The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-07-09
MISSOURI PACIFIC
B~ONDHOLDERS BALK
Object to Exchange Undcrly-
ing Issues for New Sc
curitipS.
TOLD 1T Is BEST CHANCE

Missouri Pacific stock declined yester-
day to az. the lowest point In its his
tory. IN sales by holders who were un-
able to pay the $50 assessment and were
taking what they could get for the stock.
Criticism Of the plan in the financial dis
trict centred in the proposals for the
exchange of underlying issues for the
new first and %refunding ) per cent
bonds.
Holders OF the consolidated first 6s.
mature in 1920. and the collateral trust
81 OF 1917. expressed dissatisfaction
with the plan on the ground that II
should have provided for the payment OF
their securities In cash either at the
present time or at their maturity. leav-
In them undisturbed until then. Il,
was ureed that the risk OF depreciation
In the value OF the new ~refunding bonds
should not be imposed on the holders Of
underlying obligations soon to mature.
There was an inclination among some
holders OF the bonds to remain out OF
the plan and depend on foreclosure for
better treatment.
The answer OF those associated In the
reorganization plan to the bondholders
was that no better treatment could he
expected II the matter went to the courts
for settlement through receivershlp. II
was held that the day had passed when
the holder OF the mortgage bond of a
great railroad system could expect TO get
the property upon which his bonds were
based through foreclosure without con-
cessions to associated interests. The
courts. IL was said. have consistently
held in great railroad reorganiZations
that the public interest required the
Keeping OF a railroad property intact.
To secure this. 1t was added. com
promises and concessions were necessary
among the security holders.
In addition II was held II was I'M
reasonable to expect that the Missouri
Pacific I'm r~eorganizing could immedi-
ately sell In the public market $40. 0OO.-
600 to $40 0O. 900 OF is new %refunding
bonds at reasonable prices in order to
pay on some of the underlying bonds In
cash, Such inability was not thought
TO be n reflection on this new bond as n
credit instrument. for II was held by
the reorganizers that this bond on Its
merits should sell at 90 upon issue. and
two or four years after reorganization
should sell at close TO par.
Treatment OF various issues OF di-
49, 'iihF /" ''' '''lA ist tNll
plan was largely based on the strategical
importance OF the lines TO the main
system and their earning ability. Thus
the $500 600 first mortgage bonds of the
Nerdieris Valley. Independence and
Western remain undis,urbed in the reor-
Ganization. while the 100000 frs, mort
gage bonds OF the Leroy and cauey
Valley Railroad. which parallels the
other. are asked to take par value OF
their holdings In new preferred stock.
The reason, as given by the reorganiz-
ers, is hat the first is important 10
the system by reason OF favorable
grades m other conditions. high traffic
density and high development. The sec
ond, through ~unfavorable location. has a
limited development and traffic. as prac-
tically all Of the business of the system
In the territory passes over the other
line.
II Is further argued by the reorgan-
izers that II the holders of the securi-
ties of divisional lines refused the reor-
Eanization offer and took their property
they would have to bear the heavy ex-
pense OF improvements without The ad
vantage OF consolidated operation.