New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1915-02-28
TO DEFAULT ON
WEST. PAC. BONDS
If Receiver Is Sought
Counsel Says 1t Will Be
by Friendly Interests.

II was officially announced yesterday
that the semi-annual interest due to-
morrow on the S5C,0OOOOO first mort
gage 8 per cent bonds Of the Western
Pacific Railway, guaranteed by the
Denver & Rio Graudc, will not be paid
Thomas L. Chadbournc, special cOun.
eel for the latter road, who made the
announcement, would not say whether
this action would mean receivershiT
for the Western Pacific, but he stated
that II such a course were taken il
would he friendly proceeding by The
\ largest holders Of the bonds. Mr.
u ChAdbourne's formal statement fol
lows:
at has been found impossible by
the Western Pacific Railway Company
or the Denver q Rio Grande Railroad
Company 20 meet tho semi-annua
interest upon the former company
first mortgage bonds, due on Monday
March l.
"The board Of directors Of the Den.
yer & Rio Grande Railroad Company
has for number of days been in con
ference with representatives Of the
largest bondholding interests. These
conference have now reached n poin,
at which every one feels confident that
harmonious outcome Is practically
assured. A concrete plan is in course
OF preparation, and will be announced
as soon as u has been approved by all
the interests that have been in con
ference, probably early next wees"
III Il IL.
which the interest is about 20 be dc,
faulted, an official Of the company said
are widely distributed, there being be.
tween 500 and 1000 holders. About
20 per cent are held in California, q
considerable portion are owned abroad
some are held in 81. Louis, but the
majority arc in the possession Of resi-
dents Of this state. For this reason
81 is believed that If n receivershir
IS sought the petition will be filed here
Every effort will be made by the Of
flcials OF the company 10 fOreStall any
unfriendly action in the courts. The
large bondholders, these officials said
were in sympathy with the plan of re-
adjustment 10 be announced this week
and for this reason they would oppose
any attempt 20 Illustrate the company's
plans, which, 70 Is understood. Will in
eludc scaling down the first mortgage
bonds. A call for deposit Of the bonds
will probably be contained in the an
nouncement Of the plan.
The Western Pacific bonds were IN
derwritten in 1905 by william A. Read
& Co, Blair & Co. and William Salo-
mon & Co. The inability OF the West
ern Pacific 20 meet directly its matur-
ing interest obligation and the unwill-
ingness Of the Denver & Rio Grsnde
10 provide further funds for this pur-
pose have been due 90 the poor earn
ings of both companies. The former
for the six months ended December 81
last showed a loss in net earnings Of
S2lq, 73i and the latter a decrease OF
s2OO, 63s In surplus after fixed charges
FOR the same period.
Through It's guarantee OF interest on
the S5O, 000. 900 first mortgage bonds Of
the Western Pacific the Denver & Rio
Grande incurred q loss Of nearly ST.
200 900 in 1918, the net earnings OF
the former having been insufficient by
hat amount 20 pay this interest. IL
|. not expected. however. that "A re-
ownership for this company would fol.
ow such possible action in behalf OF
he Western Pacific.