The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-12-21
TO THE SECURITY HOLDERS
OF THE

DhALAAnuOhSh ~ ObAO SOOAhV ESA EtsN
RAILWAY co.
The Baltimore and Ohio RAILROAD, tho guarantor of
certain Of your securities, having become insolvent
and its property being in the possession Of Receiv-
ers, and Its reorganization having been declared
operative, 1t became necessary for your Board, in
order to properly protect the securities of your Com.
pany, to enter into negotiations with the Reorgani-
zaton Managers OF the Baltimore and Ohio Railroad
Company to arrange the future relations Of your
Company with that reorganized property.
For several months the Board has been in nogota.
tion with them. and In consultation with the security
holders. for the purpose Of securing an exchange Of
your Company's securities for the securities Of tho
Reorganized Baltimore and Ohio Railroad Company
upon q satisfactory basis. and to secure additional
new capital to place the Company in q position TO
successfully carry on its business and place 10 on q
sound financial basis.
Since the organization of your Company, vigorous
competition, then unexpected, has developed in the
territory IL occupies, greatly reducing tho rates for
transportation received by your Company.
Tho effect of such reduction In rates has been most
serious and shows the pressing need OF q reedjust-
ment Of the Company's securities and Fixed charges,
and the securing OF additional capital TO make need
ed improvements upon the property. Had the Same
Tates prevailed last year as existed at the time OF the
organization Of the Company there would have been
q surplus over fixed charges Of 81. 278. 62e. instead
OF n dencit of Se9.6Tl.
"hch JouES oHiphu was OrRhnlIeQ.t u was DelleNeu
ample provision had been made Cor necessary capital
10 reduce its grades, secure increased and heavier
motive power, equipment and rails. and to bring the
property to the highest standard OF condition. Such
necessary capital was to be secuted through the sale
Of the Company's securities. guaranteed by the Bal
timore and Ohio Railroad Company. Immediately
upon the organization of the Company. certain of
such improvements were entered upon; before they
could be completed to the extent whereby substan.
tial savings in operation could be effected to meet
the prevailing low rates, the insolvency and receiver
ship of the Baltimore and Ohio Railroad Company
prevented the sale Of its securities and thereby ar.
rested the completion of the contemplated improve
ments. These improvements have become impera-
tive and cannot longer be delayed.
The amount Of capital now needed to be expended
in the reduction Of the grades, purchase of addi-
tional equipment and for other improvements in
orderto bring the property to the efficiency requi.
site for advantageous and profitable operation, in
conjunction with the reorganized Baltimore and
Ohio Railroad. is estimated at about IS. 600, 900. the
greater proportion OF which should be expended
during the next calendar year and the remainder as
soon as possible thereafter.
The Reorganization Managers have agreed to un.
dertake the of the plan herewith
submitted, which provides for the issue by the Bal
timore and Ohio Railroad Company Gas Reorgan-
ized). of its securities in exchange for yours on a just
and equitable basis. and the securing of additional
capital required to put your property in . position
to successfully carry on its business. The syndicate
mentioned in the plan will purchase at their face
value all coupons due on the first day Of January
next that are not paid, from such bondholders %
shall deposit their securities. It is hoped that fur
ther financial embarrassment. with its inevitable
consequences aud the depreciation in the value of
your securities. can be avoided by q prompt accept
ance Of the plan.
Your Board. therefore. urgently recommends its |
prompt acceptance. |
Dated New York, December 18th, 1903.
EDwARD R. BACON,
President.
WILLIAM L. BULL,
EDGAR I. ELLES
JOHN II. DAVIS,
New York.
JAMEs sLoAN, Jr.
Baltimore,
FRANCIS PAvY.
London,
OF Board.