The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1894-08-25
TO OBSERVATION-DISCLOSURES
Stockholders of the Santa Fe Are
Moving.
4 SECRET CIRCULAR IS ISSUED.
They Propose to Inaugurate a New
Policy on the Great Railroad

The reorganization committee of the
( Santa Fe has issued a circular, which
has been sent az far as possible to every
stakeholder of the road. IN which the
Reinhart management is handled with
extreme candor. The circular invites all
the stockholders to join the protective
! reorganization committee aud asks them
to deposit their holdings in their care, in
return for which they will get negotiable
certificates of deposit in return. The
circular states plainly that its aim Is to
prevent the foreclosure on the santa Fe
property, and to @inaugurate a new and
clean administration, thoroughly repre-
sentative in character and is nowise
/ identified with its present unfortunate
en- barrassment" The circular states
forcibly that the individual holders Of
stock are helpless, and these results can
be accomplished only by a cooperation
of all of them.
The circular has been kept as much a
secret as was possible with its distribu-
ton over so large an area A Topeka
EtockhOlder furnished the STATE jour
NAL with copy of the circular, which IS
as follows:
To the stockholders of the Atchison, Topeka s.
santa fe railroad company:
DEAR SIRs:-At y meeting of the
AtchisOn, Topeka & Santa Fe railroad
company in New York on July 81, 1894,
the undersigned were elected as THE
AtchisOn Protective Reorganization COM
mlttee," with directions to take apprO-
pirate steps on behalf Of the stockhold-
ers to avert the hostile foreclosure with
which they are threatened, and to devise
suitable measures of relief in the way of
reorganization.
The committee has therefore entered
upon the discharge of its duties, has al
ready taken steps to ascertain the exact
financial condition of the com pany and
to obtain the best estimates possible of
the net earning power of the system IN
der the present and varying conditions.
and IS now preparing a plan for reOrgan-
ization which will be based on such in
formation and provide for the
needs of the company; place il on a sure
financial footing; leave its management
and control directly with the stockhold-
erss preserve the existing status of the
mortgage securities, and at the same
time call for the least possible sacrifice
on the part Of the shareholders and 9TH
ers Interested
In view of the recent published dis
closures as to irregularities practiced in
the keeping of the Atchison books, as
shown by the examination of an expert
accountant, the committee has not seen
fit to accept az reliable any data as a
basis for its calculations and estimates
without first being able to verify their
correctness by an inspection Of the COM
pany's records.
ascertained they will definitely submit
their plan of reorganization. which we
are sure will receive the hearty support
and cooperation of the stock holders.
But it is not necessary to wait for the
detailed report of the expert accountant
to place in condemnation the manage
ment Of this corporation since 1879. Dur
ing this interval the directory, the gen.
eral management, has remained virtually
unchanged After the reorganization of
1889 the treasury assets of the company
consisted of $4,000 900 in cash and So
600, 900 in bonds. The managers have
also used the proceeds of $5,OOO,OOO new
"B" bonds which have been issued. We
now find them asking for $4,000, 900
more. This makes a vast total of more
than $50, 100000, besides earnings) to be
accounted fOr-certainly an amazing ex-
penditure for a newly reorganized com
pany during period of less than five
years.
The committee has prepared a Trust
Agreement under which the stockholders
are requested to deposit their shares
with the Trust companies named
below. for which negotiable receipts will
be issued, and by the terms of which the
stockholders are permitted to withdraw
their stock if they SO desire.
Applications will be made in due time
to have the negotiable certificates of de-
posit listed on the New York, Boston and
London stock exchanges.
The committee can only assume to act
for those who have made an actual de-
posit of their holdings, In order to ena-
bic it to properly carry out the objects for
which it is constituted, it ought to COM
mand the approval and support of the
stockholders; hence, it is all-important
to the success of the undertaking that
holders should promptly make their de-
posts with some one of the Trust com
panies.
There will be no defence to the bill of
foreclosure now pending IN the court
The company has defaulted on its utter
est obligations and acknowledges its in
ability to meet its fixed charges Under
these conditions, unless there is uni
fOrmity of action on the part of the
stock holders, a decree OF foreclosure Is
sure to follow at an early date, and to
wait until that takes place is virtually to
suffer the forfeiture of our interests.
To escape such a result immediate and
concentrated action is imperative.
The individual holders Of stock are
absolutely pOwerless. In a combination |
of stockholders lies the only guaranty of |
protection
To delay cooperation is to imperiI, if |
not defeat, the ends sought to be accom- /
plished by the committee.
viii the stockholders prove so obIiv-
iOus to their interests as to stand idly I
and silently by and allow this vast and /
valua bic property, with all its promising /
and their investments. representing a /
face value of upwards OF one hundred /
million dollars, to be entirely wiped out |
of existence? And yet this is the issue
which now confronts them.
The committee will be under the nee
essity Of engaging eminent legal counsel
to appear for the stockholders and arrest