New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1893-05-29
READING READJUSTMENT PLAN
EXPLANATION OF THE SCHEME ADOPTED ~
TIE MANAGERs on SATURDAY.

EXPLANATION OF THE SCHEME ADOPTED ~
THE MANAGERS on SATURDAY.
Philadelphia, May pa plan for the readiust,
ment OF the affairs OF the Philadelphia and Reading
Railroad Company ard the Philadelphia and Read.
ing Coal and Iron Company and the finding Of the
| floating and other Indebtedness In default was
adopted by the Board OF Managers here late last
night, and II. with an explanatory statement, was
issued yesterday by President Harris. The plan pro-
pose, TO issue OF 3Oyear collateral trust
q per cent gold bonds, free OF taxes, 10 the amount
! OF $1,000 ZOO, to DO securci by the mortgage or
pledge to the provident Life and Trust Company OF
Philaie pha. The collateral trast bonds will be
dccmabI, az any time before maturity at 10 per
OF their par value, and tho mortgage viii
authorize the trustee h. arpy the surplus income
the proceeds OF the sales realization OF any
Of the securities pledged until 1o06. and thereafter
; much may DO determined from time to time
Ly the railroad company, 10 the purchase OF said
bond, at the best prices oblainablc.
The company Is now 70 issue Pr 100000 OF bonds
at % per cent and TO i.sue 81 10000 in each Of
the years 1898: 1e01, 1880 and 1895 for the
e the company q, working capital and for add
tlonal real personal property. The floating in
dcbtcdnpss be liquitated out Of the proceeds Of
the f2!,0o0.0-0 Issue amounts 10 $1,000 $40 a6,
exclusive Of the claims arising out Of transactions
In shares Of the Boston and Maine and the New
York and New England railroads. Before the plan
can De- compiled with II Is necessary that the stock
holders ard holders Of the general mortgage bonds
and the bonds Of the affiliated companies named Ia
the plan should give their 10 the plan OF re-
adjustment; and become parte, TO the several agree
ments in which they are respectively interested on
or before June II, 1903, and unless, in the iuds-
meut Of the boarl the assent OF the requisite NUM-
her of creditor, and stockholders shall have been
received by that day the syndicate Subscriptions
viii be released and the plan abandoned. In case
the requisite number should give their assent and
the plan he declared operative. call will then DO
issued for the presentation Of tho bonds 10 be stamped
in accordance with the several agreements, ana for
the transfer OF the shares to be exchanged for
proper certificates o interest. President Harris in
hi, explanatory statement says
1T IS obvious that the large floating indebtedness
Of the company must be funded in some permanent
form before the rcceivershp can be terminated.
AZ the present time and In the present condition OF
the company. this can only De done BY an issue OF
bonds bearing per cent interest At discount; but
the interest upon the new bonds will be much less
than the previous OF carrying the floating debt
The average charges paid during the year 1892 upon
the floating debt, including commissions on renewal
amounted to over o per cent per annun; the in.
terest upon equipment notes amounted TO about IL
rer cent per annum and the principal loan upon tho
) per cent twenty-year collateral trust bonds OF
lao. was obtained under a contract which gave the
lender OPTION take them AT - IL per cent OF
their par value. 4 large saving in the annual
charges OF the company WILL therefore. be- effected
If this Indebtedness be refunded proposed, and
large amounts OF third preference bonds and other
securities now pledged and liable 10 sale. will be
redeemed and returned to the treasury OF the com.
pany
II these terms accepted by the creditors and
stockholders the personal property of the company
will be saved from sacrifice: the integrity OF the
system preserved the creditors will get all that
the property cirns and the company will have
substantial relief during i've years for the develop
ment Of its business II they are refused, issue
OF receivers certificates must be made. default
occur in interest the prior mortgages; the control
Of the lines acquired subsequently to the reorganiza
ton may be the securities and personal property
sacrificed and the task Of reorganization be under.
taken under the pressure OF impending or after
actual foreclosure and in either event the money, or
the larger part Of it. rendered must sun be
raised by the creditors and shareholders, or the earn
ine power OF the property be permanently and seri.
ousy crippled. In OF the present condition OF
business and Of the necessities OF the company. II
is essential that II should be- known at the earliest
day possible whether the plan can be carried into
Effect and June 81 has been nAed therefore, as tho
limit within which tho creditors and stocknoaers
must become parties 10 the agreements In which they
respectively Interested