New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-09-16
READING REORGANIZATION.
PLAN OF THE OLCOTT-EARLE CON-
MITTEE ADOPTED.
1T PROVIDES FOR A COMPULSORY ASSESSMENT
UPoN THE STOCK AND SOME OF THE

1T PROVIDES FOX A COMfllScf1 ASSESS'iE'NA
uroN THE STOCK AND SOME OF THE
INCOME BONDS.
Philadelphia, Sept l5.-Af;er a conference lasting
an hour and a half the receivers Of the Reading
Railroad Company to-day approved the reorganza-
ton plan conceived by George H. Earle, jr.. pres-
dent Of the Finance Company of Pennsylvania. and
perfected by the Olcott-Earle Reorganization Com
1nittee There were present a, the conference Sam
uel Dickson counsel for the receivers; F. W. Whit
ridge of NewYork. and Mayor Sulzberger, OF coun-
sci for the committee. the local members OF the
committee and the three receivers.
The plan Is already in type. and will be officially
made public next week Many of Its provisions have
already been published. but that feature which Is
of the most vital interest to the security-holders
leaked to-day.
This is no less than a provision for compulsory
assessment upon the stock and the three series OF
preference income bonds. accompanied by threat
that If the holders of these securities do not pay the
assessment the Reading property will be sold under
foreclosure OF the general mortgage This alternative
will, stated. be brought forward in all serious
ness.
The stockholders and junior bondholders are TO
be asked subscribe at par for collateral trust
bonds to the amount of s10Oo0,000 There are out
standing. in round numbers sGo.ooo0oO of preference
Income bonds and 100000 of stock Each holder OF
these securities therefore will be asked TO subscribe
dor collateral trust bonds TO the amount Of 10 per
sire to subscribe for their share OF the bonds will
De asked pay per cent of the par value of their
holdings syndicate. which will then relieve
them of the obligation 10 subscribe the collateral
trust bonds.
But as no assessment upon the shares bonds of
the Reading Company can be made obligatory. 1t
vas necessary to find some means of compelling the
security holders TO pay the assessment of per cent
20 the syndicate. II they do not desire to take the
collateral trust bonds themselves 1t Is for this pur-
ose that the threat of foreclosure is TO be used and
that the Reorganization Committee intend 10 impress
ahe securityhoders with the belief that the danger
of foreclosure real apparent from the fact that
old charter. said be fully liberal in its pro-
visions as that under which the Reading is now
operated, has been secured.
In the past the chief obstacle In the of fore
closure has ALWAYS been the apparent impossbility
Reading Company to continue mining and selling
the coal which it transports End which would be as
liberal In other respects is the present one
The syndicate to underwrite the issue OF collateral
10 be the 3 per assessment paid by those Sc
curiy- holders who do not wish TO subscribe them
stood that already 50 900 has been subscribed
for this purpose by various financial institutions
The knowledge that an assessment would be levied
under pain of foreclosure responsible for very
heavy sales of Reading stock at the philadelphia
sold in the space of two hours, and the price
declined from lO& TO ol-l6. with los bid at the
close.
Another factor of Importance in connection with
I wh ia be ACCORDED the
bondholders Of the Philadelphia Reading and New
pss b better eanS ne h s
antor of the principal and interest on these bonds
but since the receivers have been In control no in
terest has been paid
1t was learned today that. while no mention Of
holders have received assurances that their rights
compshed or in other words that the Reading |
will then resume the fulflment of its guarantee.