The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1930-10-02
DRAW UP PLAN
TO REFINANCE
STREET CARS
Nationally Known Utility
Bankers Would Be Named
as Managers.
INFERIOR SERVICE CITE
Trackage Is Worn Out am
Equipment Is Obsolete,
Survey Shows.

Financial rehabilitation Of the
Indianapolis Street Railway Com
pany, which on April Is went into
the hands of a receiver, George c.
Forrey Jr., president of the Fetch
er American Company. is provided
in a plan of reorganization COM
pleted by four committees of stock
holders and mailed today.
The plan provides for the ap-
pointment of Halsey, Stuart 81 Co.
national known utility bankers as
the reorganization manager and in
cludeS a resume of survey made
of the property by the Midland
United Company, an insult holding
organization.
This survey shows that, due TO in
ferior service and automobile COM
petition, there "haS been an alarm
ing decrease in traffic and in reve-
nue. in recent years and that the
bonded Indebtedness of the COM
pany Is SO large that it absorbS the
money necessary for adequate main
tenance."
Trackage Worn Out
Twenty per cent of the trackage
is completely worn out, the survey
reveals. The remainder will require
extensive repairs and replacement.
OF the AL street cars owned, 100
are compltely obsolete. OF the re-
mainder, 331 are obsolete in types,
expensive to operate, slow and I'M
suitable for modern transportation.
Only twenty-one of the motor
coaches operated by the company
and It's subsidiary are in good con-
dition. Sixty-nine must be replaced.
In order to put the transportation
system in an up to date condition,
the following plan is proposed:
In readjustment of securities and
obligations the total capitalization,
exclusive of $685. 900 for rehabilita-
ton, will be reduced from $1,000
900 TO $12,211,16
Issue New Securities
New capital then will be pro-
vided by the issuance and sale of
securities in the amount of ap-
proxilnately $9,935,033.
In addition to the new securities
to be traded for the old, all stock
holders and creditors will be given
an opportunity to purchase common
stock of the new company.
To insure the necessary fiUds for
the required rehabilitation the Mid
land United has agreed to under
write the $5,503,033 of shares and
the remainder of the new money
will be obtained from the issuance
of $2,200,000 of new first mortgage
bonds and $2,232,000 Of new car trust
notes as needed.
Two Companies Planned
To effect the reorganization, 'go
new corporations are to be org J.
lied. One is to be known as We
Indianapolis Railways, Inc, and Il
other is the Traction Terminal Cor
poration, which will acquire the
Terminal building adm adjacent real
estate.
Proposed securities are: Indian
apolis Railways, Inc, $2,200,000 in
first mortgage bonds, none Of which
are to be exchanged for stock of the
old companies; minimum of $4,-
618,50 in thirty-five-year per cent
gold debentures, which will be used
in the exchange for Indianapolis
Street Railway Company securities;
$2,232,00 in car trust notes, viii \
will be a lien on the rolling stock to
be acquired by the new company;
100000 shares of $3.50 prior pre-
ferred stock of no par value, paying
$3.50 annually to the holders, and
redeemable at any time that the.
company sees fit for $55 share, plus
an amount equal to al unpaid cumu-
lative dividends; 100000 shares of
SO convertible preferred stock, en-
titling the holder to receive So
year, redeemable at $50 share at
any time that the management
thinks it advisable; 10000 shares OF
common stock.
Give Stock Rights
The railway will issue Assessment
warrants A." which will entitle the
holder, within two months after
OPCAd OCeAA4y W pun N4AeloC GAOCho
of stock in the new company for $50,
each block consisting Of one share
of prior preferred stock, sixth oil
a share of convertible prcferreo
stock and five-sixths of a share OF
common stock; assessment war
rants B." which will entitle the
holder to purchase a specified num-
Der of blocks of stock at $50 block
including one share Of prior pre-
ferred stock, and at the option 0.
the holder, either third Of a share
Of the convertible preferred stock
and a third of a share Of common
stock or two-thirds of a share Of
common stock within two MONTH
after the company begins operations 4
The manner and rate of ex-
change of stock in the old companie :
which comprised the Indianapoli
Street Railway Company is detaile.
in the printed copies Of the pls
l. IL