El Paso daily herald. (El Paso, Tex.) 1881-1901, 1899-07-22

ceiverships generally result in large
receivership debts. which must be paid
off in cash and for which securities
will not be taken.
FINANCED IN HOLLAND.
It is the usual thing to offer stock
holders some opportunity to invest in
the securities of the new company.
This is because those who have been
stockholders in the company gener ly
know it's condition better than others,
and are more willing to invest in the
doubtful or speculative securities
which the company may issue. Toe re-
organizers consequently suppose hat
the Atchison stockholders would pay
the sessment of $40 per share, OF be-
cause the securities they would eceive
would be at the time equal to the
amount paid by them, but because OF
the faith they had in the property.
Any reorganization plan must be I'M
derwritten. That is, responsible men
must be found who will for stipulat-
cash necessary if the holders of the
securities fail to take what is offered
them under the plan. And it must be
under written by men who can raise
millions of dollars. The Atchjson un-
derwriters were required to raise S14,
900. 900 if the holders of the common
stock and second mortgage bonds re-
fused to pay their assessments.
1t is said that when the plan was Of
fered in New York the ablest and
most successful financial men of the
city declined to underwrite it. They
thought the times were not propitious
for such q drastic plan as the
one proposed. Therefore the plan
was taken to England and Holland,
where 1t was uuderwritten. 1t is a
significant fact that the people Of En-
gland and Holland have always had
great faith in the Atchison sys-
tenn.
After the plan became effective q
sale of the road was had and the new
company took possession January l.,
1896
DEAL WITH THE SOUTHERN PACIFIC.
After the Atchison had acquired the
stock of the Valley company 1t was
necessary that some arrangement
should be made for connecting the line
of the Atlantic and Pacific, terminal
ing at Mohave, with the line of the
Valley road, terminating at Bakers
field. This would require the construc-
ton of line through one of the most
difficult passes in California and would
have cost the Atchison sever al millions
Of dollars. The Southern Pacific was
naturally anxious to keep the Atchison
out of San Francisco If it could, but
upon becoming satisfied that the At
Gibson would build if not given track
age rights over their lire the Southern
Pacific finally concluded to grant the
Atchison company the right to operate
its trains over the Tehatchapie pass
upon the payment annually of an
amount estimated to be per cent on
one-half the cost of the Southern Pa
cifc's line.
The San Francisco and San Joaquin
Valley company Is a corporation orga-
nized by the people of San Francisco
for the purpose of getting q connection
with eastern lines that would be ope-
cru Pacific. All the money necessary
for the construction of the line to q
connection with the Atchison was rails
ed in San Francisco. The Atchison
company paid for the stock of the Val
ley company the exact amount paid in
by the subscribers. The Valley COM
pany's line has been completed from
Stockton to Bakersfield, and is now in
process of construction from Stockton
to Point Richmond, opposite San Fran
cisco.
REDUCTION IN FIXED CHARGES.
When the receivers of the Atchison
were appointed the fixed charges on
interest-bearing securities which it
was required to pay were over SO, 800, =
600, and it's floating debt exceeded &c.
100000. On the other hand, the new
Atch1son company started under q
financial plan, the annual interest re-
quirements OF which were less than
S., 100000 per annum. This, more
than anything else. is largely respon
sible for the great succes So of the Atch-
ism 611rip the snbseOuapt
Instead of large floating debt the
new company started off with several
million dollars in the treasury. which
it has been the policy of the manage
ment to increase. Moreover, the old
company, not unlike other companies
that are prosperous, had no available
funds with which to make improve
ments Or acquire new branches and
extensions. The consequence was that
fix was required to pay enormous rates
of interest or sell it's bonds at large dis
counts for the purpose of raising neces-
sary money.
MILLIONS OF CASH ON HAND.
To guard against this contingency
the reOrganizers of the AtchisOn set
aside $50. 600, 900 of first mortgage per
cent bonds, that are now worth in the
market 1O2, to be used at the rate of
not exceeding S3,O0O,00O per year for
the purpose Of improving the road and
acquiring necessary branches aud ex-
tensions. That the company has used
this privilege sparingly is shown by
the fact that while it might have is
sued up to this time $4,000, 900 it has
issued less than Sc. 600, 900, thus giving
it at the present time, in addition to
it's surplus. more than 100000 of
available cash with which to meet any
which may arise, or for the