The Topeka state journal., 1899-12-29
LOSING $4,000 A MONTH.
Reasons For Harper and Brothers
Failure is Made Apparent.


New York, Dec 29.-At the instance
Of creditors whose claims aggregate
nearly half the entire Indebtedness OF
Harper and Brothers, a committee, OF
which Alexander z. Orr is chairman,
has undertaken to prepare and submit
to creditors plan of reorganization
Preliminary to this task the company
has prepared a statement of facts in
which it is set out that the total liab1l-
tiles of Harpers and Brothers are 3d.
993, 900.
The secured Indebtedness is 81, ,001, 900,
consisting of notes, open accounts and
a mortgage of $4,000 secured by bonds
and real estate. The unsecured indebt-
edness comprises commercial paper and
open accounts.
In 1896, the corporation mortgaged
its property to $4,000, 600 Of five per cent
100 year gold bonds. OF this amount
$2,645,O0O stands as collateral. The re-
mainder of the issued bonds, 1855. 000 are
outstanding and controlled by the COM
mittee for the purpose of reOrganiza-
ton The mortgage represented by the
bonds covers all the property of the
corporation except stock on hand, bills
receivable, supplies and cash on hand.
Omitting the asset OF good Will and
plates, estimated at S5OO,OO0 value, ana
deducting the bond and mortgage,
S694OOO remains against the outstand-
ing bonded indebtedness of 50, ,645, 600, or
26 per cent of their par value.
The estimated net available assets,
not covered by mortgage, to meet unSe-
cured claims, are substantially $442,-
607. The net liabilities in excess of
bonded Indebtedness are placed at 81
962, ,612 and comprise bins payable, gen
eral creditors manuscripts, advertising
and unexpired subscriptions, leaving
net available assets equal to 22.5 per
cent OF net available liabilities. exclus-
i've of cost of receiVerShip and Hquida-
tiOn. The committee regards the above
estimate of value of assets. except as
a going concern, to be very excessive
All the assets covered by the mortgage
are deducted in computing the probable
excess of unsecured creditors, because
in the cOmmittee'S s judgment the prop
erty covered by the mortgage would not
realize under foreclosure sale more than
enough to satisfy the secured claims.
Wherefore, the committee concludes,
If the corporation is not continued as
a going concern, the unsecured creditors
would receive a very small per centage
of the par value of their claims. Little
if any relief is anticipated for creditors
from Endorsements of commercial paper
sold by the corporation and held now
as unsecured claims. The statement is
made by the committee that under di-
rection of G. B. NJ. Harvey, agent of
the trustee and receiver now in charge
of the property, operating expenses have
been reduced to $4,000 per month,
equivalent to a saving of interest on
IS, 900 600. Mr.. Harvey has reported to
the committee that the total loss from
the business during the first eight
months of the present year was nearly
100000, but that owing to retrench-
ments referred to, he is certain that the
corporation is now earning its Operat-
ing expenses. TIr. Harvey believes that
with proper mana cement free from GUS
tody of the courts the business can earn
in 1900 about 100000 above operating
expenses.
The committee therefore recommends
to the creditors that the business be
continued under strong single handed
control The committee mas assurances
from the holders of practically all the
bonds that with the concurrence of the
unsecured creditors continuance may
be had upon a sound financial basis.
The plan for the final readjustment of
the Corporations affairs is now in pre-
paration and Will be duly submitted to
the creditors.