Evening star., 1941-08-07
Plan 10 Reorganize !.
Wabash Sent Back
For Courts Decision
|. c. c. Approves Proposal
Giving Voting Control to
PENNSYLVANIA RoiIroud
BY the Associated Press.

BY the Associated Press.
The Wabash Railway Co. took a
big step forward today on its trip
through the receivership "wringer." +"
A plan of reorganization for the
Wabash, which would give the Penn
sylvania Railroad voting control, has
been approved by the Interstate
Commerce Commission, and now
goes back to the United States Dis
trict Court at st. Louis, which has
jurisdiction.
In approving the application of
the Pennsylvania Railroad and its
wholly owned subsidiary, the Penn
sylvania Co.. for authority to ac-
quire stock control of the reorgan-
lied Wabash, the I. c. c. called this
desirable from the standpoint of
an amalgamation of weak and
strong roads" The reorganized Wa
bash would be known as the Wa
bash Railroad Co., instead of the
Wabash Railway Co.
Owned $4,000 Shares.
The Pennsylvania Co. owned 312,-
900 shares of preferred stock and
$4,000 shares of common stock of
the Wabash Railway, which it ac-
quired in 1927 and 1928 at cost of
s63,04l, $40. This gave it 4893 per
cent of the two classes of stock COM
bined, but the reorganization plan
made no provision for participation
of present stockholders.
Describing the Pennsylvania ap-
plication as an important feature of
the reorganization plan, the I. c. C.
said termination of the receiverShip
under which those properties are
operated and placing them in con-
troll of company with reasonable
capital structure and with a definite
prospect of earning its fixed charges
are matters Of substantial public in
terest.
THE public also will be benefited
by the continuance of improved
transportation service inaugurated
by and between the two systems in
the past few years, and the definite
possibility that other Improvements
of a similar nature may reasonably
be expected in the future" the COM
mission added.
Lines Are Complementary.
THE lines of the Wabash are
naturally Complementary TO those
of the Pennsylvania and together
form a direct route from Kansas
City to the Eastern Seaboard, avoid
ing the congested terminal areas of
St. Louis and Chicago. Such a
route under co-ordinated arrange
ment is of particular importance at
the present time"
The new Wabash would have total
capitalization of 1872, ,795. with
annual requirements of S6,777 1896.
Of this S62 2.502 447 would be fixed
interest debt, with fixed charges to-
falling $2,5584l8 annually.
Undisturbed by the reorganization
would be S10,615. 900 of securities,
including sS,540,OOO of equipment
trust certificates, s2,025, 900 of Wab-
ash-St. Charles Bridge bonds and
$4,000 of Wabash-Hannibal Bridge
serial notes. A total of $l82, ,032, ,795
in new securities would be issued.
Common Stock in Escrow.
All the new securities are to be
allocated to bondholders and hold
ers of receivers certificates, except
1870 of non-par common stock to
be used in the payment of unsecured
claims.
All the new common stock would
be placed in escrow. All stock not
withdrawn within a specified time
would be subject to sale at sl2.75 a
share. Large holders of refunding
and general mortgage bonds have
signifed their intention to allow
their stock to remain in escrow sub
ject to sale to the Pennsylvania COM
pany.
The Pennsylvania company pro-
poses to buy all the common stock
of the new Wabash, but is willing
to take as little as 454,427 shares.
which would give it so per cent of all
the outstanding capital stock. 1t
would pay s7.626.871 for all the COM
mon, or $5,796, ,494 for the minimum
L. e