The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-02-23
A NEW PLAN NOW IN ORDER.
THE THOMAS AND RYAN REORGAN-
IZATION SCHEME A FAILURE.

j. II. Morgan * Co. Think the Pro-
posed bonded Indebtedness Was
Too Heavy-Thc Firm VIII IN
doubleday Dictate the Terms of the
Reorganization, and Is Now ut
Work ON a New Scheme IL Is said
Underlying BOndhoIders Are Al
ready kicking and Are Threaten
ing TO Withdraw From the system.
Receiver Conner Now in New York.
There seems to be no doubt about the
fact that the Thomas and Ryan plan of
reorganization Of the Central railroad has
fallen through. This has been the talk
for sometime, and several announcements
or rumors to that effect have already been
published.
The trouble seems to have been a too
heavy bonded Indebtedness as proposed
under the plan, especially on the Savan-
nah and Western, which includes the
Chattanooga, Rome and Columbus rail-
road. a line that has never been paying
institution. The objections TO the pro-
posed bonded indebtedness on the Savan-
nah and Western were made by J. P.
Morgan & Co. who. as is Well known, are
back Of the reorganization movement, and
they refuse, it is said, to go into any
plan in which there is not an almost alb
solute certainty that the interest on the
bonds issued will be paid.
Receiver II. NJ. Conner and Mr. A. R.
Lawton, Jr., attorney for the receivers,
are now in New York looking into the
situation. 1t is believed a new plan is on
foot, back of which will be the firm OF
j. p. Morgan & Co., and that the Thomas
and Ryan interests will be eliminated in
50 far as 1t is possible to do so.
The New York Herald Of Feb. p has
| the following:
/ The Georgia Central plan of reorganiza-
ton, which was prepared by AIessrs. Sam
uel Thomas and Thomas F. Ryan, is dead.
This was admitted by member of the
underwriting syndicate that expected 10
/ guarantee the proposed issue Of bonds
which was to take up the floating debt.
Various causes have been assigned for
the delay in putting the plan into opera
| ton. The scheme had been perfected, and
I Gen. Thomas had secured the signatures
of a majority of the syndicate, with the
/ promises of the remainder of them, when,
/ for some mys terious reason, there was a
/ halt, and things came TO a standstil.
/ There was talk of the big suit being re-
/ vived against the participants in the
+ Georgia company deal. This is said to
have induced certain holders of the float
/ ing debt who had participated in that
/ famous deal to drop the reorganization
until the pending suit was actually with
drawn.
other reasons were also assigned for
1 the delay, but the indefinite reports that
4 certain classes of bondholders were dis
satisfied could not be traced to any one
of the underlying companies which had
been called upon to make the heaviest sac
rihces. In fact it was definitely stated
by the Herald on Nov. I last, that all Of
the bondholders' committees had given
their consent to the plan. Hence, the
cause of the failure was something differ
ent from any of the reasons assigned.
one of the gentlemen interested in the
rehabilitation OF the property said yester-
day that the real cause of the failure was
that the Southern Railway Company
which owns a controlling interest in the
stock of the Georgia Central railroad, and
which was supposed to have assented to
| the plan drawn up by Messrs. Thomas and
Ryan, had changed its corporated mind.
I Mr.. j. Pierpont Morgan. it is unders TODD.
/ thinks that the fixed charges Of the GeOr-
/ gia Central under the plan prepared by
! Messrs. Thomas and Ryan, will be too
Z heavy. and that they should still be fur
Their reduced.
Messrs. Thomas. Ryan and other gentle>
men have been at work for several days
drawing up an entirely new scheme, on
the basis suggested by the Southern rail-
/ way. which it is expected Will assume
/ control of it after it is placed on its
feet again.
The moment this fact became known
/ yesterday there was vigorous protest
from number of bondholders of under
I lying companies, who declare that they
would make no further concessions W hat
ever. and. If necessary, they would take
back their properties and operate them
independently. as they did before the
Georgia Central Acquired them.
/ 1t is understood that the proposed re-
duction viii be scattered pretty freely over
/ the entire bonded Indebtedness. and will
have due reference to The earning caoac-
ity of each line and it's showing since the
old plan was drawn up. Messrs Thomas
and Ryan will consult frequently with
Z one of the firm of ]. p. Morgan & CO. in
making the proposed changes.