New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-01-27
WANT ERIE'S PLAN CHANGED.
PROPOSITIONS FOR A NEW BASIS OF
REORGANIZATION.
IMPORTANT BANKING INTERESTS ASK FOR A
NEW PER CENT. BoND-DEBENTUREs
FOR THE REDUCTION IN INTER
EsT-oBJEcTIoNs MADE TO

EsT-oBJECTIoNs MADE TO
THE PRESENT PLAN.
The letter sent to the directors OF the New-York
Lake Erie and Western Railroad has revived In
terest in the reorganization plan OF the company
and may lead to notifications by the Rcorsahiza-
tjon Committee. When the plan was first pup
lshed a general approval of its terms was reported
from Europe but it is understood that some I'M
portant interests have changed their attitude. The
houses representing the opposition embodied by the
letter include Kuhn. Loeb & Co.. August Belmont
+ Co. Uallgarten & Co.. Vermiye & Co. and Har-
rirnan & Co.. and c. j. Peabody, agent lOr 'he
Astor estate is also among the signers
The letter which requests modification or the
reorganization plan, is couched In friendly terms
and In nowse suggests factous opposition but 1t
is clearly stated that, after careful consultation
among holders Of Erie second consolidated mort
gage bonds both here and abroad. the bankers
Initiating this movement of the opinion that the
plan will not be accepted by the bondholderS win
sufficient unanimty 10 make the proposeu ieoi-
ganization a success. From desire 10 aVoiu eoi-
fict and delay in the rehabilitation or the Eiles
finances as well as TO hasten the re-estabishment
of confidence at home and in Europe by prompt
and equitable settlement Of the financial difcuites
in which so many American railways ma 'hein-
selves the letter asks for certain changes IN 'he
Erie plan. The plan as now PROPOSE Is srnaneni
reduction OF interest the bonded debt LOT WhlSi
no nos ta the evyng OF forced contribution
Sondholders through a subscription 70 the new
bonds at a price considerably over ana above the
market value these new bonds are IlNeiy " co'i-
IL is further objected that the fixed charges under
the plan appear considerably larger IMAM r,le
R nss cSn en- car rye Wi WIZ safety ,ono
The committee representing the oboecung Donu-
holders propose that in place OF per cen. poi'un,
as contemplated by the company pan, 'i 'S. Nv
bonds shall bear per cent interest T9s 'he
asked that they be given an equValeh' an h ,
minab,e non-cumulative, per cen, G M nni,
bonds interest TO be paid only II earned me hou-
ers of the debentures. 1t ~ urged siouiI 800 ~
directors to guard their interests II IS sugsssteu
that the present floating debt be nquiuatea irol
an adeouate amount of the proposed new Per
cent bonds land debenture bonds II ueeii h w ha
cffered for subscription by bond and STOCK houels
at a price rather below than above the propaDoIe
market value. The committee declares liat al AZ
demnity syndicate should be proViueo Ioi; as -
33,rred that provision should be made Tor the con-
version on fair terms Of the reorganiZatio p'io
lien bonds into the per cent bonds SO as
TO secure the new per cents Ien seto IND
,rhe new per cents. It Is said, should De assue
under a general mortgage to an amount suinoisn'
70 provide for future additions and
and with adequate provision lor tah''o Up VIZ
underlvinc bonds with the per cents ,.,,,
The letter asserts that scheme OF, Teau!uo.
rnent based these general lines Wouiu "a ,,.n0,d
i,,st and EQUITABLE than the present PLAN ana wouu
better protect the stockholders by removing re re
ssslIe of per cent bonds might make q, -
in the not distant future. Any pan n v,Ithin
,,rged should reduce permanent charges wen .h,-s
the earning capacity of the property anu h e3
only can the credit Of the company be es,apsne oS
on a higher plane and conduce to the auNd"'aee ~
American railway credit in general.