amply secured by collateral TINT IT has been
carried by New Ork banks without question
through all the recent unpleasant turmolis OF
the company. Messrs. DreXei Morgan a. Co., -
letter further shows TO any one who Will look
calmly at the situation az the security hold
ers are fortunately for themselves beginning
% do. that the greatest want of this much
aOused system is honest. capable manage
ment and time enough % re-establish It's
credit, both of which wants are now PROVIDED
by the protection secured for the system from
the United States Court in the suits OF the
gentlemen who have acted with him ID secur-
Ing the appointment of Messrs Huidekoper
and Foster as receivers.
The frankness with which Messrs. Drexel,
Morgan a. Co. state the favorable results OF
their examination into the property Is IN re-
freshing contrast with the gloomy and, as
events have shown. mistaken statements
of those whose examinations have been less
thorough and complete.
Mr.. CLYDE says further that unless Messrs.
DreXel, Morgan d. Co. have, as q further re-
suit of their examination, become convinced
that the property, being now fully projected,
is in fair way 10 gradually recover its tnan-
cial health and credit. and therefore stands
in no pressing need OF immediate or radical
il is TO be regretted that they
should have declined % undertake a roOrgaD-
izatiOn which they show could have been
easily contaminated under such favorable
circumstances.
With regard 20 the first reason Messrs.
DreXel Morgan a. Co. assign for their not
proceeding with the reOrganizatOn-tO wit,
that they Deem II essential before any ac-
ton on their part that q majority OF eRch
class Of the stock aud bonds of the Terminal
Company should be deposited with them for
the purpose of reorganization" the security
holders who were consulted by Mr.. Clyde
without q single exception pronounced this
equivalent TO a blind pOOl' and declined TO
consider such a thing even with house Of
such eminence as that Of Drexel Morgan a.
Co. This difference of views. while untOrtu-
nate. is probably irTecOncilable, unless
Alossrs. Drexel. Morgan ~ Co. see fit TO recede
from the conditions they demand.
With regard 10 the second reason which
Messrs. Drexel. Morgan 81 Co. assign. tO-wit
that they were unable 90 secure satisfactory
assurances that OH litigation would be put
under their control and that the present re-
COVERS of The Richmond and Danvlle prop
erty would resign III favor IF Mr. Spencer. 1t
is T. be regretted that these gentlemen should
have seen fit to exact from him conditions
which he had neither the right 10 accede to
nor the power TO carry out Tor the reason that
this suit. being brought for the benefit Of all
whom 1t might concern and thereby giving
the right 10 all interested TO intervene and in
viting them to do So can DO controlled by no
one party.
As 10 Mr.. Clydes presuming at their request
TO pledge himself 10 substitute Mr.. Spencer
OF anyone else for the receivers now In pos
session Of the properties, any attempt or sug
gesti0n toward carrying out such a pledge
would be regarded both by Judge Bond and
his receivers as "a gratuitous insult by Mr.
Clyde.
Mr. Clyde further states that the bill
brought before Judge Bond by himself and
others, was drawn especially with reference
10 facilitating reorganization. IL was ex-
pected that Messrs DreXel. Morgan * Co.
would formulate plan would communi-
cate the nature of this plan 10 the security
tho security holders. would with the com
piainants and receivers 90 before
the court and obtain either the abrO-
cation of the receivershlps or such
as should then appear 70 be
for the interest of the property This was
-A IlhluC4 anu liADiAoAtA bf -lAls Ail't AiN /
the other cOmpanants at the time of the ap-
oOntment of the receivers. and has since |
been personally urged by him upon Messrs. !
Drexel Morgan q Co.. who. however. unfor- /
.unately for reasons unexplained. have seen |
&c TO substitute for this obvious and bust /
less-like course the arbitrary and imprac- /
.icable demands heretofore alluded to.
Referring 10 the allegations volunteered by |
dessrs DreXel. Morgan d Co. rejecting upon |
himself and questioning his loyalty to any |
plan whatever" Mr.. Clyde |
Jays that if. as would appear TO be the case |
,Iessrs Drexel. Morgan 81 Co. suddenly |
ound themselves In need of scapegoat |
n connection with this business. which |
hey have had in hand for more than |
month. it is q matter of not the /
highest consequence 10 the security holders /
" the public whether he or some one else
hall have the honor Of serving them in this |
apacity. and it is, therefore. quite unneces-
airy TO turn aside from the serious business |
n hand 70 wit, the rehabilitation of the Ter
ninal property, credit and securties-to |
iotice this personal attack farther than 70
uggest that the correspondence which has
PASSED between Messrs. Drexel. Morgan a.
Co. and himself on this matter. which they /
ave ignored in their letter of declnation, is
d their hands and they are at full liberty TO
publish the same at any time.
Mr. Clyde further says that he wishes most
distinctly and emphatically 10 protest against
4 1 -