New-York tribune., 1893-12-24
WHY THE ROAD FELL.
AN OFFICIAL CIRCULAR FROM THE BOARD
OF DIRECTORS.


STATEMENT OF TIE FLOATING DEET-ME' MA
GoUN's DEATH INTERRUPTED NEGorlA'
TIoNs-wALL STREET SURPRISED ONLY
AT TIE LAsT-A SYSTEM ESol''
NOUS IN CAPITAIIzATIoY AND
MILEAGE - Mr.. REIN
uART's PERSONAL
EXPLANATION.
Not until late hour yesterday was the an
nouncement officially made that the Atchsoh'
Topeka and Santa Fe Railroad had been placed
by it's managers under the protection OF the
courts Wall Street had feared this result ever
since the return Of j. w. Reinhart, the pres-
dent. and Colonel John J. McCook. the general
counsel of the company from Europe on Decem-
Der a. when the unfavorable rumors from Lon
don which had attended the visit or these men
to London were not contradicted in detail by
Mr. Reinhart to the satisfaction Of downtown
bankers The death Of George c. MaGcun OF the
banking firm Of Barring Magoun & Co.. the
firm prominently identified with the financing
of the Atchison Company, interfered with the
plans which had been under way for carrying
the company over the period Of January ohliEa-
tory payments. Mr.. Renhart, when he came
home from EurOp, emphatcally stated that the
company would pay its January interest, ana,
owing to his emphatic assurances at that time.
Wall Street refused 10 believe that a receiver
ship WAS possible. Last week. however. the
president and other prominent New-York di-
rectors of the Atchison kept themselves rgor-
ously secluded from representatives OF the press.
and the decline of the ccmpanys securities at
the Stock Exchange told the tale of approach
ing collapse.
The fall of the Atchison system. with It's 10000
mil Of He'd nd cd "A &
a shock to the financial community only because
of the recent positive assurances that It would
be averted. The history Of the company In the
last few years has led many observers to pre-
diet the event a receivetship was confidently
expected by Jay Gould prior to the reorganization
scheme of 1889 and his friends last night recalled
his statements as belated evidence of the famous
capitalists far-seeing judgment. The enormous
mileage that fell under the control Of one set OF
managers has been said by experienced railroad
men to be In itself too great a task. And the
growth Of this tremendous system extending
from Chicago to Callfornia's borders. was at
tended by the heaping up Of obligations that
would have tried the strongest railroad in all but
the most prosperous times. Its financial plan.
when reorganization through n receivership was
refused in 1889 has contemplated an increasing
yearly scale OF fixed charges. while the tendency
of railway rates at the West was DOWNWARD
The company was left without a sufficient mar
/
came adverse.
At late hour last evening the following OFF,
cial circular was given out:
REMNANTS STATEMENT.
Boston. Mass. December q. 1896
son. Topeka and Santa Fe Railroad company
The directors Of the Atchson. Topeka and Santa
re Railroad and the ST. Louis , ana san San faIsfy
owned and controlled lines. the railroad system OF
the Atchson. Topeka and Santa re Railroad Com, sIr
termination during the week of pending neso,n aI
tions financial relief has caused ,emH9rary en-
further payments Of borrowed money now que ana
interest coupons OF the several GGpanne9 pn m f,nde9
direct and guaranteed Obligations. Including N, tne
SON Topeka and santa re Railroad Company and
Of the ST. Louis and San Francisco Railway Coni-
ca and Europe with coincident shrinkage in mar,
ket prices Of securities owned by me company ;yd ana
r,iuction OF the floating debt causing excessTe sa
demands upon the reS,renenis eaSn neaa0'S
''S Snder these circumstances, it becomes the duty
serve and protect the interests Of the companies;
their bond and stock holders ana credit"rs ana
prevent the disintegraton Of the ralirOah sy.tcni
rary relief required in the present emergency con
| sidering the magnitude OF the railway system IN
volved its earning power and !. sources satlsihC
| tory physical condition and working organizatlon'
ent depressed condition Of financial aialrs geheaM, ~
courts should be invoked and the exeeuye MY benn an
leRaI off
authorized and instructed not TO resist aplcau11n ION
for receivers but make answers setting iorth the
facts and adm1E the situation ana temporary
| The Atchison system as whole including the
| g. Louis and San Francisco Railway ana ali other
auxiliary lines comprising 93i5 miles OF rallfOau)
is amply able even under the present adVefse yi Gon
Charges il relieved from floating debt which is not not
eebenSed financial conditions and lower prices OF
securities owned by the companies ana useu as coi'
| lateral has brought about the situation no" re-
| portcd.
The obligations of the COMPANY ale a. follows;
't'ae due pecelnber 1886 June. 1884. .silcooDo
NSfS Ss ana .on''. 22ooooo
Coupon Interest and other fixed Obligations due 600 600
11 The Western about normal h,c wn m
| provide for November pay rolls ana other current
Wth ordinary financial conditions prevailing in
| America and Europe, the market value Of me sc Sc
lateral is about equal TO the entire amount OF the
above obligations. go , ..o a .,,,,,,,
10 the security holders and creditors of the com
panies for their approval plans for relief from rne
as temporary ,,.oo,o-s
| D' ~ j. W. REINiART. President.
President Reinhart said late last night that
| urtil last Monday the management OF the Atch-
| ,nson was confident OF securing the funds neces-
| err, 70 carry the company over January ]. IL
| was plain that Mr. Ma2oun would not survive
his illness, and it was Inferred that his death
| wouId ne followed be renewed attacks upon the
| company's securities that would lower the price
| of It's pledged collateral and compel the company
| to use "A part Of the money practically prom
| ieed IN urotcct it's loans AS this would mani
| Testify he unfair &c those who had under
taken to help the company over the first
Of the year. since 1t would simply bring them
| into a situation that could not be remedied. II
| was decided to take the course set forth by the
| statement Of the board. Mr. Reinhart declares
that his statement upon his arrival from Europe
that the January interest would be paid was
warranted by the state OF the negotiations at
that time. and that he did not say that the
money for that purpose was "on hand" The
rsuaI courae of the company has been TO have
the interest in hand; that is in bank at the
Fast not earlier than one week before pay
ment is due.