The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-07-22
PLAN IS GIVEN UP !.
The Road win Go Into Hands
Of . Receiver.

New York. July zz:-Iuo Ieutat1vo
plan OF reorganization OF the Rock
Island. underwritten and oversub-
scribed by q syndics te headed by Will
lam A. Reed 4 Co.. has seen aban-
doned because Of tie unwi1lingness OF
the syndicate to finance 1t in View of
the Unsatisfactory financial showing
made by the company under the new
accounting rules Of the interstate
commerce commission, which went
into effect July 1.
The plan called for the raising OF
$30.000.000 to be expended during the
next three years.
Tho stockholders' committee, in its
statement commenting on the revision
OF the balance sheet and estimated
earnings. said
This statement was presented on
July Il and after careful consideration
Of the same he stoclkholderG sprotcc-
tive committee has decided it mad
visable to proceed with tho tentative
plan.
Tho syndicate which was formed
to underwrite tho plan and which was
coed and has been dissolved"
William A. Reid. chairman of the
stockholders' committee. said the de-
probation for equipment prescribed
by the commission was one of the
many rulings that would result in re-
duced earnings. He added that aban-
donment OF the plan did not mean
would be dissolved. and intimated
that there might re future meetings
Of the committee.
Committee Explains.
Tho collateral trust bondholders' COM
mtttee raid the syndicate declined to
proceed because earnings Of the railway
company for the fiscal year ended Juns
30. 1918. e.s estimated by the accounting
officers Of the railway under the. rules
for accounting prescribed by the COM
mission did not make a sufficiently sat
isfactory showing as to dividends upon
the proposed issue of preferred stock.
1t also said that adjustment must be
made in the capital or properties, ac-
count Of the railroad company which
ttrely wipe out the surplus shown on
the books of the railway company. The
period Of grace in the trustee agreement
securing the collateral trust bonds, will
expire August 1. Foreclosure proceed
inge Hereunder should be instituted
Immediately thereafter.
Rather han return deposited bonds
to depositors and dissolve the commit
tee. this committee has deemed it wise
to ask for an immediate deposit Of addi-
tiCnal bonds
The bondholders' committee states
that when sufficient bonds have been
deposited it will form a reorganization
plan upon the principle Of giving the
collateral trust bondholders the oppor-
tunity or necessity OF raising the money
required.
A member Of the COMMITTEES said that
the railway company had received
|sabQut $2,500. 900 on July l and that its
Aeeds had be en- financed to january 1.
Foreclosure proceedings by the col
lateral trust bondholders would mean
Freceivership for the chicago. Rock
Island & Pacific Railroad company.
which is a holding company.
Some of the bankers who have been
most active in the effort to reorganize
the property expressed the hope that
the bondholders might now take hold
In that event. 1t Is expected in f1nan-
cfal quarters the Rock Island stock
holders will receive little considera-
ton.
Securities of the Rock Island COM
pany have been selling at receivership
prices for some time.