The times. [volume] (Richmond, Va.) 1890-1903, 1893-05-24
THE PLAN MADE PUBLIC
METHOD or REORGANIZATION OF
THE RICHMOND TERMINAL
Given Out by Messrs. DrexeI, Morgan AZ Co.
The Expenditures to be- Reduced
Below the Earnings.


the security holders Of the Richmond and
West Point Terminal Railway and Ware
house Company, Richmond and Danyllle'
and East Tennessee. Virginia and Georgia
system, in which they state that they
| have decided to undertake the reorganiza-
tion Of the system and have formed a
| syndicate TO undertake the plans If the
security holders who have deposited their
holdings Internationally desire to with
draw they can do so on or before May 81,
1898, but all securities Withdrawn VIII not
participate In the reorganization.
The circular states that the Richmond
and Danville and East Tennessee systems
have large intrinsic value. but must be re-
| organized at once II disintegration is TO
be avoided. The absolute fixed charges Of
the Terminal Company amount annually
TO 100000 while the entire net earnings
for the fiscal year ending June sd, 1893.
are estimated at S000,000-a deficit OF
S2.000000. AS for the common stock OF the
Terminal Company and the several classes
Of the stock OF the East Tennessee Com
pany deposited with the committee. par
ticipation is further dependent on the
payment of assessments In four equal
instalments when called. The failure 20
pay forfeits the right to participate. The
committee reserves the privilege TO ter
inmate at any time the right TO deposit
securities under the plan. The details or
the scheme follows:
The Richmond Terminal Company.
Richmond and Danville system and East
Tennessee system 70 be reOrganized. about
5000 miles Of railway I'm all. The Georgia
Central IS not included, although the IN
terest I'm that system must be protected.
The reorganization proposes TO bring the
entire 5000 miles under one new railway
| company. preserving however, local In
dependence I'm all matters relating to
operating and traffic, and TO reduce fixed
charges TO $6.7S9,o00.
The capital of the new company out
standing on the completion of the re-
organization is expected TO be: About
$4,000 OF bonds per mile of railroad
owned or controlled: about 10000 Of pre-
ferred stock per mile Of railroad owned
or controlled; about $4,000 Of common
stock per mile Of railroad owned or con-
troed.
The proposed new fixed charges Gn-
cludinc rental paid by c. N. O. and
Texas Paclhc) are estimated at under
$1.lj0 per mile.
The new securities are 10 be as follows:
one hundred and forty million frst con-
sOlidated mortgage 8 per cent. bonds.
S75.00D00O per cent. non-cumulatiye pre-
ferred stock and $3.50 100000 common stock
| IL is estimated that out Of this toal,
| $35.3s300O Of bonds will be reserved by
| the rev company under proper restric-
| tions 10 be used only for new construc-
| ton. betterments, purchases Of rolling
stock and the extensions Of and additions
| to the sysem, not over $2500,0o0 TO be
| used I'm any one calendar year, except
that, I'm addition to this annual appro-
| priation total Of 100000 OF bonds may
| be specifically appropriated, with the
unanimous consent Of the stock trustees.
| for the building Of branches or extern
! sions, If undertaken within three years
| after the creation Of the new mortgage.
| All property acquired with these bonds
or their proceeds are 10 be brought under
the lien q the mortgage.
Additional bonds may be issued 10 ac-
| qure the Cincinnati Southern railroad.
now rented. or additional interests in
the Georgia Central.
There Will also be a reserve Of about
SljW0.00O out OF the preferred stock.
DreXel. Morgan x co. take their COM
pensatiOn. except 100000 to cover their
office expenses, entirely in the new com
mon stock at fifteen dollars per share.
Sucn bonds as are earning their inter
est are not disturbed at all Enough new
bonds, in addition to the So, $4,000. Will
be reserved TO pay them all at maturity.
The assessment on Terminal common
stock is twelve and a half dollars per
share. The East Tennessee stocks are
also assessed.
The plan provides cash from. Assess
ments on the Terminal stock Covering
that ccmpany's holding OF Rlchmord and
Danv'le and East Tennessee stock, So
10000; assessments on East Tennessee
stocks held by public. &,70O.nO; sale Of
S3,333,OO0 new common stock &.0JO0O:
sales Of $S,0OQ9Og new bonds. $G.SO00OO.
Total 81, $4,000
The cash expenditures are estimated at:
For floating debts and equipment notes.
as estimated January /. 1898. $l2,-
100000; new construction and equip
ment on Richmond and Dam
Vile and East Tenr essee system, estl-
mated during two years, say 10000,
leaving 10 provide for expense of re-
organization and for any contingencies.
surplus 10 be available for the general
purposes Of the new company, 81, $4,000.
Total, S23 go, 700.
syndicate Of $1,000 900 has been form
ed to guarantee subscriptions by security
holders for $33, 1888, 900 common stock OF
the new company at Sl5 per share and
for 100000 Of the new cOmpany's 5 per
cent. bonds at s. per cent and accrued
interest and TO take place and 10 sue
ceed 10 the rights of any holders Of the
Richmond Terminal common stock and
East Tennessee stock. who shall not de-
posit their stock and pay assessments
thereon.
The feature OF the plan is the large
lluf of cash IL raised d .
which only s6,SO0.OO0 comes from selling
bonds. All the rest is from stock as
sessments and sale OF new common stock
The plan looks for early dividends on
the new preferred stock The earnings
Of lSyl would pay four per cent. on the
new preferred stock. Eight million dol
lOrs actual money is TO be spent at once
for new construction, equipment. &c.
The other feature Of the plan is that
IL provides amply for all future needs
All the railways viii have TO be fore
closed, and foreclosure suits will be Wig
orously pressed.
Those eonversant with the reorgani-
zation and its prospects figure the new
preferred stock al sixty. The syndicate
guarantees a sale OF 100000 OF the
bonds az eighty-fve per cent, and Of
Si3 3l3 900 common stock at fifteen dollars
per share, so the minimum value Of those
securities is fixed. Figuring the new pre-
ferred stock as low as fifty per cent.
the Terminal securities are worth to-
day about seyenty-iiye per cent. for the
6s. thrty-nine per cent for the SIS.
twenty-eight per cent. for the preferred
stock. and eight and three-fourths Der
cent for the common stock.
Immediate application will be made TO
list the reorganization receipts The
,.eorga nizatiOn will be conducted under