The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-05-24
APLAN TO SAVE TERMINAL.
The DTeXel- Morgan Scheme Given to
the Public.

PA1SsSNO,OOO 1ISJ mortgage bOnOS,
$75, 100000 in Preferred and $780,
100000 in Common Stock-Al the
Roads to Be Put Under One Sys-
tem-The Plan Provides for the Re-
ahzation of a Large Amount of
Cash.
New York May 23.-Drexel, Morgan &
Co. this afternoon issued a circular to
the security holders of the Richmond and
West Point Terminal Railway and Ware
house Company, Richmond and Danville.
and East Tennessee, Virginia and Geor-
gia Railway Company and system, in
which they state that they have decided
to undertake the reorganization of the
system and have formed a syndicate to
undertake the plan. If the secu-
rity holders who have deposited
their holdings Internationally desire
to withdraw they can do so, on
or before May 81, 1893, but all securities
withdrawn will not participate in the re-
organization. The circular states that
the Richmond and Danville and East Ten
nessee systems have large intrinsic value,
but must be reorganized at once if
/
absolute fixed charges of the Terminal
company amount annually to S0,O00,O00,
while the entire net earnings for the
fiscal year ending June 30, 1898, are esti-
mated at 81 900, 600, deficit of s.. 600 600
AS for the common stock Of the Ter
mlnal company and the several classes Of
stock of the East Tennessee company de
posted with the committee, participation
is further dependent on the payment OF
in nj TO,
when called. Failure to pay forfeits the
right to participate The committee re
serves the privilege to terminate at any
time the right to deposit securities under
the plan.
DETAILS OF THE SCHEME.
The details Of the scheme follow: The
Richmond Terminal Company, Richmond
and Danville system and the East Tenues-
see system are to be reOrganized, about
5000 miles of railway in all. The Georgia
Central is not included, although the in
terest in that system must be protected
The reorganization proposes to bring the
entire 5000 miles under one new rail
way company, preserving, however, local
independence in all matters relating to
operating and traffic, and to reduce the
fixed charges to So, 7S9 600. The capital
of the new company outstanding on COM
pletion of the reorganization is expected
to be about $4,000 bonds per mile of rail
road owned or controlled; about SIC. 900
preferred stock per mile of railroad owned
or controlled: about S25 900 common stock
per mile of railroad owned or controlled.
The proposed new fixed charges, in
Guiding the rental paid by the Cincinnati,
New Orleans and Texas Pacific, are esti-
mated at under 81, so per mile.
The new securities are to be as follows:
$40, ,000 of first consolidated mort
gage per cent. bonds.
S15,0O0,000 5 per cent. non-cumulative
preferred stock.
Sl60, 900, 600 common stock.
THE BOND RESERVE.
1t is estimated that out of this total
S35, ,3S3,000 of bonds will be reserved by
the new company under proper restric-
tiOnS to be used only for new construction,
betterments, purchases of rolling stock
and the extension of and additions TO the
system. Not over 81, 5000 is to be used
in any one calendar year, except that in
addition to this annual appropria-
tion a total of 81. 900 900 bonds NAV
be specifically appropriated with unani-
nous consent of the stock trustees for
the building of branches or extensions, if
undertaken within three years after the
creation of the new mortgage, all property
acquired with these bonds or their pro-
ceeds to be brought under the lien of the
mortgage. Additional bonds may be
used to acquire the Cincinnati Southern
railway, now rented, or additional inter
csts in the Georgia Central. There will
also be a reserve of about S15,0O0,000 out
Of the preferred stock. Drexel, Morgan
& Co., take their compensation, except
$780, 600 to- cover their Office expenses,
entirely in the new common stock at Sl5
per share. Such bonds as are earning
their interest are not disturbed at all.
Enough new bonds lin addition to the
S35, ,3S3, ,000) will be reserved to pay them
all at maturity. The assessment on Ter
minal common stock is $3.50 per share
The East Tennessee stocks are also as
sessed.
THE CASH TO BE OBTAINED.
The plan provides cash from as
sessnents on Terminal stock (cov-
cring that company's holdings of
Richmond and Danville and East Ten
nessee stock, s., ,750, 900; assessments on
East Tennessee stocks held by the pub
lie, 81, 100000; sales of $33 333, 900 new
common stock, S5,0O0,0O0; sales of s., ,000-
000new bonds, 81, 800 600; total S23, $50 900
The cash expenditures are estimated
at: For floating debts and equipment
notes, as estimated Jan. /, 1893, S12, 900
GOO; new construction and equipment on
the Richmond and Danville and East Ten
nessee systems, estimated during two
for the expense of reorganization and for
any contingencies a surplus to be avail
able for the general purposes of the new
company, 81. $50, 600; total. $25, ,250 600.
A syndicate of $l5,000,000 has been
formed to guarantee subscriptions by the
security holders of S33, 1888. 600 of the COM
mon stock Of the new company at SIS per
share, and for $, ,000,O 600 of the new com
pany's per cent bonds at
So per cent. and accrued interest
and to take the place and to succeed to
the rights of any holders of Richmond Ter
minal common stock and East Tennessee
stocks who shall not deposit their stock
and pay the assessments thereon.
THE FEATURE.
The feature Of the plan is the large
amount Of cash it raises. s23, $50 900. of
which only 81, 800, 900 comes from selling
bonds All the rest is from stock assess
ments and the sale Of new common stock.
The plan looks for early dividends on
the new preferred stock. The earnings
Of 1891 would pay per cent. on the new
preferred stock Eight million dollars,
actual money, Is 10 be spent az once for
new construction, equipment, etc.
The greatest feature Of the plan Is that
10 provides amply for all future needs.
An the railways will have 10 be- fore
closed. and the foreclosure suits win be
vigorously pressed Those cOnycrsant
with the reorganization and rs prospects
ngure Tho ueN preferred stock no 90