The herald., 1896-03-16
RAILROAD Reorganization
PLANS PREPARED TO STRAI0HTEN TIE
NORTHERN PACIFIC TAN0LE
The Plans Contemplate tho Creation Of Low
Rate Securities AggreRsting Some Hum
dreds Of rliIIions to Run Something Less
Than Thousand Years.
Associated Press Special Wire


nection Herewith will appear in tomorrow
mornings papers in this city in the form
OF an advertisement over the signature of
J. P. Morgan d Co. of New York, Drexel &
20. of Philadelphia and the Deutschebank
of Berlin.
The circular as it will appear proposes
the creation of the following new &C.
curites:
First-Prior lien 1OO-year, 4 per cent
gold bonds, 100000.
These bonds are to be secured by mort
gage upon the main line, branches. termi-
nails and grants, equipment and other
property embraced in the reorganization,
as carried out and also other property
thereafter acquired by the use of any
bonds to be issued under the mortgage or
the general mortgage hereinafter men,
toned.
The proceeds Of the lands applicable to
these bonds after the retirement of the
general first mortgage bonds will be APP
piled on behalf, but not in any year ex-
ceeding SoO0,OOO, to the purchase of the
prior lien per cent bonds at not exceed
ing 10 per cent, and their cancellation,
and the remainder, under carefully guard
ed restrictions, will be used for the better
ment and additions to the property pledged
as security for the bonds.
Whenever these bonds cannot he pur-
chased at the maximum price, the TN.
applied land proceeds for that year will he
used to purchase the general lien 3 per
cent bonds at not exceeding 100 per cent,
and their cancellation.
Second-General lien 15O-year 3 per
cent. gold bands, limited in amount to
S6O.OO0,O0O in addition to reserve for the
1OO-year per cent. prior lien mortgage
of 81 100000. These bonds are to be
secured by mortgage second in lien to
the prior lien mortgage and covering the
same property.
Ihird-Preferred stock, per cent. nom
cumulative, limited in amount, under the
plan, to not exceed $73,OOO,OOO, which
amount can be increased only with the
consent of preferred and common stock
holders as provided in the plan.
Each share of this preferred stock will be
entitled to non-cumuIative preferential
dividends out of surplus net earnings to
the extent of four per cent per annum
without deduction. In any fiscal year in
which four per cent dividends shall have
been declared on both common and pre-
ferred stock, all the shares shall partici-
pate equally in any further dividends for
such year. After the termination of the
voting trust, the preferred stock will have
the right to elect q majority of the board
of directors of the new company whenever
for two successive quarterly percds the full
and regular quarterly dividends, at the rate
of four per cent per annurn, are not paid
| in cash
The right will he reserved to the new
| company to retire this stock, in whole or
in part, at par, from time to time, upon
! the first day of january. during the next
| twenty years.
Fourth-Common etock to the amount of
not exceeding SSO,cOO.OOO. In further
ance of the independent reorganization
and the administration of the property
and its securities, both classes of stock of
the new company Except such shares as
may be disposed of to qualify di-
n
following five voting trustees: j. Pier
pont Morgan, George Siemens, August Bel
mont, Johnston Livingston and Charles
Lanier, for five years. although in their
discretion the voting trustees may deliver
the stock at an earlier date. The prior
lien bonds are to be appropriated approxi-
mately as follows: To retire an equal
amount of general first mortgage, S4l,-
$4,000: to provide for the conversion
and. as far as necessary, for the sinking
fund of the general first mortgage bonds,
$l4,657, $50; for the payment of receiv-
ers' certificates and equipment trust, and
for the conversion of the collateral trust
notes ard the general second mortgage
bonds, SAC, ,O40,3 $50; total present issue I'M
der the plans as estimated at SOC, $40 900; ;
reserved to provide at their maturity for
an equal amount of bonds of the St. Paul
& Northern Pacific Railroad company,
$S,423, 900; estimated amount to be re-
served for new construction, betterment of
equipment, etc.. and to the extent of not
exceeding Sl,500,O0O per annum. S25,-
900, 900; total authorized issues, $780,
100000. The general lien bonds are to
be appropriated approximately as follows: !:
For the conversion of the general third
mortgage bonds, dividend certificates and
the consolidated mortgage and branch
| line bonds under the plan, $56.OOO.OOO !;
estimated amount to be reserved under
carefully guarded restrictions in the mort
gage for new construction, betterments,
equipments, etc., $4,OO0,OOO total issue
in excess of prior lien bonds estimated at
$50, ,OOO, 900; reserved to provide for the
prior lien bonds at their maturity in 100
years, 81 80, 900, 900. Maximum amount
of both mortgages. 500 100000.
The preferred stock is to be appropriated
approximately as follows: For conversion
and adjustment of various main line and
branch line mortgage bonds and the de-
faulted interest thereon and other purposes
as provided in the plan, $72.O0O,O0O. Es-
timated amount which may he used for re-
organization purposes or may be available
as a treasury asset of the new company,
$2.5 10000.
The common stock is to be appropriated
approximately as follows: For purposes of
reorganization, as provided in the plan,
S75.5O0.O0O. Estimated amount which
may be used for reorganization purposes or
may be available as a treasury asset OF the
new company, $2.5O0,OOO. The basis of
exchange of existing bonds and of sale of
new stock is as follows: General first
mortgage bonds, cash per cent, payable
April l, 1896, representing the coupon due
July l. 1896; new prior lien mortgage
bonds 35 per cent.
General second mortgage bonds, cash,
four per cent, payable sixty days after the
plan shall have been declared operative,
new prior lien, lS% per cent; preferred
stock trust certificates, so per cenr.
three per cent, payable sixty days after
general lien mortgages, 11SX per cent;
preferred stock, 80 per cent.
Dividend certificates, cash, three per
cent, payable sixty days after the plan has
been declared operative: new general lien,
us per cent; preferred stock, so per
cent.
Consolidated mortgage bonds, cash, 4
per cent, payable sixty days after the plan
has been declared operative; new general
lien, 66ls per cent; preferred stock, 62ls
per cent.
Collateral trust notes, cash seven per
cent, payable three per cent, May l, 800:
four per cent January 1897; new prior
lien 100 per cent, preferred stock twenty
per cent.
Northwest Equipment stock cash l 90 per
cent, payable at any time III the discretion
of the managers or before the completion
of reorganization with interest at six per
cent per annum from June l, 1896.
Depositors of preferred stock for pay
ment for sum equal to $40 per share,