The morning news. [volume] (Savannah, Ga.) 1887-1900, 1893-04-02
THE MORNING NEWS: SUNDAY April 1893sIxTEEN PAGES
The Centrars Reorzan,z alton.

The CentraIs REORGANIZATION.
Il was expected that the plan for the re-
organization Of the Central Railroad aod
Banking Company would be attacked. and
that a number OF legal battles would have
to be fought before reorganization could be
effected. OF the suits thus far begun one or
two are, apparently, for the purpose Of
dismemb ering the system In order 20 build
up other systems from the fragments. and
the indications are that the others have for
their object the getting Of better terms
from the reorganization committee for Ger
tain Of tho securities. The only one OF the
suits that is calculated to arrest the atten-
ton Of security holders is that begun in
| Washington on Friday, in which an
| injunction is asked TO prevent the fore
! closure Of the mortgage which is the basis
/ of the tripartite bonds. The plaintiffs in
| this su offer to taEe up the tripartite
/ bonds and allege that their object Is TO
| protect the junior security holders. The
inference is that they have plan Of reorgani-
zation which they purpose to submit to the
security holders.
| A little consideration is sufficient to con
vince disinteresJed observer that the in
terests of the great majority Of the security
! holders would not be bettered by joining
hands with the plaintiffs in this Injunction
suit. In the first place it is not apparent
that they have plan OF reorganization, or
even strong financial backing. The fact
that they, or the guarantee company
in sympathy with them, offer to take
the tripertite bonds from the holders
of them at their face value and accrued in
terest amounts to nothing. There is no bet
ter security than the tripartite bonds, and
they pay en- exorbitant rate of interest
Anybody would like to get them and hold
them for years. II is to the interest of
security holders that they shall be paid as
soon as possible. It is worthy Of notice
that the plaintiffs in the injunction suit do
DOT purpose to pay them. They seek to ao-
quire ownership of them, and then reorgan-
ize the Central's properties to suit thetn-
selves
But what sort Of securities do the plain
tiffs in this suit ownl According TO their
own showing they own bonds Of two in
solvent roads that are not included in the
Centraps reorganization plan. These bonds
that they have comparatively little value.
II tbat was the reason they were
left out Che inference is that IL the owners
Of them SHOULD succeed 10 defeating the re-
org 4uization plan, aud should propose a
plan of their own, they would place a
greater value upon their securities than 1t
is believed they possess, aud the holders Of
really valuable securities would get less
than if the present plan should become
operative.
II is true that It is possible to propose
plan that offers moro than the present
one, but would it be q safe onel The
property can be made to earn only so much
money and it would be folly to reorganize
it upon any other basis than its net earn
ings. The security holders have had all
they want of 6nanciering upon possible
future earnings II the Central's annual
reports tell the truth, and there is every
reason to believe they do, one Of the reasons
why the Central is in its present unfortunate
condition was the indorsing of bonds of
roads that do not pay operating expenses.
And it is these bonds that it is proposed by
the plaintiffs in theinjunction suit to saddle
upon the central In plan OF reorganization
of their own.
If we are not mistaken the great majority
Of the security holders OF the Central sys-
TEN will give no. encouragement to those
who are tryingto defeat the present plan of
reorganization, which gives them more
than they are likely to get by any other
plan. Other plans will not have their in-
terests in view; they will have primarily
the interests of few who hope 20 get more
for themselves under plan of their own.
The defeat of the present plan means
more litigation and delay and expense.
The longer reorganization is put Off the
less security holders will get. Expenses Of
all sorts will accumulate and the upshot Of
the business will be that what the lawyers,
reorganization committees aud financiers
leave will hardly be worth having.