Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-09-10
financial STATUS
Of VIVA RAIL WAY
Officials Admit Many ObIiga.
Observation-Disclosures
Propositions.
BY 1. A. FLAMING.

The real condition of the WASHING
ton-Virginia Railway COMPANY is dis
crossed this mornin & in a circular let
Ter signed by Nor NAL Grey, president
OF the corporation, and addressed to
the preferred ard common sharehold-
ers OF the corporation, in which he
submitted the proposition of the note
holders committee.
Here are the facts as contained in
the letter:
me company has outstanding ST.
sou,ooo OF so notes. due January 1.
lszs, secured by a deposit of $4,000
ooo OF SO bonds, being all the bonds
ISSUED under general mortgage COW
erins, all the property of the company,
ana subject to underlying liens
90. -Four company is unable to pay
Se'A 500 of coupons on bonds secured
Underlying mortgages on its prop
Tty, the extended term for payment
having expired July l. 1920. and is
also unable to provide for the pay
ment of similar amount of coupons
Is s2o sA'a bonds maturing September J.
1t is unable to pay coupons APP
proXimating $4,000 on the above
mentioned note issue of July l. 1920.
1t is unable to pay $4,000 of prin-
clpal and $4,000 Of accrued interest
due July 1. 1920. under car trust
agreement covering forty-nine new
cars which We're put in operation on
your property last spring.
1t is unable to pay accumulated
taxes in arrears amounting to $1,000
with the increase in rates effective
January Z, 1920, and the new equip
ment which was delivered May l,
1870. the earnings of your company
nave improved. The net earnings
period May July 81, 1920, have en-
ceeded all fixed charges for that
period.
Application has been made to the
Interstate Commerce Commission for
an increase in the company'S rates.
1t is anticipated that this will shortly
De granted, as the new rates would
still be below those allowed to steam
railroads and on par with other
lines operating in similar districts.
while the prospects for the future
OF the company are encouraging. its
present pressing debts must be liqui-
dated to avoid drastic proceedings by
the holders of the bonds or notes of
the company
Note Holders Proposition.
The noteholders' protective commit
tee, of which Howard S. Graham of
includes Joseph Wayne, jr; H W
Goodall, r Golden Doaldson. c. F.
Norment. w. F. Ham and Van Lear
Black, after considering the situa-
ton as they find it, have submit
ted the follow ing proposition. under
which the committee will lend its
financial assistance to help you in
working out your problems"
The committee will lend to your
company the sum of at least 100000.
a.
promissory note for the amount of the
loan, secured by an assignment to the
committee as collateral security of
the companys equity in its pledged
collateral its unnegotiated A and b
notes, and its claims for unpaid sub
scriptions to said notes, together with
delivery to the committee of such
uRpledged collateral as may be held
in the company's treasury.
The committee will discount de-
mand promissory note of Messrs
Grey, Church. Burke and Gilmore in
the sum of $4,000. the proceeds there
of to be used by them to take up
their subscription to eighty-four class
A notes, and to be secured by the de-
post of the notes so subscribed for.
company shall be increased in num-
Der from seven 60 to nine CD. and
Messrs. Graham, Donaldson. Black.
Booth and another, representatives of
our committee. shall be elected mem
hers thereof; Messrs. Grey, Church,
Gilmore and Burke retaining their
present position as directors
Howard S. Graham, chairman Of
our committee, shall be elected presi-
dent of the company, your present
preside Mr.. Grey. taxing the posi-
ton of vice president, and such other
onicers, employees and agents. inciud-
ing a secretary and treasurer, as may
be nominated by our committee. shall
be elected upon request
There shall be deposited with the
Guarantee Trust and. Safe Deposit
Company, Philadelphia, Pa. under the
terms of an option agreement, at
least 80 per cent of the, capital stock
of the company, the committee. how
ever, having the right to declare this
agreement operative upon the deposit
of a smaller amount of stock if in it's
Judgment such action seems advisable
a .orm of agreement satisfactory to
our committee covering such deposit
is herewith attached.
1.-THE above offer is contingent upon
your company giving prompt access
to your books to a representative of
the committee. so that proper exami-
nation of the same may be made, and
4lso contingent upon the report of
such representative being satisfactory
to this committee
M"If the above conditions, including
the deposit of stock, are not complied
with within thirty days from the date
hereof, or if there should be serious
change in the condition of the COM
rany prior to the carrying out of the
above. the committee reserves the
Night to withdraw this offer without
kotice."
W Deposit Agreement.
The deposit agreement calls for the
deposit of sufficient stock to satisfy
the committee by September "a. 1920;
stock so deposited must be accom-
panied by power of attorney execl Ted
In blank for transfer thereof, each
depositor agreeing to dispose of his
holdings to the committee or it's nom-
inee at $40 a share for the preferred
Satock and $3.50 a share for the com
mon. The option remains with the
Eeommittee of purchasing all of either
Kind of stock, or of all stock so de-
posted. but each depositor may with
draw not exceeding Is per cent of his
deposited stock, las will always re-
snit in there not being less than 81
uer cent of each class of stock at the
option of the committee" or the COM
nlittee may sell to any third party OF
PARTIES at any price in excess of the
ontion price, in which event the de-
nositor shall receive the option price
MUS rs per cent of any profit realized
sock may be deposited after the
limit date by consent OF the committee
y Railway Preferred Higher.
Evidently some people believe tina
fhe hah-cent increase IN the price o
Potomac Electric current will assur'
the declaration of the dividend on thu
Railway and Electric Company will
more or less permanency. for tn
Mnck advanced this morning from al
oDening at 47A to so. with no inter