The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-07-19
FALL OF THE HOLLINS PLAN.
Text OF the Circular TO the Security
Holders,

Disappotntment in the Earnings OF
the System the Chief Cause of the
Abandonment OF the PIan-The Ill
Judged Opposition of Security Hold
ers Serious obstacle-The Present
No Time to Re-organize.
New York July 1S.-The following cir
cular was to-day issued to the security
holders of the Central Railroad and
Banking Company of Georgia of and its
alallied property:
The undersigned committee, which at the
request Of the board OF directors of the Gem
tral Railroad and Banking Company OF Geor-
gia, Us well as many OF its securityhoders
and creditors, consented to prepare plan OF
reorganization of thesGeorgia Central railroad
system, has reluctantly como to the conclu.
sion thatreorganization upon the lines here
tofore submitted has become impracticable.
Your committee in determining upon the
basis for a sound and conservative reorgani-
zation, relying upon reports OF able experts
and the past earnings Of the property as
shown In the annual reports Of the company,
in conjunction with the receiver, estimated
the minimum net earnings which the system
had produced at Il 100000 per annum. The
earnings for the past month, however, have
Moreover, the holders of securities of allied
lines, Notwithstanding the liberal and eQuita-
bic terms offered to them, have not given
the plan their undivided and prompt support,
Many and vexatiOus littgations have been on
ana recciverships have resulted In partial dis
membership Of the system. The tripartitc
bondholders did not accept the plan, and q
decree has been directed TO be entered order
ing the sale of the Central Company's proper
ty and OF the Southwestern Railroad for the
payment Of the indebtedness declared
to be d lien thereon under the terms
Of the tripartite bonds. Your committee.
nevertheless, would have continued its ef-
forts to carry the reorganization into effect
and with financial aid literally placed at their
disposal from the outset could in their opin-
ion, finally have overcome all obstacles but
for the disappointing character Of the actual
results OF the operation Of the system.
In the face of these facts your committee
do not feel justified in proceeding under the
published plan, and therefore declare that
plan imperative and notify those who have
deposited their securities that they arc at
liberty to withdraw them without expense.
The experience gained by your committee
warrants them in advising the security
holders to forego at this inopportune
moment any plan for reorganization Of the
Georgia Central system. II will be Of far
greater advantage to oil interests If the prop
erty is permitted to remain in the custody OF
the United States courts until the earning ca
paeity Of the system be re-establshed, both
through q return to normal conditions in tho
business Of the country tributary TO theGeor-
gia Central lines and through the restoration OF
rates which It Is averred are now fixed by
the railroad commissioners OF the state OF
n l,aq qfg o,In az
! prevent profitable operation Of railroad
property.s In the meantime the surplus
earnings can be advantageously used for
necessary betterments to the property and in
reducing the overdue interest and principal OF
the triparttte bonds, and upon n return to
normal financial conditions, a reorganization
which shall do justice to all interests may be-
come practicable.
Negotiations are now pending with the ro-
ceiver looking to an extension on reasonable
terms OF the floating debt OF the company,
amounting to more than five millions Of dol
lars due on July /, 1893. and OF which the
members Of your committee are large holders
through advances made by them for
the protection Of the interests
OF the company. It is the expressed desire OF
"a large majority in interest OF the holders OF
the floating debt to appoint committee to
tdTC lot Tue lubtIbbAH VI Lllb uO1bluS uEUh
holders and, II so requested, TO act In an advi-
sorry capacity In the matter OF future rehabili-
tation Of the property.
Your committee have also been in confer
ence with several interests which have not
accepted the proposed plan. If these confer
ences result IN the PRONUNCIATION of a plan
which in the Judgment OF the committee rep
resenting the holders OF the floating debt
seems fair and likely TO succeed, the members
Of this committee, las creditors OF the company,
through the floating debt viii cheer
fully contribute to its success. To
facilitate any reorganization which may be
determined upon hereafter your committee
have arranged with the Mercantile Trust
Company that securities already deposited
may be put in its custody without expense to
depositors, and subject TO withdrawal at any
time.
New York July IA, 1893.
by order OF committee,
WIN. r. WHARTON, Sec'y.