New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1894-03-03
THE ERIE OPPOSITION.
REASONS WHY THE REORGANIZATION
PLAN is OPPOSED.
REPLY OF THE ORIGINAL COMMITTEE OF
DIRECTING BONDHOLDERS TO A LETTER
pIRE("TORS

DETECTING BONDHOLDERS TO LEI len
FROM THE DIRECTORS
The Tribune printed Thursday report OF ire
opposition Of the bondhoders Of the New forN' Lame
Erie and Western Railroad Company to the plans
for reorganization as put forth by the directors
committee In that report It erroneousiy Sta'eu
that f. H. Hartman was Of the firm OF hartman
e. Co. and the name OF August Belmont Z" ~ "dS
accidentally omitted from the committee origlha"S
ting the opposition. This committee was
COMPOSED OF Vermilye x Co, Kuhn. LoeD q 'o'
August Belmont & Co. John \. Stewart HaliSar'eh
& CO.. j. d. Probst 4 Co. Sidney Webster r. H.
Hartman John J. Emery and Charles A PeaDo'S'
tr The members Of the committee believing theH
duty to have been accomplished with the suo'hiS-
sion OF their suggestions for a MODIFICATION OF '"e
plan of reorganization. Informed the directors con"
mlttee that they would leave the responsibility 10
them Of trying to do what In their opinion was most
dangerous The bondho.ders requested the original
committee 10 form a protective committee. and h.
H. Hartman Henry Bulge John j. Emery anu
Sidney Webster consented to act as such'
TN. principal reasons for the opposition which
the bJndholIers have to the reorganization SS"e'"o
Of the directors a. follows
First-That hy the enlargement OF the issue mn,
which the bonds to be exchanged for ours are "
be taken. 1t reduces our security by more TIA" o'e
Second-That no proper Equivalent Is offered TOT
the reduction Of interest on our pohu H,rchas new
honds At more than their value (being in effect an
assessment on the hondh0lner ~ a" %eb"r upon a
Fourth That il an assessment may be forcioly
demanded and collected by a debtor Of secured
creditor for the preservation or tne xTp'o it",
nor 20 FAR enough The contribution denronded -
not sufficient 10 put the company vi ' ~
TfIS r. calls for no effort sacrifice on The
part OF the debtor COMPANY to preserve i'S P''p''
Sixtb Tn. scheme If successful would tend 20
establish n dangerous preceIeni wn,cm vioiating
Il dscrrdIt to American railroad nhahcT;; sec1ritv
the plain obligations 81 the con'ract Oh a
and tend - increase d.struSt IN al american 'N
road securities. . 49,.
In arswer N the letter sent 10y thu directors 10 the
original committee refusing to consider The susgeS
tions for a modification OF the reorganization pan
n letter was sent by the original committee "'''
was In part as follows: - 49,
Ra1ylng further to your letter Of the 1tn lns, "a
ha~ to siV that we regret that you cannot see sum
Gent merit In of our suggesti9ns 20 s ", a,'IJ
10 modify your plan OF reorganization 30 a. an
the conflict which appears now to bt itnhent, an
which best must delay me maj Tr,a Va bnned
ynur companv's finances and standing We nopt'
;hat q ulan more conservative than the on Iu p"
pose would BE- acceptable 50 mat ne rxfu c e,i' a
T., be assumed I'm the futur" would d" rr"ucii, 20
e,,r. whereby the credit II the company would nor
hi w rhancsd but is finances be put on such .
trf, ia, ,nother default in the future would
H.. muronahle thus protecting tue Don'. ti -
49, ,rbn,der from beng shut cut by foreclosure
~ The mortgage which You uruposr 10 lssut ms. ~
vas thought would b" all me more M - yo,r
hrc,s. 81 thu experience YOU hayr hSG uu v YIN an
,uonop.m-nt Of the property since ~ ~, va.
"i,i re,.rfs show that YOU have had IN addluOh 10
49,. amount necessary 70 pay nNed charRFS uIWdiu
- ,o; r0 n,D TO protect and improve me ProP'Iy -
II mon REORGANIZATION In 1851 a pan nau , pc'n
oirted 70 ,lace the company upon n hlRher pass
- rr.Iit and which believ" could now De noilr
fbe,. securities could have been Issued az ratt
smurw hat approaching that OF the otntr ruIIn
iir.s or ~ about 4 per cent. We sincerely trErFt
~, having had this past experience YOU iTclIllr
-, rom thereby ami refuse 10 do no" whst srtHls
,,ii..sarv Ia pacp the finances or the company III
such a uos,ion that the property NAV De man 4 !.
taired improved and operated on basis equa' 10
that OF rs competitors 49,. .-..,,.ot -aoues.s
from holders and representatives. or holrrs OF d
49,. amount OF the Second tonsohlatru bonus
s.ino that a protective committee he formed 10
80. s,Ire qters 10 make effective heir opposltlon
80 ,our t,lau Some OF the signers or the Co'tIhui
| ,s,,ons snuf Won on January =. lNl ana feprual:
q iSai believing their duty TO have been accom-
,r,sheJ with the submission OF the state"eta.tks
,h.ro,n Contained feel that they must leave W.
ru the responsibility ~ trying TO 40 Whst III ~
Ioi,tnn "a most dangerous. Messrs. r. IL nfsaIn-
man John j. Emory. Henry Bnige anu o'.ri ~
Wahstcr have however consented 10 coHlpN VIII VII
H. r.o,iest TO form a protective committee anu
will act such. ..i,,,a1 ~ take
an, firfher action which they may deem III w
i1..ras, ~ those whom they represent we ie"''''''
yours truly.