New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1916-09-17
BRITISH VIEWS
OF |. NJ. vi. co.
English Holdings of Pre-
ferred Stock Parted
with Too Soon.

Both "The Economist" and the
S,atist." of London, in recent issues
carry long articles on the transition 81
the International Mercantile Marine
Company from a condition at the be-
ginning Of the war OF being unable TO
meet the interest on its bonds 10 its
present position of unprecedented az
fluence.
THE Economist" recalls dolefully
that the British holdings of the pre-
ferred and common stock have been
sold in large quantities to American
buyers at much lower prices than are
now current. and adds:
Former holders in Europe must watch
with melancholy interest tine great advance
in the value Of their old securities The
history of the company during the last two
years. its sudden change from insolvency
TO high prosperity, forms an extraordinary
episode. and now, instead OF the property
passing into the hands of the bondholders.
il is proposed 10 pay 43 per cent Of the
bonds in cash. and leave the preferred and
common stock with smaller amount OF
prior charges ahead of them. They are no
longer to lose, but 20 gain, by the reor-
ganization.
After reviewing the first readJust-
ment plan that was presented by the
bondholders, the following comment is
made on the stockholders plan now
approved:
To carry the transaction through the
company will create new issue OF SON.
600, 200 per cent bonds OF which slo.ooo'-
600 are to be held in reserve and s+0.OOV'-
600 are to 20 10 the old bondholders. The
cash. it is anticipated. will be met out Of
funds in hand. and even after the payment
is allowed for the company will probably
have over S23. 600 600 o. cash at the begin
ming Of next month. That is the kind Of
reconstruction 20 commend itself to any
stockhkolder. How greatly it differs from
both the original capital scheme and from
last years Encouragement can be seen from
the following table. which gives the charges
ahead OF the stockholders - under the old
capitalization. o. under the 1915 scheme
and 80 under the present scheme:
PRIOR CHARGES.
Original capitalization. s3,42o.ooo
Scheme Of l9i5......... 373o.ooo
Present scheme ......... 100000
Thus. The stockholders who last year
were to allow the prior charges 20 be in
creased by 100000 are under this pro-
posal 20 have them reduced by Sl.00o.o0o.
and who last year We're TO part with 80
per cent Of the available profits are under
this proposal TO retain all the profits after
payment of reduced prior charges.
"The Statist," after calling attention
to the transformation brought about
in the condition of the International
Mercantile Marine Company by the war
conditions, makes this criticism of the
proposed plan of readjustment:
II will be recognized that the present
plan does not in any way tackle the ques-
ton as TO the overcaptalization Of the
company in comparison with the normal
earnings that may be expected when
freights return 10 a more moderate basis,
and this Is undoubtedly a question that
will have 10 be faced in the not distant
future. but with the bond question settled
the directors will be able 70 devote all
their attention to the further problem that
awaits them.