Ottumwa semi-weekly courier. [volume] (Ottumwa, Iowa) 1899-1903, 1903-01-06


through the hostility of the corpora
ton on the slightest pretext in the fu-
ture.
At this meeting of the security hold
ers there seemed to be but one opin-
ion and a committee of three (holders
of securities of the company was ap-
pointed to act with the directors and
officials of the company in submitting
plans to the holders of securities and
in arranging, if possible the difficult
ty. In accordance Herewith, this com.
is made to you.
During the early part of the nego--
tiations between the officials of the
company and the city, the city de-
manded that the corporation should
eXpend in the neighborhood of $780,
600 in improvements. Those demands
have been reduced to the neighbor--
hood Of 100000 and it is the opinion
of those whom we think best inform
ed in the matter that as a matter of
compromise a much less sum will be
required, which would result in get
ting the company contract for an
other twenty or twenty-five years to
supply water for public purposes to
the municipal corporation There is
no method of raising any money, un-
less of the security-holder should vol
UNFAIRLY contribute their proportion of
the same, which is not likely to be
the case and take a very long time to
accomplish. There is only one other
way in which it can be Accomplished
There are at present secured upon
the property $4,000 of bonds, which
were issued by the Ottumwa water
works, a prior corporation, and which
constitute a first lien upon the property.
Your prior lien bonds were then is
sued under an authorized mortgage
of $150,000, of which $4,000 were de-
posted in trust and are held by the
Continental Trust Company of the
city of New York to retire at matu-
rity the $1,000 of old bonds, leaving
$4,000 of bonds outstanding, and there
then remained the income bonds,
which represent the old bonds.
In estimating the values of the Sc
curities which are held by the bond
holders, it must be remembered that
in the foreclosure sale the court had
fixed an upset price for the property
of $4,000 and that it was bought in
in your interest for S75,10 and there
We're no other bidders. This would
have yielded to you, if you had not
joined the committee, some 8 or 10
cents on the dollar; but if there had
been no organization of the bondhold-
ers it is doubtful if any bid would
have been made at the figure of $4,000
and certainly nothing bid than would
have been sufficient to clear off the
costs and liens prior to the bonds, leav.
ing practically no valuation whatsoev.
er to your bonds. We may assume
therefore, that whatever you get out
of your income bonds is purely find
which you have secured by means OF
accepting the plan of reorganization
Under these circumstances the com
mittee and board of directors recon-
mend that the prior lien bondholders
consent that the mortgage securing
their bond be released by the Continen.
tai trust company of the City of New
York and that a new mortgage to take
it's place of not exceeding $250,000 be
executed by the corporation, out OF
which $250,OO0 ISL 900 shah be depos
tied to take up the old bonds, $4,000
Sufficient to exchange par for par with
the present prior lien bonds) to be
used for that purpose, and that the re
naming 100000 be retained and in
trust subject to the order of the Off
GERS of the company for the raising
of money with which to make such i'm
provements; and that the holders OF
the income bonds consent that such
new mortgage be placed upon the
property prior in lien to mortgage Sc
curity their bonds. This will give
practically 100000 to be used if it is
necessary. 1t is proposed that none
of this money be used and that plan OF
contract be adopted by the board OF
directors without the consent of the
committee appointed by the security
holders. The board of directors and
the committee of the security holders
own or represent quite large proper
ton of the bonds, and are, with hardly
any exceptions, the largest holders o.
securities of the company and there
fore have the largest interest.
Under the present arrangement
adopted as part of the reorganization
a fund of $4,000 was set aside eacf
year after the payment of interest OF
the Sol, 900 of old bonds and the 500,
600 of prior lien bonds, with which tt
make betterments and improvements
and by the financial showing of the
company for the last year it appeared
there was a small surplus over the
payment of the interest aforesaid ant
the $4,000 fund. 1t was calculated b!
the board that out of the use of thi!
$4,000 fund during a period of year:
many of the improvements which arr
deemed to be wise and necessar.
would be made, being paid for out o
this fund, and by the issuance of bonds
for that purpose the use of the funt
is thereby simply anticipated. 1t il
proposed that in the new arrange
ments there will be no necessity TO
this fund, and the same would b.
available for the purpose of paying
interest on any additional bonds whicl
are issued.
We to assure all security holder
that no more money will be expended
and no more bonds issued tnan i
found to be absolutely necessary. w
therefore request the holders of prio
lien bonds, of income bonds and Gel
tificates of beneficial interest in TIL
stock of the company to deposit tn
same with the Continental Trust Com
pany of the City of New York, No. 8
Broad street, New York City, as trus
1