The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1922-12-05
CREDIT WILL Be IMPROVED
Both Capitalization and Fixed
Charges To Be Reduced.
New Company Will Be Known
as Observation-Disclosures.
(By the Associated PressJ

Washington, Dec. 5.-ReorganiZa-
tion plans Tor the Missouri, Kansas &
Texas railroad which has been in re-
Ownership for several years. were ap-
proved today by the interstate COM
1nerce commission. The new COM
pany authorized to acquire all of the
railroad lines and terminal properties
of the old system, will have total
stock and bond issues with par value
of 1886, 100000 and 100000 shares
of common stock without par value.
Its annual fixed interest charges Will
amount to $5,4S3.O00. The commits
sion calculated that the total capital
ization of the old company was S24S.
176,O00O, while its annual fixed
charges had been $7,1S3,0OO.
The reorganization Will srNrt the
new Missouri. Kansas & Texas rail-
road in operation with capital liabili-
ties of 6,476. COOLIES than those car
ried by its predecessor, and annual in
1erest charges less than those OF the
former corporation. by S1,4OO,OOO-
Earnings of the Missouri, Kansas q
Texas for the last eighteen months
the commission said, have been sum-
cfent to meet the total annual bond
interest and other fixed charges as the
reorganization will leave them. Most
Of the securities which the new COM
pany is permitted to issue VIII pc eX-
Changed for securities of the old COM
pany 10 finance the reorganization as
sessments of SIS per share to be levied
O. ne common stock of the old COM
any and $50 per share on the pie
ferred stock. which assessments are
expected to raise about S1S.42O,OO0 in
cash. the commission said
The payers of the assessment viii
receive shares OF the common stock
IN the new company which stock VIII
have voting privileges sufficient TO
control the new organization.
Capitalization Lower.
1.-THE new capitalization Will be sub
49,. l. hon hn
liabilities of the present Missouri
Kansas & Texas system" the commls-
sion said. "and the fixed charges Will
be materially reduced. with a cohse-
ouent Improvement in credit The evil
dence also indicates that the new capt.
talization will not be disproportionate
10 the earnings of the applicant Under
these circumstances in view OIL the
manifest desirability of ending the
long period of receivership. we THINK
that the approval of the proposed
Capitalization should not be wlthheld-
commissioner Eastman dissented
from the majority opinion on the
ground that the commission should
have a general policy laid down FOL
the REORGANIZATION of companies In
receivership and that this policy
should not allow a new company TO De
organized to take over any insolvent
railroad system, when bond issues in
excess of one-half the property in
vestment were created by the reor-
ganizatiOn-
Branch Lines Not Included.
While all of the property of the new
Missouri, Kansas & Texas is acquired
from the holdings of the old system, a
number of lines, chiefly branches, IN
Texas and Oklahoma, which the OLD
company operated, will not go into the
new system. The commission gave no
fice that its approval of the reor-
was not to be construed as
granting authority for the abandon
ment of these lines. Most of them, II
was indicated, would be acquired by
other railroads or persons and would
be continued in operation.