The times. [volume] (Richmond, Va.) 1890-1903, 1893-07-19
WHY THE SCHEME FAILED.
A Statement by the Central Railway Re
organization Committee.

NEW YORK. July 1s.-The following
circular was to-day issued 70 the secu-
rlty holders Of the Central Railroad and
Banking Company Of Georgia and Of
its allied property:
The undersigned committee which, at
the request OF the board OF directors Of
the Central Railroad and Banking Com
pany Of Georgia, as we'll as many of its
security holders and creditors. consented
10 prepare plan Of reorganization OF
the Georgia railroad system, have re-
luctantly come 70 the conclusion that
a reorganization upon the lines hereto
fore submitted has become impractical
BILE.
Your committee. in determining upon
the basis for a sound and conservative
reorganization, relying upon reports OF
able experts and the past earnings Of
the property. as shown In the annual
reports OF the company, I'm conjunction
with the receiver, estimated the minimum
net earnings which the system had pro-
duced at Sl.S0O,O0O per annum.
The earnings for the past twelve
months. however. have fallen much short
OF this sum. Moreover, the holders OF
the securities Of the allied lines, not
withstanding the liberal and equitable
terms offered TO them. have not given
the plan their undivided and prompt sup
port.
Many and vexatlous liugauons have
been on, and receverships have resulted
in partial dismembership Of the system.
The tripartite bondhoders did not accept
the plan, and a decree has been directed
to be entered ordering a sale Of the Cen
tral Company's property and OF tAe
Southwestern railroad for the payment
Of Indebtedness declared 10 be lien
thereon under the terms Of the tripartite
bonds.
Your committee nevertheless would
have continued the efforts 10 carry the
reorganization into effect, and, with the
financial aid literally placed al their dis
posal from the outset, could, In their
opinion, finally have overcome all obsta-
cles but for the disappointing character
Of the actual results Of the operation of
the system.
In the face Of these facts your COM
mittee do not feel justified I'm proceeding
under the published plan, and therefore
declare that plan imperative, and notify
those who have deposited their securities
that they are at liberty 70 withdraw them
without expense.
The experience gained by your commit
tee warrants them I'm advising the security
holders to forego, at this inopportune mo-
ment. any plan for the reorganization OF
the Georgia Central system. IL will be
Of far greater advantage TO all interests
II the property be permitted 10 remain
I'm the custody Of the United States Courts
until the earning capacity Of the system
be re-established. both through a return
TO normal conditions In the business OF
the country tributary 10 the Georgia
Central lines, and through a restoration
u rates, which it Is ayerred are now
fixed by the railroad commissioners Of
the State Of Georgia upon a basis so
low as effectually 10 prevent the prof.
table operation Of railroad property. In
The meantime the surplus earnings can
be- advantageously used for necessary
TO the property. and I'm re-
Iucing the overdue interest and principal
= the tripartite bonds; and upon a re-
urn 10 normal financial conditions a re-
which shall do justice TO
III interested may become practicable.
Negotiations are now pending with the |
.ecelyer looking 10 an extension on rea- |
,onable terms OF the floating debt Of the |
.ompany. amounting 20 more than five |
millions OF dollars. due on July ], 1893 |
md OF which the members OF your COM
nittee are large holders through ad- |
rances made by them for the protection |
Il the interests OF the company. Ii is the |
.xpressed desire OF large majority In |
interest Of the holders of the floating |
ebt TO appoint "a committee |
o care for the interests OF the floating
and, II so requested. to act