Arizona republican., 1898-05-17

Ol IuCurS earnings, tlC., VIII De 1OunQ
 on pages 4 and 5 of the circular ac- companying the proposed plan of re-
 organization.
 The management of the new com
 pany will be on strictly business
 basis. AS a general rule, I have found
 that intelligent men, as our water consumers are, are reasonable, ana
 we are going to meet and treat with them as fellow associates in mutual enterprise. It is quite probable, and l shall certainly recommend it, that the water consumers will be given Q substantial representation on ths board of directors of the new com pany. We shall have nothing to hide from the consumers and public al large. We shall take them into cur counsels and endeavor to profit by thsir experiences. No suggestion will
 be shelved without proper considera- tion. Until the question of water sup ply is finally settled, there may be times when we shall need the coop
 eratiOn of all our consumers; but as to this matter of water supply, it is to be hoped that within a very short time definite plans will have been consum- mated for the supply of all the water which may be needed or even desired
 In the interests of economy and mu-
 tual advantage, the committee has thought it most desirable that the companies should be consolidated, and
 the plan Of reorganization is drafted
 accordingly. In arriving at proper basis for consolidation and division of the new securities between the re spective security holders of the old companies, the committee has made careful investigation of the assets of each company, the values thereof an6
 the secured indebtedness against such assets. constituting a prior lien to tn { bonded debt, and which must therefore
 be paid if the said assets are to be ac-
 quired for the new company. Thas5
 figures, together with the repairs and
 improvements to be made, constitute the cash requirements of the commit
 tee and the new company, to be met by an assessment of the bondholders. This assessment of s200 per bond Will undoubtedly seem large to those bond holders who are not familiar with the financial condition of the company; but when you notice by the debt state
 ment of the respective companies ac- companying the plan, that the joint indebtedness of the respective com panies, which should, if possible, be | taken care of, amounts to about $200, 900, and the improvements alread ' | made and those contemplated viii consume at least $75,000, it will be | seen that S200 per bond will not return any too much money, even if every bondholder avails himself of the D. O. | posed plan
 It WAS found that the appraised value of the assets of the Improvement con-
 pany, with all of its indebtedness paid | have therefore about equalled the value of the assets of the Canal company
 with all of it's indebtedness paid, and
 the securities of the new company have therefore been divided between ! the security holders Of each raspectiy.
 company as nearly as could be, with l due consideration of other matters of detail.
 | For instance, the bondhcldsrs of the l Improvement company Gas d whole) get more first mortgage bonds than the bondholders Gas a whole) of the Canal company. This was thought
 necessary in order that every bend holder should have an absolute frs | mortgage bond for the assessment oi $20O, and there being more bondho,d- CTS of the Improvement company tban the Canal company, it will of couTs be seen that they get more of the said first mortgage bonds than the Canal company. This advan- tage in first mortgage bonds to the Improvement company is somewhat offset by giving the Canal company more income bonds than the Improvement company, and then, finally, the whole arrangement is averaged up in the stock, where the Improvement company gets sufficient stock to bring the par value of al
 new securities received by the bond
 holders, up to a little more than ths par value of his old bonds, accrued
 interest and the $2O0 subscription paid.
 The point which has given the com mittee the most concern, is the possi
 bility of there being some bondho ders not able to subscribe the required S2OO per bond. The committee spent mucb time in an effort to avoid such a con- urgency, and endeavored to make provision for bondholders not paying the required subscription, but found
 it impossible to provide for such a contingency. No successful plan could be put through without the necessary cash to pay up the indebted ness, thus protecting the security, and putting the property in proper con- dltion. We must have the money; the only question therefore was how to get it. With the companies in their deplorable financial condition, in the hands of receivers, and virtual fail ures, we could not hope to find Dur ehasers for the bonds. Efforts were made in several directions to have these underwritten. but without sue POPPNCQCK