The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1899-07-19

had large Investments in important coal.
depot, land and terminal companies
At that time, however, it was liable
as principal or guarantOr for more than
$3.50, 100000. on which the annual inter
est charges were more than SO, POO, 600.
and its net earnings from all sources
were less than $500, 900. It was evident
that no plan would be effective that did
not either require the holders TO surren-
der a portion of their holdings or that
did not reduce the annual interest
charge on the same.
A plan was accordingly promulgated.
which was accepted by almost all the
holders. under which there was issued
$50. 600, 600 4 per cent general mortgage
bonds, and $50. 00O. coo per cent income
bonds. After this much had become eff
fective it was assumed that the income
OF the property would be sufficient to
meet tbs interest on the first mortgage
bonds. and ordinarily contribute reVe-
nue. in the way of dividends TO the hold
ers of the income bonds. and also in
the future produce something for the
owners of the stock-which had decraas-
ed in value from 40 TO 65 in a short
space Of time.
APPLICATION FOR RECEIVER
Notwithstanding the year ending June
90. 1Sa3 was in the matter of income the
most fortunate in the history of the
AtchisOn, its gross earnings were many
millions short of its requirements. and
a receivership and foreclosure were in
eTirable. as the road was hOpeleSsly in
solvent Consequently on December p,
1898, an appHca ton was made to Judge
Caldwell d Little Rock for the appoint
uent Of receivers
OFFER TO BONDHOLDERS.
The plan promulgated March IA. 1895,
proposed to give to the holders of the
general mortgage bonds (drst mortgage
bonds . per cent in new per cent
bonds and 40 per cent in income bonds.
the interest on which at 4 per cent per
anuum should be paya Bile if earned. but
r
ers of the first mortgage bonds to scale
their securities p per cent To the
owners of the $50. COO .000 second mort
gage bonds the plan offered preferred
ers would stand an assessment of $40
on each bond Of 81. eco face value. To the
stockholders OF the AtchisOn company
the committee proposed to issue for each
800 of Capital in the old company a like
amount of common stock in the new
company and SO of preferred stock,
upon condition that such stOCEhOlder
would sustain an assessment OF $40 on
each share of stock held by him, thus
enabling some $4,000 600 to be raised
for the purpose Of recognizing the
company
The object of any reorganization is to
obtain money necessary to put the at
fected line on sound and financial
basis This ordinarily requires not only
that the road shall be foreclOsed and
sold and some provision made for the
holders OF preferred liens, but it like
wise requires that money shall be pro-
vlded for the Immediate necessities of
the company. for almost invariably a
company which requires reorga MIA ton
has lines of railway that are not in
good physical condition And then too.
as in the case of the Atchfscn. receiver
ships generally result in large receiver
ship debts. which must be paid of in
cash and for which securities Will not be
taken
FINANCED IN HOLLAND
Tt is the usual thing to offer stock
holders some opportunity 10 invest in
the securities of the new company. This
Is because those who have been stock
holders IN the company generally know
its condition better than others and are
mora willing to invest in the doubtful
or speculative securities which the com
pany may issue The reorganizers con
sequently supposed that the Atchison
stockholders would pay the assessment
OF SO per share, not because the securi-