The sun. [volume] (New York [N.Y.]) 1833-1916, 1894-05-03
THE READING SITUATION.
RECETTERs or THE RAILROAD IBlN-
DON THE REORGINIzA IRON PLAN.

DOW THE REORShNIzA IRON PLAN
A. Apps.i e. ~. New York a.u.r.i Mort
ssse Hardheieerp Not 10 Foreeior,-Tvs
CO-uittss- fro- THIS city Ask ror Ne
pos,ts end say Th,y VIII Forseios.
PHILADELPHIA. May at was offlcially AM
nounced to-day at the ofnce OF the Philadelphia
and Reading Railroad Company that the re-
ceivsrs had abandoned the plan OF reorgani-
cation proposed By then and that any other
plan Of reorganization would have to be
undertaken by the bondholdera The re-
ceivers refused to talk about the threatened
foreclosure proceedings Of the New York COM
mittees
The Reading receivers and their counsel
have recently held numerous interviews In
New York with the representatives OF the
banking houses that issued the general mort
gage bonds, and also with representatives OF
the bondholders. After their last Interview on
Monday with some Of the members OF Mr. f.
p Olcotts committee and their counsel. the
following letter was addressed to the counsel
by the counsel Of the receivers. which givesthe
arguments presented against the Institution
Of foreclosure proceedings:
AS cur interview was somewhat prol onRed
yesterday. It may be desirable to state sue
cinctly the points to be considered BY the gen
eral mortgage bondholders before determine
ing upon foreclosure proceedings. II may DO
assumed that II the general mortgage bond
holders are prepared. on their part. to deal
with the questions Of the floating debt. recelv-
srs' certificates. equipment notes. and sinking
fund on the divisional coal land mortgages.
&C.. as they come up. and are willing to take
whatever trouble may arise through fore
closure. they have II In their power to enforce
their contract and bring the property to SALE
1t may also be ssumed that the holders OF the
junior securities and shares ought to provide
the money to relieve the company from It's
difficulties. But while many OF them would
gladly do so. and contribute their money as q
mere gift It is obvious that all would not pay
up unless convinced that foreclosure was
otherwise Inevitable.
I'm this case 1t 10 the more dlf1cult to make
men believe this. because the objections to
foreclosures were so fully explained and dis
GUESSED under the receIvership Of 1850 and that
Il, 1854 Il vas in 1ssH ,r that mr., Mr., Bpl.
risk o.. foreclosure should be avoided II
reasonably possible to DO so; Hnder the ,I re-
he creditors and stocEholdefs that there was
| danger until a decree had been entered and
Mt Gowsn nt1s IN the VA, ystn Ing
could not hold the shares OF the coal company.
sanized. could hold more than 1900 acres OF
land. 1t would be extremely difficult. there;
after a final decree. and possibly after actual
TO tho entry, OF a final decree. however. IL
| is quite possible that successful resistance
could be made. II is. Of course. the duty OF tho
suit Of an ' income bondhoid.r. to keep D
down the interest on priore encumhrances
DO TO hsy h "Gs eom
pany would probably suiiIce &c. pay the gem
sTa mortgage More than this cod
srss, s6cs might sscraeeG and md part Sfs or
- D ataaI tn MT
the n making Of = decree. The real obicction,
therefore, to making the experiment. r. that it
"On the other hand. the injury to the com
pany by the saerifce Of It's assets would pc
called and the .coiiaterals endangered; the d.
! visional coal land MORTGAGES might be fore
msss be- os and the Earning Of tSs
| company correspondlnCly and permanently
impaired while .h ths somrsny would be Pc
provide for the floating debt and receivers
seEtincates; and the control Of some OF tho
=" Ii was very properly said yesterday. also.
bondholisfs consists in the fact that the shares
are Of too little value to be purchased and
TN view q these conslderations. /. has
so%cfs a are Is more likely to get ths inisrest
without loss. and with reasonable certainty
, yos sssass @ 'HH' they to
resort TO proceeding. for foreclosure.
E TS' 's S s' s.fs n''TS'' es
harm onious action, tending to refstabllsh It's
Hnd the saesy 81 s {, s
lie made substantially upon, the terms o. the
plan OF last May. and will provide that tho
| coupon notes should be retired out OF the net
earnings. i'm m edintely after the payment OF
| the current coupons for the year. and before
the payment OF dollar OF interest upon the
while have written this in my own name.
RECEIVERS. and 10 ease the general mortgage
| bondholders should conclude to take action 1t
independently. under their own plan. and as.
| sumo the responsibility OF protecting the
tssn sd Ssf ability sH s csTs
| for Tho mere announcement OF the proposed
foreclosure may lead 70 an immediate demand
| tuts proc eedinRs without having first provided
the funds necessary to save the equipment and
There was much discussion. of the fore
| closure probabilities here to-day. with the
| be carried out the New York movements being
| regarded more as mann'uyre for position on
! tenton TO foreclose. which is thought not prsc-
| tically feasible. as 1t would disinteRrate the
| Reading properties.
| Yesterdays devslopmen Its here In the Reading
| situation gave promise OF an interesting con-
test between rival committees representing
| the general mortgage bondhoders. Both COM
| mittees as Tor deposits OF bonds anu both an
nounce that they would require the trustee Of
| the mortgage to foreclose on the property II
| default in Interest il continued provided they
obtain the support OF the necessary amount Of
| bonds which. under the terms OF the mort
gage, Is 10 Der cent. OF the issue.
| The committee which was formed soon after
| tho receivers were appointed. and OF which
| Gen. Fitzgerald President OF the Mercantile
| Trust Company. L. Chairman, decided some
! time ago to take this stsp. but deferred action
| In order to give Mr.. J. Pierpont Morgan an on
portunity for conference with tho foreign
| nondholdeTa These bondholders have not
! YET agreed upon their coupons under the
| have occurred which. In the opinion
| OF the committee. lmakr IL important
that they should at once define their position.
| Ii was intended that member Of the Arm OF
| Drsxel Morgan x 20. should become q mem
her OF tho ommittse, hut. owing to the failure
| thus far OF negotiations with the foreign bond
| holders. the eontemp plated addition 10 Its num-