New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-03-06
T. Nj. Schumacher, Phelps
Dodge Spokesman, Says
This Is Imperative.
OUTLINES PROPERTYS
REQUIREMENTS
fellS Wallace Bondholders' Com
mittee S2O,OOO,OO0 Is
Needed by July /.

4. NJ. Schumacher. chairman OF the CHI
cago. Rock Island & Pacific Railway
Company. in the guise OF spokesman for
the Phelps Dodge interests in the Rock
Island held In the name OF the FL Paso
& Southwestern Railway and individual
directors. yesterday told the bondholders'
committee, Of which James y. Wallace is
chairman. that the management would
take no part in a reorganization OF the
property that vas not a stock reorganiza-
ton. This message was in the form of a
letter addressed to Mr. Wallace.
Were II possible" said Mr.. Schu-
macher I'm his letter. Ito issue further
bonds upon satisfactory terms, it would.
I'm our opinion. be inadvisablo, as we
think the limit Of safety for bond issues
has already been reached until the stock
investment I'm the property is Increased.
II is. therefore, our judgment that stock
reorganization is imperative and is the
only method by which the desired end can
be attained
Unless some plan can be devised which
has good prospect OF accomplishing
these results and which is feir to all
classes OF security holders, including the
I per cent bonds represented by your
committee. the management that repre-
sent win feel II inadvisable TO continue IN
charge OF the property"
Mr.. Schumacher was placed in active
charge OF the Rock Island at the sugges-
ton Of tho PheIps-Dodge interests on Oc-
tober %. 1913 and during the last four
months has made a careful investigation
Az HnrAiftnnC
Of the property In his letter 70 Mr.
Wallace he said ne had reached the con-
clusion that approximately 100000 would
be required by July TO meet bonds and
car trusts maturing and other Indebted
ness.
He estimated that cash on hand and
net earnings for the period would aggre-
gate 100000. which. with the S.5c0W
note issue approved by the Illinois Public
Service Commission yesterday would
leave s4,5oOoo0 to be otherwise provided
for Mr.. Schumacher declared it 10 be the
Judgment OF the mana cement that the
dividend due Nav l on the stock or tho
Chicago. Rock Island & Pacific Railway
Company should not be paid
An expenditure OF 1000 FOR better
ments and improvements 10 the operating
company is needed during the next Ave
wears. he said. The total expected re-
ouirements for this period he summarized
as follows:
Present needs ,o
Betterments .............'.'-''''''' 49, 80, -
Maturing car trusts.............''' 1-'V''VVV
Against these requirements continued
MIR. Schumacher. the company now has
treasury bonds OF S15.cooooo, and Will re-
ceive In five years. at the rate Of Sboo'O~
a year. N7.5O0,0OO Of 4 per cent refunding
mortgage bonds. These securities should
have A good market if the credit OF the
company can be re-esta blished. The rail-
WAY COMPANY holds $4,000 debenture
bonds OF the railroad company. This Item
Is Of uncertain present value.
Tho total bonds for which the Illinois,
or old company is responsible is S2'o'-
4ssoo It's stock Is s75orO,0cO; SALE, liz
worth OF equipment has been purchased
since 1906. and there are outstanding car
trusts Of 81 $500. There is no issue Of
stock Of any OF the companies which can
be sold at or near its par value.
The refunding mortgage prohibits fur
Their Junior mortgage liens. The company
is therefore limited IN borrowing 70 the
use OF bonds now in the teasury, which
appree,tes about s5,OooOOo par value, the
annual addition Of refunding mortgage
bonds Of $4,000 It'll 1919 or the sale OF
debentures"