The Washington times., 1901-11-24
THE WASHINGTON
TRACTION SALE.
A STEP TOWARD REORGANIZATION
New Company to Be Formed by the
Committee Having the Prop
crty in CharEe-Pian Pro-
Eressing FaVOrabIy.

The sale of the Washington Traction
properties at auction yesterday at Nor
folk, Va, is an important step in the
financial rehabilitation of the syndicate
railways by the reorganization committee
having that work in charge.
The securities of the Metropolitan Rail-
way, the Columbia Railway. the United
States Electric Light Company, and other
street railway and lighting companies
formerly owned by the Washington Trac-
tion and Electric Company are now the
property of the reorganization committee.
This committee will proceed as rapidly
SIS possible to form a new concern, en-
sracing all the different constituent COM
panies, in accordance with the law passed
by Congress two years ago. The constit-
uent companies will go out of existence.
1t may be stated on excellent authority
that the plans of the committee are pro-
crossing most favorably. 1t is said that
practically all the Washington Traction
bonds and stocks have been deposited
with the committee and that there is no
opposition to the plan from the holders
II is also stated that the bonds of the
new concern now being formed have been
underwritten by important financial in
terests.
Not Financial Success.
The Washington Traction Company was
not a financial success. It was formed
somewhat more than two years ago by the
purchase of the controlling interest in
nearly all the street railways, and the two
electric ligAting companies of the Dis
trict. Immense Improvement of roadbed
and rolling stock were carried through at
heavy expense, and large portion Of the
entire system was practically rebuilt.
From the first. however, the system fail
cd to earn enough to pay its expenses.
The company issued S2O,C0O,G coo collateral
AZ per cent bonds on the securities of
the constituent companies. and S12,O00.C0O
stock. OF the bonds about s13. 100000
were sold The interest on these bonds
was somewhat over $600,CtG annually. The
company made two or three interest pay
mcnts but at the same time was piling
up a floating debt. Last June, default
was made on the semi-annual interest
payment OF s3O0,O00 and the bondholders
applied for a receiver. Since that time,
the concern has been run by the receiver,
Allan McDermott, and the bondholders
reorganization committee, composed of
important New York financial interests,
has been at work On its plan.
Plan for the New Company.
The reorganization committee an
nounced its plan some weeks ago, and it
has been fully described in The Times.
Tie plan cort--rrl.t. al rs ue of per
cent bond Instead n- .. per cent is
=-e la8 jig rt. W1slHg gton Traction
.5lE4ur r. lrr i'll be smaller
taaa lhs waHl -et.r -a ton issue also,
thg rcldars a. .. Ola ..l IS having greed
. k- Hg lt - holdings i5 per
cent. This will make the fixed charges
of the company materially less than here
tofore.
The bondholders are recompensed for
their sacrifice of bonds by receiving pre-
ferred and common stock of the new
company to the extent of $3.50 preferred
and $500 common for $3.50 bonds given up.
The stockholders of the old company
are to receive a small amount OF pre-
ferred and common stock for their hold
ings. They were at first not disposed to
accept the provision made for them by
the reorganization committee, but as their
stock would be entirely without value if
the company were sold at auction, they
were finally persuaded to agree to the
terms.
Outlook for the System.
The committee makes the statement
that the earnings of the properties of the
syndicate have increased handsomely dur
ing the present year. 1t is said that there
is an excellent chance that there will be
a good surplus Cor the preferred stock of
the new company after the payment of
the fixed charges.