The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-28
TROUBLE ENDING FOR
COSTLY GOULD LINE
Wabash Pittsburg Terminal
Reorganization Plan Cuts
capitalization.
BRIGHT PROSPECT AHEAD

Reorganization of the wabash Pitts
burg Terminal Railway Company. the
second OF the bankrupt Gould Eastern
lines to begin rehabilitation this year.
starts formally to-day with the publ
cation of the plan. Restoration OF this
road to its first mortgage b%ondholders,
who are to be It's owners through stock
control, promises to end It's long chapter
of difficulties.
The building OF this railroad. sixty
miles long, cost more than $500 900 a
mile In actual money and more thar
$500, 900 a mile in par of capitalization.
It Ia probably the most conspicuously
expensive line in the country. The line
was built so that the Goulds could enter
Pittsburg and try to take the Carnegie
steel business away from the Pennsyl-
vania Railroad.
The company IL to pass out OF the
hands of the receiver. who has held
II for more than seven years, II the
plan is adopted. with its capitalization
reduced s46,559.477. or more than half
OF the old. The reorganized basis Will
he s4i,7Oo,sss Of securities in the hands
of the public.
Receiver ON Lines Future.
The future under the new plan OF this
Intended connecting link Of the proposed
Gould transcontinental system Is thus
described by Receiver II. +. Baker in a
letter to the reorganization committee:
Il believe the prospects for the future
are bright and hat with the owners In
control OF their property. the hxed In
terest charges eliminated TO the extent
provided BY the plan. the properties
under normal business conditions and
with competent management will make
a much better showing than Is possible
under any receivership. The cost to-
day OF putting together an enterprise
with properties similar to those To be
acquired by the reorganized company
would not be less tina $40. 600. 900. and
might exceed that figure BY a large
amount
The value o. the property, in the opin-
ion OF the receiver. lies In its real
estate holdings in Pittsburg and its
tracks connecting with the steel and
iron industry there and also It's coal
land holdings. with undeveloped coal
estimated close to 100. 900. 900 ton
The new company will have no
bonded Indebtedness with the exception
OF s5.I00,s6s OF underlying mortgages
that will not be disturbed. It's fixed
charges therefore will be only s26l.103
annually. a cut OF s2,522, 149 from the
old basis. On the new basis the com
pary would have earned IL surplus OF
s5l3.1T2 In the year ended on June 80.
1914. and ss5,155 in the year that will
close on June 80.
$4,000 o surplus In First Year.
Tho earnings for the year l9l4-15
as estimated" says Receiver Baker.
form no standard for Judging the earn
ing power OF h property. The gem
"ral business condition II prostration
of the coal business In particular are
mainly responsible for the shrinkage in
the income. Estimates OF future earn
ings should be based on the earning.
OF the year ended June 30. 1914. AS
uming average business conditions. the
provision OF adequate equipment and the
use OF money provided by the reor-
! am OF the opinion that
under competent management the new
company for the first fiscal year should
snow surplus earnings OF at least $3.50
wv i Delieve these earnings under
similar conditions should show a nor
mai Increase in the future. and under
favorable conditions and developments
nay show a large increase In the COM
paratively near future"
The $50. 236, 900 first mortgage bond
holders get the property by payment OF
a 3O per cent. assessment. which will
raise Ss,0IO.sO0 new capital. They get
Tor this 80 per cent. OF their holdings
In new preferred stock, which will
mount TO &9.070.S0o. and 10 per cent.
In new totalling $40. ESQ., 900.
practically all there Is of each. In
addition they are to get the 81 per
cent, stock control Of the Wheeling and
Lake Erie, now held by the Terminal
company. through a distribution TO each
$1,000 bond Of $2s In Wheeling first pre-.
ferred. $40 In second preferred and
1890 In common.
The bondholders are to vote on
whether they wish to continue this
control OF Wheeling through a voting
trust or not. The proposed voting
trustees are Willard V. King. Morgan
J. O'Brien and S. Davies Warfleld. II
a majority of the subscribing b%ondhold-
ers TO h assessment approve the vpt-
ing trust plan by September 1 1t will
become operative.
The SEQ. 00O. 900 second mortgage bond
holders participate In the r%eorsaniza-
tion only to the extent that the first
mortgage bondholders do not exercise
their rights.
The chairman OF tho reorganization