The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1895-05-23
C. S. GLEED EXPLAINS.
Some thing Clear on the Santa Fe
Reorganization.
WHY THE SANTA FE COLLAPSED.


The Best Way Out Of the Trouble
Railroad News OF miscellaneous
Character.
The Bond Record for May contains
strong defense of the plan of reorgan-
izing the financial system of the Atchi-
son, Topeka s. Santa Fe Railway com
pany reported by the joint executive re-
organization committee. 1t is contribu-
ton from Charles S. Gleed, one of the
directors of the company, and was writ
ten at the request of the proprietors OF
the journal
Mr.. Gleed attributes the collapse of
the company in 1898 prim 4rily to un-
reasonable competition, the financial de-
preston and It's direct effect on traffic
contributing in a secondary way. The
railway mileage of the portion of the
country through which the company's
competing lines run has grown, he says,
in less than quarter of a century from
1000 to nearly g ,0U0 miles. In 1882
the company had hut one com petitOr for
the Pacific coast business, while now it
| has four Instead of increasing as
would ordinarily be expected in coun-
try being rapidly developed, the
company's traffic Tell off, and receipts
were reduced still more by rate cut
ting. No management in the world,
he thinks, could have saved the com
pany under the circumstances. In the
hands of a receiver, it would have been
managed even more disastrousIy for the
stockholders
The position of the stockholders is GER
tainly not an enviable one at present.;
and Mr. Gleed wisely refrains from hold
ing out more than a hope for him in the
event the company is reorganzed under
the proposed plan The unfortunate in
weston must comfort himself with the
announcement that TALL things consider
ed, there seems to be far better chance
for the proposed new stock than for the
present stock. or it's equivalent, to arrive
at good market value" Besides, the
stock will have UNLIMITED time in which
to improve in value as the system de-
velops in earning power by the develop
mont of the vast country tributary to it."
To get into the new deal, the stock
holders and second mortgage bondhold-
ers must put up $13.500, 100 and see both
the capital and bonded indebtedness of
| the company increased The first mort
gage bondhOlder puts the case to the
stockholder this way: "If you will pay
up the taxes and other accrued charges
against the property, will forgive your
present default and place you out of all
danger of defaulting again by agreeing
to go without the interest that is now due
me and the interest on 20 per cent of my
principal, unless you find that you can
earn it."
But, after all, the proposition is fair
enough to the innocent investor in Atch-
ison stock, considered in the light of
every day business transactions. The
bondholders have it in their power to
freeze him out altogether and it would
be TO their interest financially to do so.
The property is fully worth the amount
for which it is mortgaged.
The plan of reorganization is better
than the one submitted last year and is q
| great improvement over the one under
/ which the reorganization of 1899 took
| place. Perhaps it is the best that can
! be devised at present with SO many con-
! fiicting interests to satisfy. Mr.. Gleed
seems to think that reorganization will
be effected as proposed. Fortunately for
the plan, the larger stockholders are also
bondholders. It is safe to say that if
adopted the Atchison, Topeka and Santa
Fe railway system will not fall into the
hands of another receiver for many years
to come. Ample provision is made for
the future.