Imperial Valley press., 1926-11-22

PAID FOR
PROPERTY
Sale Is Made at Public
Auction Following Or
der from Court.
w ILL REORGANIZE
Plans Call For Complete
REIMBURSEMENT of Roads
Finances.
By United Press Leased Wire

By Inited Press Leased Wire
BUTTE. Mont. Nov. - The
Chicago. Milwaukee and ST. Paul
railway today was sold at public
auction to Robert T. SWANS and
Donald {. Swaziland, representing
the reorganization managers. Kuhn.
Loeb and company, and the Ma
tional City company of New York
for $40, 100000.
Immediately after the property was
struck off to them. the bidders as
signed their bid to the Chicago. Mil
waukee and Pacific railroad com
pany. by which name the company
will hereafter be known.
Reorganization of the system and
lifting of the rcccivership which be
galy March IS, 1925, was forcsecn as
the result of the sale.
A reorganization plan. designed ia
effect complete financial rehabilita
tion of the road, was submitted for
court approval simultaneously with
the sale.
The Chicago, Milwaukee and st.
Paul railroad. rcputed To be one of
the most progressive in the country
because of its famous electrified
line through the Rocky Mountains,
went into bankruptcy March Is,
1925. The crisis in the road : fin
anciHl affairs came after the road
built its transrontincntal line. went
through the disorganizino war pc
riod. spent huge sums in elcetrifica
tion and then faced decreased rev
enueS because of Panama competi
ti0n.
The new reorganl2at tion plan pro
posed by Kuhn Loeb, National City
combination, calls for a read iustmcnt
of the road 5 whole financial strue,
turc which the hackers claim will
affect the complete financial rchab
ilitation of the road.
Plan Outlined @
This plan included:
IA net reduction in the amount
Of fixed interest bearing securities
of more than 1927 100000 and II net
reduction of annual fixed interest
charges on the funded debt from
about $2l 100000 to less than $li,
O00, 900.
Funding of more than $lS5,-
100000 of obligations maturing in
the next 10 wears into long term oh
legations. interest charges of more
than $l30,000,000 of which Will he
contingent upon earnings.
3-ProViSion for raising by as
seSSments of approximately $4,000,
600 in cash. of which 100000 is
to be set aside as working capital.
4-RcleaSe of SlS,000,O0O of gen
cral mortgage bonds now pledged to
secure notes held by the federal
government
Immediate adjustment of the rail-
ways debt Of approximately 500,
00O. 900 20 the government Is con
tcmplated, $35,000,000 to be paid to
the secretary of the treasury aud
$2O,OO0,000 due the director general
of railroads. The latter sum will be
settled with payment of SlI, ,OoQ,'
00U cash, $3,0O0,000 in preferred
stock of the rcorgaui2ed company
plus approximately S2,500,00o IN
interest to be delivered to the goN.
ernmcnt in liquidation Of the debt.
The S70,00O,000 cash requirements
to effect the reorganization viii he
met by payments Of S2S per share
by holders fo the Sll5,93L900 exist.
ing preferred stock and of So per
share by holders of Sll7,ill,@0u
existing common stock for which
only $lO6, ,SSS, $50, $50 of new bonds
will be issued
For each share of preferred stock
the holder viii receive S24 principal
amount of new 80 year five per cent
gold mortgage bonds aud ono share
of new preferred stock. pcpositors
Of common stock will receive t2S
principal amount of new 80 year five
yer per cent gold mortgage bonds
and one share of the new common
stock.
The net assessment amounts 10
approximately 80 per share, accord
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