The Portland daily press., 1894-01-05
BANKER NAGOUN'S DEATH.
How 1t Prompted the ReeeiVership
ef the Atchison System.
THE RECEIVERS MAKE REPLY TO
SOME CURRENT REPORTS.

They Say that the Receivership Was Not
Contemplated Last Summer and that
the Road Expected to Begin the New
Year All Right Until Late in January
Then, However, Mr. Magouns Death
and the State of the Market Changed
the Situation.
New York. January 4.-The following
official statement has been issued by the
receivers of the Atchison, Topeka and
Santa Fe railroad: Gable dispatches
published by American newspapers in
dictate that some English newspapers
have given currency recently to certain
inaccurate statements, telegraphed origi-
nally form Chicago and purporting to
have been made by George r. Peck. gen.
eral solicitor of the Atchison system and
Mr.. Wilson, recently appointed receiver of
the property of the company. In these
alleged extracts from interviews, these
gentlemen are represented as saying that
the Atchison system was known to be
insolvent as early as last August, and
that legal papers were then drawn in
anticipation of the receivership. Both
these gentlemen declare that the state
ments attributed to them are false and
without foundation. The financial con-
dition of the Atchison comany, clearly
and accurately given in the statement of
the directors, December 23, showing it's
western accounts to be in normal condi-
tion, was confirmed by the fact that the
pay rolls for Novembe which aggregate
for the entire system about 81, 500, 600,
Were practically not delayed, except
during few days in which the receiver
ship matters were under discussion. The
payment of these is now about COM
pleted. The condition OF the system, in
Guiding the St. Louis and San Francisco,
the Atlantic and Pacific, the Colorado
Midland and all other auxiliary COM
panies, is given in the directors state
ment of December %, which shows the
total demand and time loans and
notes with collateral due from Decem Der,
Is. 8. to June, 1894, to be s6,300,00 and
the total coupon, interest and other fixed
obligations due January 1st inst, to be
So, 500, 600. Since the appointment of
the receivers, the loans have been con-
tinued and the collateral held intact for
the company. This practically leaves the
Atchison company for itself and all its
debt, above stated, owing but SO, 900, 600,
the aggregate amount of the interest due
January /, 1894 There has been no state
ment given to the public of any kind
from official sources suggesting financial
reorganization, SO all reports published
in America and Europe of proposed as
sessment on the stock and the return of
second mortgage bonds to income bonds,
or of the disintegration of the system,
have no official basis. Upon the return
of President Reinhart from Europe, he
was confident of the ability of the COM
pany to pay the interest on January 1,
and gave expression of this belief with
out hesitation The condition of negoti-
ations was such that he saw no reason to
change his views until the afternoon OF
the 18th of December, when iJ became
known to the officers of the company
that Chairman Magoun could not pos
sibly survive more than a few days. This
fact added many complications to the
situation. Upon the same day, from ad-
vices received from abroad, MIR. Reinhart
became satisfied that the company could
not raise the money necessary to pass the
first of January although encouragement
was still held out by those largely in
terested in the company that the sum re-
quired might be provided. The officers
of the company found themselves con-
fronted by this situation
with the uncertainty as to whether
the full amount required to pay the Jan
uary interest could be secured and the
expected death of the chairman of the
board, in the unsettled condition of the
market both here and abroad, it appeared
to he altogether probable that the prices
of the company's securities would fall,
thus depreciating the value of the bonds
held as collateral for the floating debt.
Even if the money required could have
been borrowed by the company and paid
out as interest, the loans might have
been pressed to default, and the integri-
ty of the system and the interests of its
stockholders and all classes of it's credi-
tors, would have been endangered; and
the money thus borrowed, especially or
the payment of interest, could not have
been returned
under the circumstances meeting of
the directors was convened, and it was
deemed to be their duty to take such
steps as might best conserve the interests
of the company, it's stockholders, bond
holders and creditors, and prevent the
disintegration of the system, and not to
oppose the appointment of receivers, if
asked for by those whose interests would
be to preserve and protect the property
as whole. 1t was late on December
18th, when the officers of the company
became satisfied that some action was
necessary 20 prOGocU all luGereStS. OH Uue
afternoon of the following day, counsel
representing the Atchison and st. Louis
and SansFrancisco companies, and counsel
of the trust companies, the trustees OF
the mortgages covering all the properties
of the railroad, began the preparation of
the necessary papers. They were COM
pleted on Decem ber 21st, on which day
the counsel left for the West to submit
the papers to Ju dge Caldwell at Little
Rock, Arkansas. Prior to Tuesday, nc
suggestions were made nor papers drawn
up or steps of any kind taken towards
| the appointment of receivers. Under or
dinary circumstances it would not be
| important to state these facts, but the
Representations cabled abroad,
coupled with the names of the officers OF
the Atchison system, render it desirable
that the exact facts should be. stated and
| known.
| (Signed) "J.W REINHART.
r