Elko independent. [volume] (Elko, Nev.) 1915-current, 1916-01-18
WESTERN PACIFIC
REORGANIZATION
@. & R. G. to Lose Its Holdings of
Second Mortgage Bonds.

The plans which are being worked
out for the reorganization of the West
ern Pacific and the lifting of the re-
ceivership were given in the Boston
News Bureau of January 8. The Den.
yer Rio Grande will lose all money
" advanced to the Western Pacific,
its holdings OF second mortgage bonds
ma the unpaid interest on the bonds
which ii guaranteed. Only first mort
gage bonds will have a voice in the
reorganization, and as the banking
house of Kuhn, Loeb G. Co. and inter
ests friendly to the Missouri Pacific
are said to have control of the first
mortgage bonds the road will prabably
pass under the control of those inter
ests.
The plan outlined by the Boston
News Bureau is set out in the follow.
ing item from it:
The proposed reorganization plan
OF the Western Pacific Railway. In
which E. H. Rollins G. Sons of Boston
will participate, is unique among rail-
road. congratulations. II is written en-.
tirely in the interest of the $4,000. 600
first mortgage bonds and although the
road cost over $S4,O0O,OOO 10 build. all
securities underlying the first mort
gage are wiped from the slate. Den
YER & Rio Grande's investment in the
Western Pacific is represented in
round figures by a debt of $55,5O0,O00
including 25,O00,O00 second mortgage
bonds, $17.500.000 moneys advanced
and $13,OO0,O0O unpaid interest. This
entire debt, together with Denver's
ownership of fivc-sixths OF the SIS, ,0O0,-
600 Western Pacific stock, is offered
by the reorganization. On the other
hand the obligations of the Denver
company to Western Pacific company
for nonfuifillment of guarantee,
amounting to $30.EoO,O0O will be dis.
charged by foreclosure sale of the lat.
ter road.
The plan contemplates the organiza.
ton of an operating company to take
over the existing company. The op.
Grating company will have $50,000,0
first mortgage bonds authorized, of
which $20.000000 will be Immediately
issued; also s27,5O0,O0O s per cent non
cumulative preferred stock and SAT,
100000 common. All of the stock will
pass into the ownership of the pro.
posed holding company which will IL.
self issue 100000 6 per cent comu-
lative preferred and $47,5OO,0O0 com.
mon.
Holders OF the Western Pacific 5s
are offered the following securities for
each $1,000 bond, accompanied by the
payment of 1850 cash.
New bonds at 80. $500: holding
company preferred stock, $3.50; hold
ing company common stock, $3.50.
"In the event a bondholder desires
to put UP no cash he will receive for
each $1,000 bond $500 of new preferred
and $3.50 of new common, but no
bonds. An unusual feature OF the plan
is that the underwriting syndicate,
which receives fee of 2 per cent on
the S20,000.0O0 bond issue for their
services, will lend depositing bond.
holders 80 per cent Of their subscrip.
tion for year at per cent. with the
securities as collateral.
"The entire cash requirements OF
the plan are s1s,6S0,000, of which the
new bonds will produce $1S,000,000:
the balance will represent cash on
hand March ], 1916. The new money
will be devoted to the following pur-
poses: For feeders, S10,506,250: new
equipment. s3,514,0OO; betterments,
S2,579,750, and for reorganization ex.
penses, $2,0O0,O00
Upon the basis of traffic now car.
rled by the Western Pacific, the pro.
posed expenditures for new equipment
and for betterments Of existing facili.
ties should, in the opinion OF the re-
organization committee, so increase
the net earnings of the company that
they will amply provide for the inter.
est to accrue upon the $4,000. 900 new
bonds. The Equitable Trust company
Of New York, Blair e. Co. William
Solomon & Co. and u. II. Rollins &
Sons compose the underwriting syn
dicate."