New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-05-12
No Extra Inducement Of
.fered for AsSentS of
Holders.
COLLATERAL BEHIND
NOTES is INCREASED
Kuhn, Loeb & Co. May Undertake
Later Financing If Goulds
Retire.

Following the FAILURE OF inc heoN
tons with Kuhn. Loeb & Co. for the
financing OF the 10000 issue Of per
cent notes maturing on June /. directors
OF the Missouri Pacific, at a meeting
Yesterday, adopted a resolution providing
for the extension OF the notes for one
year at an interest rate OF per cent
No inducement in the form OF cash
bonus will be offered the noteholders 20
assent to this plan. but there Will De
placed behind the notes an addltionai
$4,000 collateral OF the St. Louis, Iron
Mountain & Southern refunding mortgage
bonds.
Thomas l.. Chadbourne, counesl for
George Gould, announced the plan
adopted at yesterdays meeting. Ills
statement made it clear that as far as
the financing of the Missouris Paclnc
June maturity was concerned kuhn'
Loeb & CO. would in no way be
participant His declaration was later
confirmed by Otto IL. Kahn, OF the bank
ing firm.
Mr.. Chadbourne asserted, however that
the Missouri Pacific would continue ne
gotiations for the financing OF its future
requirements after the notes were taken
care of.
'Ir Kuhn, Loeb & Co. can show the
Missouri Pacific where 1t can cut down
its fixed charges. as recommended In their
letter made public yesterday we VIII be
glad for them to show us how and VIII
let them do it," he added.
In amplihcation Of the plan adopted by
the railroad for the extension of the June
notes, Mr.. Chadbourne said that all the
noteholders would have to assent in
order to make the plan operative. The
plan will not be underwritten by any
banking firm. but noteholders will be
asked in a circular sent out to-day TO de-
post their notes with the Union Trust
Company. The non-assenung notehod-
ers. according to Mr.. Chadbourne, viii
not be paid off by the Gould interests or
any one else. The Missouri Pacific, he
said, can count on the immediate deposit
Of s7,JOO,OO0 OF the notes.
Asked IL a note for $1,000 could defeat
the extension plan. Mr.. Chadbourne con-
tnued:
yes, but I would buy that note my
self to put the plan through
WAS it because Kuhn. Loeb & Co. re-
fused TO undertake the financing of the
notes that she present extension plan was
decided upon? was another question.
There wasn't a banker IN town that
we haven't gone to to finance the notes.
was the answer. In response to the In
ouiry whether a default on the notes
would mean a receivership for the Mis-
souri, Pacific, Mr.. Gould's lawyer replied.
NO. we have, sixty days of grace in
which TO sell the collateral under the In
denture and get deficiency judgment. A
receivership. however. would be the safest
way to prevent an unfriendy action by
non-assenting noteholders. very few
of them could defeat the companys
plan"
AS stated last Saturday In The Tribune
the financing of the Missouri Pacifc's
June notes is placed squarely up 10
George Gould and his associates in the
management of the road. Kuhn, Loeb &
60. i'm their letter TO the directors laid
special emphasis on the Shortness or time
intervening between now and the ma
turity of the notes. They also said that
the company. in addition to the S25'0OOO
needed to pay off the notes. should have
$40 900 900 more without increasing fixed
charges.
How this could be brought about. how
ever. a member Of the banking firm said
Yesterday was still problematical. one
suggestion has been that the notes De
exchanged for new preferred stock. A
feature Of the kuhn-Loeb plan Is UNDER
stood to have involved the placing or
majority OF the Missouri Pacific stock In
a voting trust, which would mean the
virtual elimination of the Goulds from
the management. The refusal OF George
Gould 10 accede TO such proposal Is De-
lieved 10 be the real reason for the WIFI
drawal OF Kuhn, Loeb u Co. from the
negotiations for financing the June notes.
The entrance of Kuhn. Loeb Il CO. into
any future programme for financing MIS-
souri, Pacifcs needs is understood TO de-
pend. chiefly on the retirement OF Heofse
Gould and his associates from the man
agement. In view OF the reports that the
Gould holdings have been greatly dimlh-
ished in the recent heavy selling OF inc
companys stock Wall Street believes II
would be an easy matter TO obtain ma
iority representation Of the stocKnoioers
i'm favor OF a new management, II deposit
Of the stock were solicited.
With the exception OF the immediate
members of the Gould family who are on
the Missouri Pacific board. the opinion OF
the directors is understood TO be unani-
nous as to the desirability OF the eimi-
nation OF the Goulds. There are thirteen
directors. OF whom nine are believed TO
hold this opinion.
cOi n CYp0RTC C0NTlWlJE