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

tiles they would receive would be at the
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 a stipulated
premium guarantee the payment OF
cash necessary if the holders of the Sc
Curities Gail to take what is offered
them under the plan. And it must be
underWritten By men who can raise
millions OF dollars. The AtchisOn IN
derwriters were required to raise s14,-
100000 il the holders of the common
stock and second mortgage bonds refus-
ed to pay their assessments
Tt IS said that when the plan was Of
fered in New York the ablest and most
successful financial men of the city de-
clined to underwrite it. They thought
the times We're not prnpitiOuS for such
a drastic plan as the one prOE9Sed-
Therefore the plan was taken TO ing
land and Holland. where it was IN Ter
written 1t is a significant fact tina the
people OF England and Holland have
always had great faith in the AtchisOn
system.
After the plan became effective a sale
of the road was had and the new COM
pany took possession January I, 1896.
REDUCTION IN FIXED CHARGES
When the receivers of the Atchison
were appointed the fixed charges on
interest bearing securities which it was
required TO paw were over So. 500. OOO
on the other hand, the new AtchisOn
company started under a financial plan,
the annual interest requirements OF
which were less than IS. 600 900 per an
num- This. more than anything else, is
largely responsible for the great sue
cess of the AtchisOn during the sUbse-
quent years.
Instead of a large floating debt the
new company started off with several
million dollars in the treasury. which it
had been the policy of the management
to increase Moreover. the old com
pany, not unlike other companies that
are prosperous, had no availa BILE funds
with which 10 make improvements or
acquire new branches and extensions.
The consequence was that the com
pany, like others in the same fix, was
required TO pay enormous rates of in
terest or sell its 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
$50 000,O0O Of first mortgage 4 per cent
bonds, that are now worth in the mar
keC H. TO be used at the rate of not
exceeding 50, O00, 900 per year for the pur-
pose Of improving the road and acquir-
ing necessary branches and extensions.
That the company has used this privi-
lege Sparingly is shown by the fact
that while it might have issued up to
this time So, OO0. 600 il has issued less
than $4,000. 900, thus giving it at the
- -7S--N NA-AAes IL 49, I'm ~ rs sur
plus, more than S6,O00,0OO of available
cash with which TO meet any emergen-
cy which may arise. or for the deveI-
opment of new territory. or for the i'm
prOvement of its own line to meet new
conditions
The securities of the Atchison started
of low. People were distrustfuI of a
property that had been so unsuccessful
There were many times when the
stockholders who had paid their assess
ment of SO could not have sold in the
market the securities they received for
more than IS The first mortgage bonds
OF the company lowered between 75 and
so. waiting until some leading financial
spirit would give the Endorsement nee
essary to their enhanced value Never
theless there were people who had faith
in these securities
Low PRICES IN 1896
Atchison first mortgage bonds that
are eagerly sought now at a premium