New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1892-05-22
ATCHISON'S NEW BONDS.
PLAN OF THE PROPOSED EXCHANGE.
TO ISSUE 500 ooc 900 SECOND MORTGAGE BONDS
TO RETIRE INCOME BONDS AND PRO


VIDE FOR IMPROVEMENTS.
The Official announcement OF the proposed oohu
programme OF the Atchison, Topeka and santa re
will be made public next Wednesday. The iOIo"-
ing preliminary statement however, has been made by
Vice President Reinlart confirming the outline gwen
In Fridays Tribune
The Atchison plan OF conversion contained IN
circular No 68. which will be pnolished III .""
Msy 25 Is the completion Of the Reorganization pan
nut i'm effect October 49, 1882 and returns inc ophsd
tons Of the company, including Its Income Donds
and capital stock, 10 a fixed and stable OASIS Inc
necessity Of the reorganization OF the Atcmsoh oo"
many in 1889 arose from the fact that the net earn
ings OF the company for the year eaoeo June o.
1850 were but SG.772 600 owing largely to the loss
~ oredits brought about by floating debt OF 81.
600 900 and no cash in hand nor means OF procuring
the same place the property In such coo''ioh 'ha
the road could be operated 10 produce the best re-
suits The income bond created under the reorganza
lion was q temporary expedient. and was such an
obligation. which was made so elastic as to permit
the management Of the company TO use all OF the cash
above the obligatory fixed charges OF the company,
should occasion require.
After an experience Of three years with the money
so provided as we'll the cash produced under the
reconciliation, the company reaches point where the
net earnings for the current fiscal year to June 81
will not he less than ST. 100000 which includes earn
ings from railway operations rs well as net cash re-
turns from Investments. This amount OF net earn
ngs has grown steadily since the successful outcome
Of the reorganization, thus rendering substantial
proof that with ample meaDs at command OF the com
pany. alone should the net earnings be made to
Increase but that the holders Of all classes Of obga
tons OF the company. including the capital stock, can
know hereafter precisely what the operations of the
company are well the intrinsic worth OF their
securities.
The income bondhoder In the conversion will
obtain security which will return fixed interest of
known amount not subject TO violent fluctuations Of
the market In the absence OF knowledge during the
entle year to how much his obligation
will be declared entitled to. The stakeholder
will know that he Is entitled TO all the money
produced by the company from Its railroad operations
and other over and above its known fixed
charges.
The plan provides for the creation of second
mortgage, under which there will issue al
seO,OOOOOO of bonds, termed Glass A, with grade
interest, beginning July l. lo9:, at IL per cent
for the first fifteen months, per cent for the
year beginning october /. 1893. 3 IL per cent for
the Year beginning october 1, 1894, and per
cent for the year beginning october l, 1895. and
thereafter Also for $50 90 600 bonds issued
tile indenture. termed Class h. carrying
Interest, beginning with July l. 1892. at per cent
annum, under which no greater amount than $1,000,
900 in any year issIe the proceeds Of which
will apply specifically and only TO Improvements. In
Gliding equipment. existing mileage Of the Atchi-
son, Topeka and santa Fe Railroad system, as ii Is
described In circular No SO.
1t Is also provided that If the Improvements do
call for the Issue OF jO0OOO0 OF these bonds in
any year the excess amount Of such proceed can
apply in the next following but in no one year
TO more than the proceeds Of Sj000000. AT the eX-
piration of four years classes A" and b" become
ldentically the bond issue. Coupons under these
bonds payable semi-annually The right Is re
served 10 the company in tIe second mortgage after
the expiration of the four year, and one quarter To
issue in any one year not more than S2,'Oo'Ooo OF
second mortgage per cent bonds foi the same spe
chic purposes, up 10 the limit 81 SJOOOJ,oOO but Inc
proceeds not to apply, however, 10 the extension
IN any dr.cSn Of me com eompanys ,,o nmes
pany in tho fOur Yeas beginning with July /, lcJ2
for the Second year. SO 900 Tor The hiru year
sl1,9OO,oOo AS before stated The net earnings FOR
the current year ending Sune 80. 1872, are not less
than Sl1 100000, and ne position OF the company, With
ample and stated hean> provided Tor improvements,
can 10 readily improvements referred 10 include
equipment The first ,.Dsi, fol OVER s2.5OOOOO. GOV
.iing purchased in l-JO ami len Tor the company
has cancelled and the property covered by the
same placed under OF the general and
second mortgage; the second car tru t. upon which
the company is at present issuing - jOOoOJ bonds,
will be provided for out the second mortgage bonds
Glass b, to be- issued in the next tour years.
The value of new property placed under lien.
including the equipment snice the date OF reoreani
z,tion of the company, October. 10 1850. approx
mates SlO,000,0oO which is S1COJ,0Oo more than
that provided from the S5,OOOOOO cash fund produced
in tie reorganization. In The AtclisOn company's
accounts 1t lGs been the custom to include III opca-
ing expenses items strictly Improvements, H. the
form OF renewals OF absolutely new material ana
structures replacing those OF lesser production This
class OF construction and machinery Will also be GOV
cred with Che proceeds from the Class b second
mortgage bonds thus tending 10 reduction OF The
operating expenses. As has been demonstrated also.
operating expenses are naturally decreased Dy i'm
proved condition OF plan, that with the experience
the management has had, 1t feels entirely safe In
returning the company and lis obligations to per
manent basis. which the management has always hi1
In contemplation from the time when necessity for
REORGANIZATION arose. The nrst sstie OF Glass Is
bones will be offered TO present income bondholdcrs
and the subscription has been underwrltten Two
and onehalf per cent interest payable september /.
1892 has been declared income bond coupons for
current year TO June 30