The Birmingham age-herald., 1923-10-07
WILL TAKE UP
 S4,60l,0OO OF ITS 6% BONDS
Receivers Ask Permission Of Court To Default On Interest Due November l To Use
 Money For Other Purposes IMMEDIATE OUTLAWS ON SERVICE COST $3,650,0O0 New Expenditures To Be
 Made Before Next July Will
 Require About $1,000,000
 More Than Will Be Available

MUlG G lldlt HViIl DC AVdIldDiC
 Adjusting finances of the Birming- ham Railway. Light and Power com pany. as first big step in that or ganizations emergence from the re- ceivership, will be given hearing Oc- tober 30 in the federal court before Judge W. I. Grubb, In conn
 the receivers petition alt the payment of interest C >e six per cent bonds due Novem' 1. Company and receivership obligations amount ing to $1,975 900 due betw Septem-
 Der l, 1923 and Puly ?, 1924, and other financial matters will be discussed at the hearing. Making satisfactory arrangements in these matters is con- sfdered the first definite move toward reorganization.
 AS g result of the jitney election. which has made effective the con- tract between the receivers of the Birmingham Railway. Light and Power company and the city. a prompt reorganization of the company is practically assured. Arrangements have been made to take up the conl- pany's s4,601, 900 of 6-per cent bonds at par and interest. The receivers have already contracted to spend
 s600,000 for new cars and other im- provements directly provided for by
 
 S100,000 additional for extensions and
 betterments contemplated by the agreement. They also plan expendi- ture for improvements and better ments, renewals and replacements on
 the property in excess of S1,000,000
 within the near future.
 This Is disclosed in the petition
 filed by Lee c. Bradley and J. $. Pevear, co-receiVers. in the federal court Saturday, for authority to de- | fault In the payment of the interest
 on the e-per cent bonds due Novem- l Der 1.
 BondhOIderS Organize.
 At the same time the petition was filed, announcement Was made that a committee for the 6-per cent bond holders has been organized and has
 called for deposits of the bonds nn before October 30. The comm4e.>e c an nounces that it holds a contract to sell the bonds deposited with 1t on or before May l, 1924, If the principal
 of the bonds Is due, at price to yield to those who deposit their bonds. the entire principal amount of the bonds and interest from May 1, 1928, to the | date of purchase, provided not less
 than 60 per cent of the outstanding 6-per cent bonds are deposited with
 the committed. If this sale Is made, | the committee points out that 1t will
 Involve no expense upo the deposit ! ing bondholders.
 Members Of Committee.
 The members of the bondholders committee are L. Carroll Root vice
 president of Newman, Saunders &s Co.,, of New Orleans; chairman. J. F. But Ter. president of the Canal-Cotnmer- cial Trust and Savings bank of New Orleans; oscar Wells, president of the
 First National bank of Birmingham;
 B. B. Veech, president of the United States Trust company of Louisville. Ky, and Arthur V. Morton, vice
 president of the Pennsylvania Com pany' for Insurance on Lives and Granting Annuities, of P'i' a, Pa. The secretary of the committee is
 H. L. Falk of New Orleans, nd it's counsel is Powell c. Groner of New York.
 Bonds may be deposited either With the Central Union Trust company of New York, 80 Broadway. New York, or with any of its agents the First National bank of Birmingham, the Canal Commercial Trust and Savings 1 bank of New Orleans. United States Trust company of Louisville.s or the Pennsylvania Company for Insurance on Lives and Granting of Annuities | of Philadelphia, which will issue de- | poslt receipts for all bonds deposited. e o q
 statement or heceIVers.
 The petition shows about s1.975.0OO | of maturing company and receiver ship obligations due between Sep tember 1, 1929. and July ?, 1924: s60O,- 900 contracted to be spent as A a.
 rect result of the city agreement; | $110, ,000 proposed to be spent Tn addi-
 tion as a result of the city agree
 ment. and about s1,075,000 proposed
 to be spent during this period on a | program of improvement to the prop | critics. This shows a total amotnt of uecescsary eXpend lures and expen- | ditures with view to rendering sat- ! isfactory service, of nearly S3.650.0OO.
 The receivers estimate that this pro gram through July 2, 1924, will re-
 quire almost S1,000.000 more cash
 than that expected to be available in this period.
 The receivers propose to meet this 1 deficiency by default in the per
 ent bond interest due November and extensions of other obligations. ! if such extensions can be arranged. but point out that if the deficiency is met by the extension Of other obli- gations. the receivershfp might con-
 tinue indefinitely. They state in the
 "etition, that if a default is made and the per cent bonds are made pay- | able in full, they are advised that prompt steps will be taken to reor-
 ganize the properties and that the | payment of the Ter cent bonds will
 make this possible. Such default 1 will in no way affect the Birming- ham Railway and Electric company underlying ponds, which will become ] due July 2, 1924, or the Birmingham Railway, Light and Power company
 4 1s per cent bonds, of which there
 are now outstanding in the hands of
 the public sS,720,o0o. The receivers
 point out that in no event should there be a default in the Az per cent
 bonds, as they would require in auy reorganization the raising Of SS,12d 900 cash with which to pay them off,
 and probably involve payment of much higher rate of interest OH this
 amount in the future.
 This is the first definite step to-
 ward a reorganization. and 1t is b.
 lieved that if the court permits the
 default and the 6 per cent bonds arc
 made payable at par and interest tine
 properties will he reorganized wita-
 out delay.
 Details O. plans for reorganization rAf at,stE Ef lvx