The morning news. [volume] (Savannah, Ga.) 1887-1900, 1894-07-05
THE JUNIOR SECURITIES.
The Central TO Be ReOrganized With
a View to Protecting Them.

The AZ, 900 Shares Is an Investment
of the Southern Railway Company,
Which Must Be Taken Good Care OF.
Talk About the Southwestern
Debt Being Put on the Central-The
Augusta and Savannah's Com
parative Earning Power Less Than
That of the Southwestern.
The new reorganization plan Of the
Central railroad, 50 far as it has been an
nounced, is still the subject of discussion
among all those interested in the roads
securities or the future of the property.
Every now and then some new feature
of it is brought out and discussed pro and
con- There is no doubt in the minds of
any one now that one of the main objects
of the plan was to do all that could be
done for the junior securities. Under the
circumstances this was one of the neces-
stiles, especially so far as the
stock is concerned, as the majority
stock is in the hands of those
who will be chiefly instrumental in re-
organizing the property. DreXel, Morgan
& Co., whose interest in the Southern
Railway Company is so large, are not
going to allow that stock to suffer beyond
what it is compelled.
MARKED UPWARD TENDENCY.
The debentures were of more import
ance to people in this section than to
those in New York, but Receiver Conner
was on hand to look after the interests
of southern security holders who had suf-
fered most in the roads failure, and the
del in
scale as possible next 10 the mortgage
indebtedness.
Since the plan has been looked on in
this light, the road s securities have had
q decided upward tendency. The market
in all classes of the junior securities has
been on the upward move, and it is be
lieved as the plan develops, the upward
tendency will be still more marked.
There has been some talk about it being
unjust to the stockholders of the Cen
trail railroad to make that road assume
a 81 600, 600 Indebtedness which belongs to
the Southwestern railroad under the judg-
ment Of the court. Just why this was
done has not yet been made fully clear,
but it is believed that those who had the
matter in charge took every detail into
consideration, and did not act unad visedly
in any instance.
WILL GET MORE THAN THEY HOPED.
The stockholders at all events, it seems,
will get more than they had hoped The
Southwestern will undoubtedly earn
something more than its rental charges
are to be under the plan. These charges
will be $3.50 900, while under the present
lease they are $3.50, 900. The Southwestern
road has earned up to April of this year,
in just nine months, 1886, 900, which is more
than its present rental for the entire
year. If the surplus earnings above the
amount required to pay the rental under
| the new plan are turned into the general
earnings OF the Central every year, they
will likely go long way toward paying
interest on other securities, and in this
way the stockholders will no doubt be as
much or more benefited than If some
other arrangement had been made.
THE PER CENT. GUARANTEES.
! There has been some talk as to why
| the Augusta and Savannah railroad,
! which does not owe dollar, was given
| only 5 per cent. on its stock, while the
| Southwestern, which had large debt on
| hand, was relieved of that debt and given
. per cent as we'll Some who
! do not understand the situation
/ look upon this as slightly unjust
/ to the Augusta and Savannah railroad
| The difference, however, lies in the earn
| ing power of the two properties The re
| organization plan had to be based on the
earning power of the properties CON
| cerned. The Southwestern is capitalized
at about $4,000 per mile, while the Au-
| gusta and Savannah is capitalized at
about $40, 900. Not only this, but the build
! ing of the South Bound railroad, which
! is operated in connection with the
! Port Royal and Augusta, between Savan-
nah and Augusta, has diverted much of
! the business which formerly went by the
| Augusta and Savannah. In these and
other ways the earning power Of the prop
erty, comparatively speaking, has been
! decreased and is less than that of the
! Southwestern.