The Washington times., 1901-09-20
OPPOSITION TO THE PLAN.
Washington Fraction Interests to
Refuse Committees Report.
Meeting of Stockholders and Bond
holders to BE Held TO Endeavor
to Agree on Suhstitute-AnaIy-
sis of the Present Proposition.


holders TO BE Held TO Endeavor
to Agree on n Suhstitute-AnnIy-
sis of the Present Proposition.
The plan of the Washington Traction
bondholders for the financial rehabilita-
ton of that company is opposed by the
stockholders of the company and it has
been learned that they have decided not
to agree to ii. 1t is understood that a
number of holders of the bonds, too.
are not in accord with the plan, which
represents the wishes of the larger inter
osts among the bondholders. IT is be
lieved that the plan cannot be carried
through unmodifed. y meeting of both
majority and minority bondholders and
stockholders will be held today or tomor-
row in New York to endeavor to bring
together the different interests either by
ahmodifcation of the present plan or by
an entirely new one possibly.
The plan as announced by the bond
holders committee. consisting of George
w. Young, Chairman, John Crosby
Brown, james Timpson, w. H Hollister,
and Gardiner M Lane. and published in
The Times and elsewhere. has been much
discussed and analysed from every point
of view-as to its feasibility from a prac-
tical financial standpoint and as TO its
fairness to the different interests con-
cerned There is adherence of opin-
ion on all these points.
As has been fore roshadowed in The Times
on several occasions recently, the Wash
ington Traction Company is to be fore
closed 1t is proposed that of the bond
holders committee acquires the property
of the company, consisting of the securi-
ties of the subsidiary companies, 1t SHAH
transfer this property either to new
concern or to the Washington and Great
Falls Electric Railway Company, under
the law passed by Congress over year
ago. One proposed name for the new
company is the Washington Street Rail-
ways Company
In brief the financial plan of the COM
mittee proposes that slT,50o,00o new per
cent bonds shall be issued; that sS5oJ,vo
preferred stock and s6,50,c0o common
stock shall be issued: that each holder OF
the present Washington Traction bonds
shall receive for each 5000 bond $3.50 in
new bonds, $3.50 in new preferred stock
and 500 in new common stock, and that
upon a payment of 50 for each share OF
Washington Traction stock its holder
shall receive 50 in new preferred stock
and $50 in new common sloch
The first provision of the committees
financial plan is that the new company
is to authorize the issue of Sl7,59o,e99
bonds. Although the advertisements Of
the bondhoidcI: anmittee do not so
state. it is knon.. that these bonds are
to be used as follows:
To remain in the treasury until
used to acquire underlying
bonds of the subsidiary COM
To deposting bondhelders of
Washington Traction Com
pany ACKNOWLEDGEMENTS. I,35,lc0
Snld to syndicate. G72,0J)
For acquisition of outstanding
securities. Ctc.--.---.-.---..----- 5Zl,Z5V
To remain in the treasury. 49,. 1,509.0ol
Total s17,5c0,Oao
The first question that has been dis
cussed by holders of the present Wash
ington Traction bonds and by others IN
terested in the company has been as 10
the ability of the new concern to meet
its fixed charged under the new plan. The
interest on the underlying bonds is about
SsJe.Vg9. il Will be seen that accordlng TO
the above schedule there are SS.3sZ.u0J new
bonds on which interest will have to be
paid, the balance remaining in the treas
ury. The interest on these bonds at !
per cent will be S335.6s0. The total fixed
charges will thus be SeS5eS0. about. 1t
may be stated on official authority that
the company earned this sum last year
and that 1t has done better than that
this year. so far having net earnings for
the first half year of SiS2,S6S. 1t is learned
that the officers of the present company
and the bondholders' committee believe
that the new company will earn at least
81 $4,000 annually This would seem 10
make the fixed charges of the company
assured.
If this estimate is correct there will be
an additional revenue of S3ei320 annually
Some basis is given in this for an esti-
mate as to the value of the proposed new
issues of preferred and common stock
S. 800. 600 of per cent preferred and $500, |
coo of common stock. The full per |
cent dividend on the preferred stock would |
require sf25,000 or $4,000 more than the |
estimated revenue of the company above |
interest charges. The question of the |
floating debt of the new company is also /
to be considered in this regard. however.
Many statements have been made as to |
the amount of this debt. One good au-
tority has made the statement that 1t
approaches s.. 100000
One provision of the bondholders' COM
nlfttee plan is that for each 500 share OF |
the present stock of the Washington |
Traction Company. on payment of 50. |
there shall be issued SO in new preferred |
will be seen that IL the holders of the !
entire $12, 900 of the stock should sub |
scribe to this plan there would be raised |
81 0so 600. Another plan for raising cash |
the committee provides that upon pay
ment of $50 for each old bond deposited |
the depositing bondholder will receive in 1
addition to his pro rata of new bonds a !
bonus of $50 in new bonds and SIS in new |
stock. The syndicate alluded to |
in the above schedule has agreed 90 take |
s672. 900 of the new bonds on these terms. |
This will provide s33. 600 in cash If other |
holders of old bonds participate in tits !
plan the amount of cash realized Will b, !
increased by so for each bond so Dartici- |
paIing- The total amount OF cash which |
IL would be possible to realize by this |
ton Traction bonds outstanding is $40 01o 1
II will be seen that IL both these plans /
are entirely successful 1t viii be hardly /
possible to liquidate the entire floating /
debt in this way.
1t is not understood that the 81 501O 900 /
OF new bonds to remain in the treasury /
according to the above schedule are TO be .
utilized in hquidating any part of the /
1ngs of the new company must be applied I
toward this debt, therefore: until il is /
wiped out before the new stocks of the /
company can hope TO receive any divi- |
dends.
The wording of the announcement of |
the committee with regard to the pre- /
ferred stock Is somewhat ambiguous. 1t |
describes the stock as follows: Five per |
cent preferred stock. cumulative after |
June /, 1894. entitled to no other dividends, |
but preferred in liquidation to the amount I
Of its par value. together with all ac- /
crued dividends 1t has been suggested /
that this description may mean that no |
dividend Is to be paid on the stock until /
June ], 1904, and on the other hand IL is |
said that the wording OF the committee /
simply means that the dividend shall not |
be cumulative until after Jure /. 1904 /
An expert stock broker expressed the /
opinion yesterday that the latter is an /
doubtedly the meaning intended to be |
conveyed This. however would be an