The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1893-12-24
Statement from directors.


BOSTON, Dec. 23.-The following state
ment has been issued TO the stockholders
and creditors of the Atcllison, Topeka &
Santa Fe Railroad Company and system:
1.-THE directors of the Atchison. Topeka &
Santa Fe railroad and the St Louis & San
FRANCISCO railroad, comprising, with their
auxiliary owned and controlled lines, the
railroad system of the Atchison, Topeka K
Santa Fe railroad system are compelled to
announce that the sudden termination dur
ing the current week of pending negota-
uons for financial relief has caused tenn
porary embarrassment to the companies
and will prevent further payments of bor
rowed money now due and interest coupons
of the several companies maturing Jan. 1,
1884, proX., OF all bonds or funded, direct or
guaranteed obligations. Including the cou-
pons of the general mortgage bonds of the
Atchison, Topeka * Santa Fe Railroad
Company and of the St. Louis & San Fran
cisco Railroad Company. The continued
financial depression III America and Europe,
with coincident shrinkage in market prices
of securities owned BY. the company and
used as collateral has brought an enforced
reduction Of the floating debt, causing ex-
cessiVe demands upon the cash available
from net earnings for interest requirements.
Under the circumstances, it becomes the
duty of the directors TO take such steps as
may best conserve and protect the interests
ors and prevent the disntegration of the
railroad system.
In view OF the comparatively small and
temporary RELIEF required in the present
emergency, considering the magnitude OF
the railway system involved its earnings.
power and resources, satisfactory physical
condition and working organizations,
which relief cannot be speedily secured in
the present depressed condition of financial
affairs generally, the directors believe that
the protection or the courts should be in
voked and the executive and legal officers
of the several companies have been au-
thoriZed and instructed not to resist ap-
plication for receivers, but D make an
swers setting forth the facts d admitting
the situation and temporary embarrass-
ment of the companies
THE Atchison system as whole in
cluding the St. Louis & San Francisco
railroad and other auxiliary lines, COM
prising 1854 miles of railroad, is amply
able, even under the present adverse con-
ditions TO earn a safe balance above it's
fixed charges if relieved from floating debt,
which is not greater at this time than
eighteen months ago. The changed finan-
cial condition and lower prices of security
owned by the companies and used as col
lateral has brought about the situation
now reported. The obligations of the COM
panies are as follows Time notes and
loans on collateral due December, 1893, to
lateral call, s., 200, ,000 total notes and
loans, $6.3OO00O; coupon interest and other
fixed obligations due Jan. l, 1894, proX.,
$S9OO.00O. The Western accounts are about
normal, with remittances for interest pay
ments turned back to provide for the No
rent requirements. With ordinary finan-
ciai conditions prevailing in America
and Europe the market value of
panies and used as collateral is about equal
to the entire amount Of the above obliga-
tionS.
'The directors will promptly prepare and
submit TO the security holders and creditors
OF the company, for their approval, plans
for their relief from the existing embar-
rassment, which should be considerd as
temporary
In addition to the above statement, Pres
ident Renhart said this evening that, up
to last Monday, the management was con-
fdent OF securing the necessary funds to
carry the company over Jan. /. On that
day It became plain that Mr.. MagOun would
not survive, and il was believed that his
death would be followed by renewed at
tacks on the securities of the companies
that would lower the prices of it's collat-
eral pledged to secure the floating debt and
compel the company to use a part OF the
loans. AS this would manifestly be unfair to
those who have undertaken to help the COM
pany over the first of the year. since
it would simply bring them into situation
that could not be remedied by their action,
it was decided to take the course set forth
by the board. Mr.. Reinhart said further
that his statement made upon his arrival
from Europe. that the interest due jan. |
would be paid. WAS entirely warranted by
the state or negotiations at that time, AMI
that he did not assert, as had been reported
that the money for that purpose was in
hand. In the usual course of business il
has not been the practice of the company
to have all the means to meet interest in
bank at the East earlier than a week be-
fore payment Is required, funds being re-
mitted from the West