The evening herald. [volume] (Shenandoah, Pa.) 1891-1966, 1894-10-16
READINGS NEW PLAN.
Application to Approve the Reor-
ganization Scheme.
BONDHOIDERg COUNSEL OBJECT.

The Matter Referred to ATa,ter crawford
who After a Hearing Take. ,,r Matter
Under Amusement, and VIII FIc "a Re
port in the Circuit Court.
PHILADELPHIA, Oct 16.-Before an array
of legal and financial men of this city and
! New York the Olcott- Earle plan Of reor-
! ganization for the Reading Railroad com
| pany was called to the attention Of Judge
| Dallas, in the United States circuit court
The matter assumed the shape of petition
! filed by the receivers, asking permission to
acquiesce in the provisions of the plan and
to pay out the 2l6 per cent commissions TO
the syndioatcs formed TO put the rehabil-
tation scheme in action.
Samuel Dickson appeared for the receiv-
ers,J John G. johnson and Mayer Sulzberger
for the reorganization committee, John IL.
Dos Passos, of New York, and Charles B.
| McMichael, of this city, for the Fitzgerald
| committee of general bondholders, and
Nathan Blur, Of New York, for Isaac L.
Rice and the Hartshorn committee.
Mr. Dickson opened the proceedings by
explaining the purpose and scope of the
plan, and urging the necessity of early ac-
tion to re-establish the company on sol
vent basis
Mr. Bijur's immediate reply began hos
tilities. He made vigorous onslaught on
the plan and its promoters, urged that the
court had no jurisdiction, and declared
that until the syndicate had provided for
the extinguishment of the companys debt
it could not ask the court to take the road
out of the receivers hands
Before the argument proceeded further
Judge Dallas told counsel that this being
4
trial term the petition would be referred to
George L. Crawford, the special master,
who would be directed to make speedy
report.
A few moments later the hearing was re.
sumed in the masters office, and continued
until late in the afternoon. Here the dis
cussion was taken up by John B. Gleason,
of New York, on behalf of the first income
bondholders Of that city. Mr. Gleason was
anxious TO return to New York, and his
objections to the plan were stated briefly
Francis l. Gowen, following for the lie
high Valley road, said that the company
was not party to the proceedings taken
by the reorganization committee, but that
1t had no wish to interfere with the pray
ers of the petition and was willing to leave
the formulation of the plan wholly to the
committee.
Mr. Blur then resumed his protest
against any action by the court, saying
that the plan would leave the company
insolvent and in the hands of receivers,
with no way of being taken out of their
hands, and the obligations would increase
instead Of diminish.
Lawyer Dos Passos characterized the
plan as extraordinary and extravagant,
and believed there was not a court i'm the
country that would approve it. The pur-
pose of the application, he continued, is to
get the courts seal of approval upon it
and then use it as q bludgeon with which
to beat non nassenting bondholders into
submission. Without bond in its pos
session this committee comes into court
and asks to have this gigantic scheme of
speculation approved, so as to force it
down the throats Of the minority bond
holders. He believed that if the 100000
worth Of bonds were advertised for sale
they would be taken up at par, and in
stead of 915& per cent. as proposed by the
committee, there would be a saving to the
holders Of Reading bonds of about S25OOOO.
Mr. Dickson defended the action Of the
receivers and detailed the advantages to be
gained by the approval Of the plan. Never
in the history of the company, he said had
there been an opportunity to borrow
money so advantagaously. In answer to
the opponents of the scheme he said that
If any one would show "a legitimate busi-
ness transaction whereby the Reading
could be benefited the receivers would
gladly listen to the proposition
After Mr.. Dickson had finished Mr.. Dos
| Passos and Receiver j. Lowber Welsh had
a little tilt Mr.. Dos Passos thought that
the receivers should take no part in the re-
| organization, and said to Mr.. Welsh: "You
have been in two Reading reorganization
schemes. The first failed the second failed
and the third will fail" Mr.. Welsh said
he did not approve Of sticking the knife
| into me-" but that when his adversary was
ready to stick it he would be ready to re-
ceive it,
Mr.. DiCkson's argument closed the case
| for the present Master Crawford was un-
| able to say when his report win be filed.
Judge Dallas stated that while the re
port will be filed in the circuit court, it
| viii be considered ont of court.