Evening star., 1951-11-30
Assured Profits Cited
In Missouri Pacific's
Reorganization Move

A director and longtime bond
holder in the Missouri Pacific
Railroad Co. said today the sys-
tenn has an assured earning level
far above the average for the
United States rail industry.
The director, John NJ. Ballet of
Appleton, Wis, expressed his COM
plete confidence in the lines flu
ture at an Interstate Commerce
Commission hearing into reorgan-
ization of the company.
Mr., Ballet urged that the latest
plan of reorganization, approved
in l949. be re-examined to give
the first and refunding mortgage
bondholders full payment of their
claims against the system either
In cash. or in securities equivalent
to those now held. He objected
to settlement which would in
clude new bonds Of lesser value.
To press this view, he reported
his recent organization of a COM
mittee of first mortgage bond
holders. holding more than So
million of these securities.
Bond Status Calculated.
Mr.. Ballet testified that accord
ing to his calculations. Missouri
Pacific, in the bankruptcy courts
since 1888. has during the last 10
years fully earned its bond in
tereSt. the SIS dividend on the pre-
ferred stock, and SIG per share
on the common for each year.
In view of this, he said. he re-
garded the proposed settlement
with first mortgage bondholderS
as pretty shabby treatment"
He said that outlays which the
trustee in bankruptcy had made
on improving Mopac trackage
and equipment in recent years
amounted to "gold-plating." He
said this "has built great value
into the system"
Another boost for investors con-
tending that Mopac is entirely
solvent came from Robert R..
Young. who said he could restore
the company's security values
quickly.
Mr.. Young. board chairman of /
Allegheny Corp. and of the Chesa- 4
peake g. Ohio Railroad. told the
1CC late yesterday that what is
required is action to give him con- /;
troll of the nearly billion-dollar /
Missouri Pacific properties, now
operated by bankruptcy trustee.
Mr.. Young, legendary lone
wolf" in the railroad industry,
asked the commission to note that
he "rehabiliated" the Pere Mar
quette and Nickel Plate Railroads
after he took a hand with them
in 1887.
Mr.. Young said he could do
something Of the same sort for
Missouri Pacific.
He said specifically that with
"ludicious" management of It's
large cash reserves, Missouri Pa
clf1c's mortgage bonds could be
put back up to par, its preferred
could start paying dividends now
long in arrears. and that the COM
mon stock. twice declared worth
less by the ICC, could sell at from
$50 to 500 a share"
S1.50 a Share Sales.
No longer listed on any ex-
change. Missouri Pacific common
recently has sold over the coun-
ter" for as low as $l50 a share.
Mr.. Young specifically appeared
IN behalf OF preserving the COM /
mon stock interest in the corpo-
ration under any reorganization
that may be perfected, after 18 &
years in the bankruptcy courts.
His Allegheny Corp. has a s33 /
million investment in the COM
mon. representing a 81 per cent
interest. With these holdings.
Allegheny controls the Missouri
Pacific board of directors, but this
Is currently flgure-head group.
Supreme authority over the line
rests with Guy r. Thompson, the
76-year-old bankruptcy trustee
appointed by the United States
District Court of st. Louis. /