The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-06-20
Rock Island Reorganization
Settled BY Committees.
Drop Holding Company and
Raise Thirty Million.
NO MORE MORTGAGES on ROAD
Therefore NOncumulative Pre-
ferred Stock Is Created.
Raise Funds for Financing Of
Road in Next 8 Years.

New York, June 20.-Committees
representing the collateral trust bonds
of the Chicago. Rock Island & Pacific
Railway company and the COMMITTEES
representing the stockholders of the
Rock Island company have reached q
tentative agreement for the reorgani-
zation of the Rock Island system.
The plan contemplates the eHmina-
ton of both holding companies, q re-
turn to the old Chicago, Rock Island
Il Pacific Railway company, and the
creation of noncumulative seven per
cent preferred stock Of the railway
company. This preferred stock Is to
be sold for cash with part of the ex-
listing common stock of the railway
company.
Both bondholders and stockholders
are protected under the plan, it is st.t-
ed, and $3O,O0O,O0O new money will
be obtained. this money being deemed
necessary to finance the road for the
next three years.
The limitations of the mortgage
powers OF the railway prevented the
creation of a new mortgage for the
purpose of raising the thirty million
dollars required to finance the road,
1t Is explained. The plan contemplates,
therefore. the creation of the noncu-
mulatfve seven per cent preferred
stock Of the railway company.
The trust lndenture securing the COL
lateral bonds now in default is to be
foreclosed and the pledged common
stock OF the railways purchased, ac-
OF this common stock, collateral trust
bondholders are to retain at par 81 u
per cent CT the face value of their
bonds, and the remainder Of such
common stock is to be offered for
subscription with the new preferred
stock. The bondholders thus retain
62k per cent of the stock deposited
as collateral for their present bonds
and part only with so much as Is
necessary to raise the funds required
and to add value to the stock retained.
Subscribe for Bond Value.
In addition, the collateral trust
bOndhOlders are to have the privilege
to subscribe in cash for an amount
equal to Is per cent OF the face value
Of their bonds, receiving for such SUBJ
scrfption Is per cent of the face value
OF their bonds in preferred stock and
a Per cent Of the face value Of their
bonds in existing common stock of the
railway company.
The announcement Of the plan con-
tinues:
The stockholders Of the Rock Is
land company will be recoenized
through rights of subscription ON the
following terms:
ITO the holders of the preferred
stock paying Is per cent par value Of
their stock in cash, Is per cent of
such par value in new preferred % *
and IA per cent OF such par value In
the existing common stock of the rail-
way company.
To the holders of common stock
paying Is per cent of the par value
OF their stock in cash. Is per cent Of
such par value in new preferred stock
and 10x per cent of such par value
in the existing common stock of the
railway company.
The collateral trust bond holders
are also to have the preferential
right to subscribe for and receive the
preferred and common stock so Of
fered for subscription to bondholders
and stockholders and not taken by
them, upon the average terms SO Of
fered to bondholders and stockhold-
ers, provided such subscription right
shall be limited SO that the common
stock thereby acquired, together with
all other common stock acquired by
such bondholder under the plar
either through subscription or a.Ict-
ment, shall at par value not exceed
the face amount of his deposited
bonds"