The Seattle post-intelligencer. [volume] (Seattle, Wash. Terr. [Wash.]) 1888-1914, 1896-04-01

a sTn1sca,e os So aee go has been formed
10 provide ths szozn.s Of cash estimated
as n.ees.ary 70 carry o1s the terms o. :hs
plan Of Reorganization. 90 furnish the Few
company WITH cast working capital AID
WITH q sur Estimated At e GO 90 for early
use IA b@tss-rsent and er-arxsn1e-t Of its
property. TT% total ret income Of the
road fer rxE vas Ess. sss. eu, In iss9 Il
was Sc -. ss, ard the Average for the
past Eve years has be.a 8, sss .s45. This
would not he sufficient 70 par the tota, AZ
nuai charges prior 10 The corn-sca stock
bur 3. would pay the Interest on the bonds
The presen; fixed annual interest aad sink
srg sun5 charges amount TO sis.ss.saa. ami
the adjusted act iEcone from all sources
applicable 70 th-ze nxec charges was fer
the nsczi year ending Juns u. fssS. ~
ess ~ snt during the past i've years has
averaged s-.saf as. II is not difsouIs to uE-
9arziard. therefore, why the road went
Into the haFds Of receiver. II We have
. return to the eozditIons which prevailed
In 1856 to 1898. during which period the
average ne, income vas over G.sosooe.
there would be no difaculty IN paying the
interest," provided for In the plan OF reor-
ganixstlon-
The weak point, Of course. is the narrow
margin allowed for bad years. although II
might be safe to assume that Il will ee
many years before the net income o< one
railroad Will fall OF, nearly s5oon.so in one
year. as the income Of this road did In
1884 The year 1885 was much better, but
even that provided means far below the
amount required for interest on bonds. to
say nothing % that On preferred stock or
dividends on the common stock
The plan for reorg anizAtion includes
abandonment Of Chicago as the Eastern
terminus, and the limitation OF the railway
on the East by the aalssissippf river and
The Grea; Lakes: the ultimate union 0
main line, branches and terminal proper
ties through direct ownership by sim
gle company The reduction OF the fixed
annual charges, Is already explained.
brings them down TO less than the
minimum earnings under probable con-
ditions. and ample provision for add
tional capital az required In q series
OF years for the development of the
property and for the greater facilities ne
csssltated by an increased business. this
last being based upon the report Of the re-
celvers which stated that provision
should be made Tor extraordinary expenai-
lures In the next Ave years OF s. ooo.o 900. in
order 90 place the property on an equal
footing with its rivals for economical ope-
ration"
While the amount OF capitalization WI
be ssh zoo 600 5 soon as the plan IL per-
fected. that is exclusive of bonds and
tina; ultimately the earnings will. under the
scheme. have to take care Of So. ooc. eee
made W as follows:
First-.prior lien ico-ysar 4 per cent sold
bonds for $50 900 900.
Sscond-General lien. i5o-year per cent
gold bonds. amounting to 30 100. 900.
ThIrd-Preferrsd stock, Per cent nsn-
cumulative. s7s,coo.0o.
Fourth--Common stock $50 90. 600
Everything must depend upon the hon
esty and ability OF the Management.
The margin IL so narrow that IL there
should be n recurrence OF the conditions
prevailing during the past ten years. the
reorgsnixa ton VIII only result in enabling
the holders OF the frst lien bonds to sell
their blocks and leave the road to wreck
ers. and within less than Ave years place
II back in the hands OF receivers.