New-York tribune., 1921-05-22
Final Approval
Given Reading,
Reorganization
Federal District Court at
Philadelphia Grant $
Equal Rights 10 Ssockl,old-
ers in New Corporations
Jersey Line Disposed OF
Ordered Placed i'm Hands
of Trustees Until Time
Is Favorable for Sale

PHILADELPHIA, May 21.-Complete
approval of the modified plan for the
segregation of the Reading companies,
decreed by the United States Supreme
Court, was given to-day by the Federal
district court here, and disposes finally
Of all questions in the complicated uns
scrambling of the properties controlled
rsysthe Reading Company, holding con-
cern, unless some one takes an appeal
fer review to the Supreme Court.
The two big points decided by the
court were:
Equal rights are given to the common
and preferred stockholders in receiving
the stock of the new corporation to be
formed to take over the Reading Com
pany's equity in the Philadelphia and
Reading Coal and Iron Company.
Placing the majority stock of the
New Jersey Central Railroad, owned
by the Reading Company, in the hands
of trustee or trustees, to be appointed,
until a favorable time arrives for its
sale. thus removing it from the control
of the Reading Company pending final
disposal.
To Submit Form of Decree
The court ordered the Reading Com
pany and the government to submit
within fifteen days a form of decree
embodying the points approved by the
court
Under the dissolution plan. Judge
Burlington holds the Reading Company
IS not distributing a dividend or earn
ings, but is disposing of the capital as
sets of the coal company, which the
Supreme Court had declared it could
no longer lawfully hold.
at is now disposed of" said the
court, sin substantially the same way
as the law would dispose of the prop
erty of that company were it being dis
solved, and in that connection We deem
it proper to say that, under the facts
and circumstances before us, the legal
question of dividend distribution be-
tween the different classes of stockhold-
ers is not here involved, and on that
question we express no present opinion,
for the simple reason that we are not
dividing profits or earnings"
Disposal of Jersey Central Stock
With regard to the disposal of the
Jersey Central stock, the only differ
ence between the Reading Company
and the government was the question
of what amount of time should be
given for its sale. The Reading Com
panY cOnISUQeQ 1t SflOulu DS HSl0 ny d
trustee until after the Interstate Com
merce Commission had completed its
plan of consolidating railroads, and
that the value of the stock should not
be subjected to q possible sacrifice.
The Attorney General wanted time
limit fixed for the sale of the stock.
The Court was of the opinion that
because of the provisions of the trans
portation act there is no prospective
purchaser of the Jersey Central stock
at fair price, and so long as the
control of the voting power of this
stock is taken from the Reading Com
pany and lodged with trustee, there
is full compliance with the mandate of
the Supreme Court. The court also
said there is no goodsreason why the
court should subject the stock to the
possible sacrifice OF forced sale.
The court decided that the actual
sale of the Jersey Central stock shall
be placed in the hands of trustee and
the sale deferred conditionally.