New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1904-01-23
NAY ALTER SHELDON PLAN
REPRESENTATIONS NE4R.
But BOndhOlders' Committee o.
iects to the AppOrtiOnment.

Judging from present lulSdllollS inc l''' S'Ni4-
ton OF the United States Shipbu.iding Company
will be effected in the future. Tho original
plan put forward by the Sheldon reorganization
committee the central feature of which was the
conversion os the second mortgage bonds, chiefly
owned by Charles NJ Schwab. into first mort
gage bonds and the substitution of new preferred
stock for the old first mortgage bonds. has been
abandoned, announced. several days ago
Conferences have been proceeding this week on
plan. based the principle of equal treatment
for the first and second mortgage bonds IhlS
plan. it stood last night has the approval Of
Mr. Schwa5, representing the second mortgage
bonds: the Sheldon committee representing n large
majority of the frs: mortgage bonds, and Receiver
Smith 1t is understood also that il IL considered
by Judge kirkpatrick 70 be erninenty fair ana
satisfactory. 1t has not however been accepted
by the interests represented by the Bondho!ders
Protective Committee and the Trust Company OF
the Republic
The plan contemplates the reorganization Of the
shipbuilding company with a capitalization OF SO
10000 Of which N50o00O is 10 be preferred stock
and SIS 10000 common. There will be 10 bonds
but. said in The Tribune on Wednesday. there
will he issued 81 0lo00 short term notes. which may
be renewed from time time if necessary. and 1t
is understood that Mr.. Schwab stands ready 10
advance the 100000 on these prior lien notes
either alone or with associates. The present pre-
ferred and common stock will be wiped out. Mr.
Sch1ab is Il receive in exchange for his $lo@hpO
second mortgage bonds 100000 in new preferred
stock and 10000 new common stock. while the
holders of the outstanding $4,000 first mortgage
bonds receive 100000 in new
preferred stock and 10000 in new com
mon. Figured at S. for the preferred and .
for the common. which were said yesterday 10 be
unfair valuations. the stock apportioned under
the plan TO the second mortgage bondholders (vir-
tually Mr.. Schwab alone would be worth $S.701G0.
and that issued in exchange for the first mortgage
bonds would be worth 100000. The reason for
giving Nj Schwab co per cent preferred stock and
20 per common for his 100000 second mort
gage bonds while the 81 10000 first mortgage
bonds would get only 40 per cent Of their stock
allotment in preferred stock. and the other CO per
cent in common stock. said yesterday 20 he
that in the apportlonment regard was paid the
fact that the Bethlehem Steel Company. which is
represented by the 100000 bond issue. IS the
valuable part of the shipbuilding company.
The Bondholders' Protective Committee. however,
takes the position this allotment is based upon
the assumption that Mr.. Schwab is still the owner
OF the Bethlehem company, whereas tho fact IS,
they assert, that that property is owned by
the United States shipbuildng Company, and it
follows that in the reorganization the second mort
gage bonds should be entitled to more recOgnl-
ton than the first mortgage bonds The Directing
bondholders also profess anxiety for the future
OF the company IL a result OF the reorganization
it should be dominated by the Schwab interests.
outcome which is certain II the plan it
now stands is adopted. There is reason be-
leve. however. that this alarm Is not lively
be in itself a reason for Withholding assent
the plan; and IT would be surprise 10 Wall
Street II with some concession made by the spon-
for the pending proposition-perhaps allotting
TO the first mortgage bonds 100000 preferred
stock. instead OF 100000. and 100000 common
stock instead OF 10000 and correspondngly
changing the proportions of the preferred and
common stock to be given in exchange for the
second mortgage bonds-the opposition to the Shell
don committees latest proposal would be with
drawn and the reorganization put through with
further hindrance
Speedy reorganization cannot be effected without
the concurrence OF the bondholders' committee.
however A receiver stands in the place of the
company and either consents 10 or opposes on ap-
plication for foreclosure. Receiver Smith entered
answers to the applications made for foreclosure
of the shipbulding mortgages. and ordinarily the
withdrawal Of his answers would have the effect OF
permitting the foreclosures TO be made. 1t de-
velops. however, that Mr. Untermyer. counsel for
the bondholders' protective committee. when he
consented, some time ago. to certain amendments
moved by Mr.. Guthrie in the different courts
throughout the country in which Receiver Smith
made ancillary receiver, caused the stipula-
ton to be made and orders entered in every court
providing that IN case the receiver should eyer
withdraw his answer the bondholders protective
s0swar IaciicaIiy taxing he n ana make
in lighting the foreclosures.
Mr.. Untermyer expected to start late on
Thursday night yesterday morning for Ohio
He remained in town yesterday and attended con
ferences. He said yesterday afternoon that he
will go on for several days. and an application
for a further adjournment OF the shipbuding mat
ter, up Monday before Judge Kirk
patrick in NewJersey. will in consequence be made
1t is hardly probable that the hearing will be set
for earlier date than Monday. February /, and
meanwhile much may be accomplished by the
eral bondhoding interests in the shipbuilding COM
pany in the way OF getting together"
report that George W. Vanderbilt. who is a
brother-in-Iaw OF d. lie Roy Dresser, formerly
president of the Trust Company Of the Republic.
had advanced 100000 United States ShipbuiIdng
Company stock collateral. and that this would have
be repaid before hts representatives would con-
sent TO settle said yesterday afternoon by one
OF the attorneys prominent In the shipbuilding lti
CATION be untrue 1t is understood that the few
shareholders % the shipbuilding company who
actually paid cash for the shares they also
insisting that they shall be repaid before reorgani
Zation is effected.