Omaha daily bee., 1899-04-03
INSOLVENCY OF GULF LINE
Receivers Appointed to Preserve Purpose Of
Western Interests.

Western Interests.
SKETCH OF THE ROADS DEVELOPMENT
kansas city, PittsburE & Gulf over
comes Obstacles In It's Construc-
tion aud Pays Immediate aud
Profitable Return.
KANSAS CITY. Mo, April 2.-The re-
ceivership for the Kansas City, Pittsburg 4
Gulf railroad granted in this city last nisht
| BY Judge Gibson OF the circuit court VIII,
according TO the companys officials, inter-
fere in no way with the operations of the
property and the reorganization plans which
have been making for some time since will,
| 1t is claimed go forward without delay.
| The receivers all OF whom are Kansas city
men, are friendly to the president OF the
road Arthur e. Stillwell, who has en-
| gineered the property from its inception.
The act they declare is a friendly one and
was made necessary to head off unfriendly
eastern stockholders who contemplated simt-
! lar action.
The history of the Kansas City, Pitts
burg & Gulf railroad ana it's joint enter
prises, the northern connecting lines and
the Port Arthur ship canal, contains prac-
! tically a revision of the long desired short
line to the gulf. The finishing of the line
was accomplished mainly through the eff
forts OF a. f. Stillwell, formerly vice pres-
dent now president of the road. The road
grew out of the old Kansas Nevada Il Fort
Smith line, of which f. l.. Martin was presl-
dent The Nevada & Fort Smith line was
projected to run to the gulf, but only
comparatively short part of 1t was finished
when Mr.. Stilwel picked UP the PROPOSE
ton. The road was built during the ilnan-
oial crisis of 1892 93 and was an undertake
! ing which few men believed would ever be
completed.
The original purpose was to make Sabine,
Tex, the southern terminus. Kount2e
Brothers CT New York owned 10000 acres Of
| land in and around Sabine. Stillwell made
proposition to build his road to Sabine if
Kountzes would give him 81 per cent of the
interests there The Kountzes declined the
offer. Mr.. Stillwell then went TO Holland
and interested Dutch capitalists in the en-
terpriSe. 1t was finally decided to make
Pert Arthur, Tex, the road terminus and
to build a ship canal from that point to
Sabine lake.
Completion of Road.
The last spike in the road was driven on
September IL, 1897, and the first through
train reached Port Arthur on that day.
While the canal was building injunction
followed injunction to delay the work, and
it was only finished on March %, last, when
the first shipping was brought up to Port
Arthur from the gulf.
In the meantime Mr.. Stillwell assumed
the presidency of the road, L. l.. Martin
being made vice president. Branch roads
becoming necessary for northern connec-
tions the Pittsburg G. Gulf company bought
and built lines giving them Omaha and
Quincy connections.
ThCse latter tines are not included in the
receivership. A bid for the Alton road, for
a Chicago entrance, was made, but fell
through Its long fight to complete the
canal made it apparent several months ago
that the road would not for the present be
able to meet the interest upon its bonds
and reorganization of the whole property
talked of. Mr.. Stllwell spent three
months in New York working on the project
and when he returned to Kansas City last
week it was announced that satisfactory
plans had been decided upon and would soon
be announced.
The reorganization plan was never made
public in full but 1t included a scaling
down of the bonds. a reduction in the inter
est rate, an issue of preferred stock and a
re- distribution of securities all around. 1t
became necessary, however, to extend the
date of filing Of the bonds by stockholders,
some OF whom, it was stated, demurred in
the reorganization. A few days ago it was
| learned according to the local officials of
the road, that the State Trust company of
New York which holds the roads bonds to
the amount of $4,000 OOO was prepared
to take decisive action if the interest pay
ments of $575,OOO due on April 1 were not
met Yesterday learning, as they claim,
that certain eastern stockholders were in
tent on applying for a receivership. it was
decided by local officials of the road to
head them off.
Plan of Local Interest.
Accordingly C. E. Grannis of New Haven,
a heavy stockholder VINO is favorable to the
local interests, applied for a receivership,
arousing Judge James Gibson of the circuit
| court from bed late last night TO appoint
receivers The men appointed, E. l.. Mar
tin, Robert Gillham and J, Med. Trimble,
are respectively vice president, general
manager and general counsel of the road
and are friendly to Mr.. Stilwell Mr.. Still
well asked not TO be included stating he
believed he could better serve the stock
holders in this if his hands were left un-
| tied.
Mr.. Stillwell says: "The uncared for in
debtedness of the company, including cou-
| pons, is only 81 900 900 or per cent of
the capital. The earnings OF the road for
March were $4,000 far in excess of any
thing that it has expected before the canal
was completed. With this amount of in
debtedness it will be a very easy job to
! reorganize the road to put it on its feet
| in very short time. Had the road three or
four months more without interruption It
would have easily paid its floating debt
without any trouble and would have had to
take care only of its coupons of $575 ,OOO."
The general allegation in the petition for
| receivers is that the road is insolvent in
| that 1t is unable to meet the interest upon
its bonds, which falls due April l. and which
| amounts to $57j,0OO and is unable to clear
away certain other debts which reach
total OF between 100000 and 100000
The Journal tomorrow will say that Judge
Caldwell or some other federal judge Will
be asked to overturn the receiyership
granted by Judge Gibson and be petitioned
I l..