El Paso daily herald. (El Paso, Tex.) 1881-1901, 1899-07-22
SSO~OS~N>S<OS

should be remember that at present
the Atchison has almost completed its
own line to the Pacific. Its western
terminus, so far as the trains them
selves are concerned, is Point Rich
mond, just north of Oakland, opposite
San Francisco, on the bay. 1t is pre-
pared, with its various lines. to handle
the business of new and growing Okla
homa and Indian Territory. Its lines
run through the heavily wooded re-
gions of eastern Texas. 1t easily do
inmates ell that region now arid, soon
to blossom under irrigation, in New
Mexico. Arizona and southern Cali
fornia.
There is untold wealth of coal and
of iron and of timber and of precious
metals on its lines. 1t is prosperous
today. No man con estimate the splen-
dor of it's future.
IN STATE OF INSOLVENCY.
On October 10, 1889, the Atchison
company found itself practically in a
condition of insolvency. It's earnings
were insufficient to meet its interest
and some relief was Immediately neces-
sary. At that time the Atchison COM
pany itself operated a system of rail-
ways, the important terminal lis of which
were Chicago. ST. Louis, Atchison,
Leavenworth, St. Joseph, Kansas City.
Denver, Pueblo, Canon City, Deming
and Ell Paso, and it owned the whole or
a large portion of the capital stock OF
the companies whose terminals were at
Galveston, Los Angeles and San Diego.
1t also had large Investment In i'm
portant coal, depot, land and terminal
com Danies.
At that time, however, it was liable
as principal or guarantor for more than
$3.50, 00O,0 900, on which the annual inter
est charges were more than SO, 200, 900,
and its net earnings from all sources
dent that no plan would be effective
that did not either require the holders
to surrender a portion of their hold
ings 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
$3.50, 900, 900 per cent general mort
gage bonds, and $50, 900, 900 per cent
income bonds. After this much had
become effective it was assumed that
the income of the property would be
sufficient to meet the interest on the
first mortgage bonds, and ordin arily
contribute revenue in the way OF divi-
dends to the holders of the income
bonds, and also in the future produce
something for the owners of the stock
40 to IS in q short space OF time.
APPLICATION FOR RECEIVER.
Notwithstanding the year ending
June 30, 1893, was in the matter OF in
come the most fortunate in the history
of the Atchison, it's gross earnings
were many millions short of it's re-
quirements, and receivership and
foreclosure were inevitable, as the
quently on Decem Der %, 1893. an ap-
plication was made to Judge Caldwell
at Little Rock for the appointment of
receivers.
OFFER TO BONDHOLDERS.
The plan promulgated March IA,
1895, proposed to give to the holders of
the general mortgage bonds first
mortgage bonds) IS per cent in new 4
per &C Mt bonds and 40 per cent in in
come bonds, the interest on which at 4
per cent Per annum should be payable
if earned, but not otherwise-thus re-
curing the owners of the first mort
gage bonds to scale their securities 25
per cent. To the owners of the $50, OO0-
900 second mortgage bonds the plan
offered preferred stock on condition
that the bondholders would stand an
assessment of $40 on each bond of ST.
600 face value. To the stockholders of
the Atchison company the committee
proposed to issue for each 800 of CAPT.
tai in the ole company like amount
of common stock in the new company
and 80 of preferred stock, upon con-
dition that such stockholder would sus-
tain an assessmentof SO on each share
of stock held by him, thus enabling
some S14, OOO, 900 to be raised for the
purpose of reorganizing the company.
The object Of any reorganization is
to obtain money necessary to put the
affected line on a sound finsnoisl
basis. This ordinarily requires not
only that the road shall be foreclosed
and sold and some provision made for
the holders of preferred lines. but it
likewise requires that money shall! be
provided for the Immediate necessities
of the company. for almost Invariably
company which requires reorganiza-
tion has lines of railway that are not
In good physical condition. And then,
too as in the case of the Atchison. re-