The daily morning Astorian. [volume] (Astoria, Oregon) 1883-1899, 1895-09-04
BRAYTON IVES SCHEME.
He Has a Plan to Reorganise
The Northern Pacific.
MAYBE PEARsALL is PAID
To Bring Suit-SO Says President
Hill-Great Northern VIII
Do Nothing Illegal.
MAYBE PEARsALL IS PAID

In view OF the decision in the Unitec
States circuit court at Seattle on Monday
in the Northern Pacific receivership case
published in these columns, the following
special telegram from New York to the
Pioneer Press will be OF general interest,
Brayton Ives has invented plan to re-
organize the Northern Pacific, although
Just what use 1t will be to anybody no
one can tell. He may have concocted II
as mental diversion, but at all events
1t is interesting. Mr.. Ives has taken much
satisfaction in privately submitting his
plan to a number OF people. 1t Is the
same plan, the early PRONUNCIATION OF
which Mr., Petit, the general counsel OF
the company, has recently announced in
in one of his published interviews In the
Northwest, In which he also expressed
his confidence that 1t would be received
with general favor. The plan Is based on
a provision In the eleventh article of the
first mortgage deed of trust requiring
that all proceeds of land sales shall be
applied to the redemption of the first
mortgage bonds at 40 and accrued inter-
est Now Mr.. Ives proceeds on the the
cry that, inasmuch as under this article
all the first mortgage bonds, and, as the
same provision is also found In the Sec
ond and third mortgages all the bonds
under them can be paid off out of the
proceeds Of land sales, all that is neces-
sary for making the paying off of all
the bonds under the three mortgages
practicable is to make the lands yield
sufficient money to do 1t. He estimates
the amount required at $4,000 900, ana
feels confident that under his scheme
this vast sum can be readily provided for
by simple method.
A corporation is to be formed for the
purpose of buying all the lands to which
the company is entitled under its grant
for SIS, 100000 in cash, under contract,
however, binding the new corporation to
resell the bonds to the reorganized Nor
thern Pacific Company for a correspond
ing amount of new per cent bonds, uni
formly secured by one mortgage on all
the property of the company BY this
double operation the fixed charges under
the present three prior mortgages for
interest and sinking funds payments
would be reduced over 100000 annually,
and the arrears Of interest on the second
and third mortgage bonds wiped out,
and thus the company would be placed in
position to deal easily with its creditors
and thus carry through the reorganiza-
tion with but small, If any, assessments
of the two classes of stock.
The Pioneer Press correspondent called
upon several prominent inanciers on
Wall street this afternoon to ascertain
their opinion of the proposed plan. They
are about evenly divided for and against
Mr.. Ives scheme. The principal member
of one of the leading Wan street firms,
which has been in the syndicate that
originally placed the first and second
mortgage bonds when shown a copy OF
the plan, as stated In the foregoing, said:
DO you wish to fool me with such stuff
as that?" The questloner protested that
his statement was made in good faith,
mentioning the name of his authority.
Il do not care who your authority is,r
was the reply. you can tell him for
me that he Is an unmitigated ignoramus,
and, II he has any doubt about 1t, let him
read Article II of the first mortgage
and also Article 122. The whole
Is absurd and ridiculous, In
view of the fact that the company has
taken title to only about one-third OF
the land grant, comprising the best lands,
which are already sold, and that as to
the remainder, most of 1t not being aver
surveyed, nobody can tell how 1t will
pan out"
1t seems that there Is a flaw In every
plan, but those favoring 1t say this is a
matter which can easily be adjusted. The
last part of Article II limited the opera
tion Of the provision on which Mr.. Ives
rests his plan to five years, expiring July
l, 1896, and article 70 restricts the pay
ments into the sinking fund and the COM
pulsory annual redemption of bonds at
li0 and accrued interest to per cent OF
the first mortgage bonds originally sold.
President Hill was seen In St. Paul re-
garding the exclusive announcement In
the Pioneer Press that the State OF Min
nesota, through its attorney general, will
oppose the big railroad DEAL probably
by intervening in the Pearsal suit this
morning, and said:
Our railroad and every other railroad
is legal corporation, and Its existence Is
a legal existence If 1t has not a legal
right to do what 1t proposes to do 1t can
rot be done, i have stated often enough
that we propose to do nothing contrary
to the law. OF course, suits will be
brought and other obstacles will be plac-
ed In the way. People have right to do
that II they see fit, and we have q right
10 defend ourselves. We have consulted
some pretty good counsel, and are con-
iinced that what we propose to do Is
light and consistent with the law"
HOW about the Manitoba stoclShold-
,rs?'
II know three-fourths OF the stock
lolders of both the Manitoba and the
treat Northern desire the proposed ar
and / know the Northern Pa
life bondholders desire It. I have always
lad the full confidence of my shareho.d-
RS, both for the Manitoba and the Great
Northern, and have no misgivlngs as to
heir wishes and doubt not how far they
viii support any action take. Bear this
n mind: They have to ratlfy any action
take before 1t is legal. Mr.. Pearsall is
IN o.d stocldholder in our company. l
lave known him for ten years, but have
lot seen him for many years past. He
lever called to see me and protest against !
my proposed plan. 1t would be interest |
ng to know whether he is bringing this |
iuit on behalf OF the same party that is |
rying to oust the receivers. know that |
,eople who are filling the papers from |
Puget Sound to the Atlantic coast with |
affections to the plan have tried to bor-
ow our stock from our stockholders and |
lave Offered a premium on 1t just 10 |
,rinQ sIft and make trOubleU