The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1935-08-30

A44S pldAl, SeIlG 10 the interstate
Commerce Commission, calls for a
consolidation of the Chicago, Rock
Island & Pacific Railway Co, the
st. Louis-San Francisco Railway
Co., and the Chicago & Eastern Hi
nois Railway Co. into one unified
system. The plan, first to be pro-
posed under the amended bankrupt
cy act as passed by Congress in the
closing days of the recent session,
is built upon the idea of effecting
this consolidation simultaneously
with reorganization.
Assets Near Billion
The proposed consolidation would
create a system with assets of
nearly billion dollars and operat-
ing nearly $4,000 miles of track. 1t
would create company with cap
italization of approximately $780,
100000 and a financial structure
adapted to existing railroad condi-
lions.
Under the plan, the Reconstruct
ton Finance Corp, Railroad Credit
Corp, and bank loans will be repaid
out of earnings within eight years,
and all underlying lien bonds, with
few exceptions, will be left undis-
turbed. First lien bondholders, gen.
orally speaking, will be asked to re-
schedule their maturities and in
some cases accept modification OF
interest payments. The small
amount of G. & E. I. equipment
trust notes will be assumed without
material modification, while the
similar issues Of Frisco and Rock
Island notes are to be funded into a
new series with the same coupon
rate and same aggregate amount of
equipment.
Sinking Fund Mandatory
A mandatory sinking fund is pro-
vided for the latter instead of spe-
cif1c schedules of maturitieS. This is
expected to retire Frisco and Rock
Island equipment trust notes in
about 10 years.
AS to junior lien bondholders the
consolidation plan anticipates the
creation of one new major mort
gage issue for the payment of the
greater part of them. Treatmant
of Junior lien bondholders is seen
as particularly liberal in view Of
the fact that stockholders will be
asked to raise $4,700,000 in new
money to effect the consolidation.
Unsecured obligations, such as the
Rock Island debenture 41as, will be
uniformly exchanged at par for new
preferred stock
Holders of both classes of Rock
Island preferred stock will get one
half share of new preferred and one
new $50 par common share upon
payment of $3.50 per share.
Stocks Share Equally
Holders of Rock Island common
will receive one new $50 par COM
mon share for one 500 par common
share now held upon payment of
$3.50 per share, participants to
receive an amount equivalent to
about $40 par value for every 500
par value now held.
Frisco preferred and common
stockholders share equally in the
plan, receiving half share of new
$50 par common for each old COM
mon share held, upon payment OF
$125 a share.
C. & E. I. preferred stockholders
will receive half a share of new
$50 par common with no payment
required and another half share
upon the payment of $1.25 for each
such half share. c. & E. I. common
stockholders will receive half
share of new $50 par value COM
mon for each share held upon pay
ment of $1.25 share.
capitalization of the new COM
pany is set up as follows:
Mortgage Bonds:
Underlying Liens .......... Sl19 QUO UOU
Junior Liens .'.'.''. ozo'OUU'OVVOo
Eouinn1ent Trust Notes ...... Al 600 600