The sun. [volume] (New York [N.Y.]) 1833-1916, 1898-12-17
TO THE SECURITY HOLDERS
OF THE
BALTIMORE q OHIO SOUTHWESTERN
PATIUAV m

wv
The Baltimo and Ohio Railroad, the Uuarantor Of
certain of your securities. having become insolvent
and It's property being in the possession of Receiv.
ers. and its reorganization having been declared
operative. 1t became necessary for your Board. in
order toproperly protect the securities OF your Com.
pany, to enter into negotiations with the Reorgani.
Eat on Managers of the Baltimore and Ohio Railroad
Company to arrange the future relations of your
Company with that reorRanized property.
For several months the Board has been in negotia.
ton 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 tn o
Reorganized Baltimore and Ohio Railroad Company
upon q satisfactory basis. and to secure additional
new capital to place the Company in a position to
successfully carry on its business and place 1t on q
sound financial basis.
Since the organization OF your Company, vigorou.
competition. then unexpected. has developed in the
territory IL occupies, greatly reducing the rates for
transportation received by your Company.
The effect Of such reduction in rates has been most
serious and shows the pressing need Of a readjust.
ment of the Company's securities and fixed charges,
and the securing Of additional capital to make need.
cd improvements npon the property. Had the same
rates 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 10, e2o, instead
of q deficit of s99.574.
When your Company was organized, II was believed
ample pTONlhlOn nau Deen mhQe Tor necessary capital
to 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 secured 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.
thl savings in operation could be effected to meet
the prevailing low rates, the insolvency and receiver
hip 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.
Tho amount Of capital now needed to be expended
In the reduction Of the grades. purchase Of addt
tonal 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 $6.boo.ooo. the
greater proportion Of which should DO expended
during the next calendar year and the remainder as
soon as possible thereafter.
Tho Reorganization Managers have agreed to un.
dertake the of the plan herewith
submitted. which provides for the issue by the Bal
tmore and Ohio Railroad Company Gas Reorgan-
ized). of its securities in exchange for yours on q just
and equitable basis. and tho securing Of additional
capital required to put your property in a position
" III hTTy ou "a DublucSs. IQ0 bynulCbto
mentioned in the plan will purchase at their face
value all coupons duo on the nrst day of january
next that are not paid. from such bondholders az
shall deposit their securities. It is hoped that fur.
Their financial embarrassment. with its inevitable
consequences and the depreciation in the value Of
your securities, can be avoided by Q prompt accept
ance of The plan.
Your Board. therefore. urgently recommends It's
acceptance.
Dated New York. December 18th, 1893,
W R. BACON,
President.
WILLIAM L. BULL,
EDGAR 7. wELLES,
JOIN H. DAVIS.
New York.
JAMES SLOAN. Jr..
Baltimore.
FRANCIS PAW,
London.
OF Board.