the First and Second Mortgage Bonds, which are the only absolute obligations to pay interest, should be subject to such application as might be necessary to complete the road, to put it in high condition, and to provide it with all the equipment which might be necessary. For this purpose, it was necessary to obtain systematic and uniform legislation from the four States, enabling the new securities to be made liens upon the whole property, as an entirety,including all future acquired property, equipment, and other personal property, the franchises of the Company, and the franchise to be a corporation, and providing a mode for rendering the latter franchise available to the purchasers at a sale under any of these liens. All these objects are at last satisfactorily accomplished. The obtaining of the necessary legislation; the laborious negotiations with parties so numerous, residing in this country, in England and in Germany; the conduct of the necessary legal proceedings to consummate a sale; the purchase of the property; the organization of the new Company; the reception of the old securities; the creation of the new, and their distribution to the parties entitled to them; the adjustment of anomalous cases, arising out of the peculiar complexity of the interests involved, have occupied a period of more than two and a half years of our industrious attention to this large and difficult trust. The result has been, that the holders of securities of even the highest class have been more benefited than they could have been by the absolute enforcement of their legal rights, while all the inferior interests have been rescued from total extinction. We shall not advert to the new securities further than to draw attention to some prominent and distinctive characteristics. 1. The bonds are not only secured upon the whole line of the road, but, by the force of statutes in all the States, upon future acquired property, the equipment and appurtenances-even such as are deemed in some of the States to be capable of being severed by execution from the body of the road--and upon materials, supplies and implements, in all the States except Pennsylvania. 2. They are likewise secured upon the franchises to be a corporation now possessed by the Company, which are by these statutes declared to pass to the purchasers, so as to enable them to organize anew, without the necessity of obtaining future legisla tion-often difficult, and sometimes practicable only through submission to unjust sacrifices. 3. They secure to their holders the right to vote in all meetings of stockholders-the First and Second Mortgage Bonds at the rate of one vote for every two hundred dollars of their par value, and the Third, at the rate of one vote for every one hundred dollars—a provision which the experience of mortgage creditors of many railroads in this country, in cases where the stock was of small or merely nominal value, has shown to be an invaluable guaranty. 4. Provision has also been made in the deeds of trust for a quasi organization of the bondholders to enable them to act more efficiently for the protection of their interests and their legal rights. 5. The deeds of trust, by which the bonds are secured, are made by the undersigned direct to the Trustees, John Ferguson and Samuel J. Tilden, subject to which, and in subordination to the rights created by which, the Company takes its title; a mode of conveyancing which, on careful consideration by counsel, in view of the peculiar nature and incidents of individual and corporate ownership under the laws and constitutions of this country, is deemed to be a valuable improvement. 6. These securities have been carefully prepared (in conformity, of course, to the bondholders' agreement) to make them as effectual as possible, under the best lights of all the large experiences—practical, financial and legal-in regard to railway investments of which the last ten years have been so fruitful. In the various legal proceedings for the sale of the road, in the Circuit Courts of the United States for the Northern District of Ohio, the Western District of Pennsylvania, the District of Indiana, and the Northern District of Illinois, the bondholders have been represented by Henry Stanberry, Esq., Messrs. Hunter & Dougherty, Messrs. Ranney, Backus & Noble, and S. J. Tilden, Esq., and the defendant by the Honorable Noah H. Swayne, now Associate Justice of the U. S. Supreme Court, and the Honorable A. G. Thurman. Mr. Tilden has also acted as the general counsel for the bondholders, and, aided by Judge Swayne, prepared the securities. Your Committee have also had the cordial and efficient cooperation of George W. Cass, Esq., now the President of the new Company. NEW YORK, October 1, 1862. (Signed) JAMES F. D. LANIER, SAMUEL J. TILDEN, LOUIS H. MEYER, J. EDGAR THOMSON, SAMUEL HANNA. Trustees and ORIGINAL PLAN OF RE-ORGANIZATION. (Adopted October 20, 1860.) Whereas, the Pittsburgh, Fort Wayne and Chicago Railroad Company has become embarrassed and unable to pay the interest on the mortgages upon the respective portions of its road, which were assumed by it, and which were given by the Ohio and Pennsylvania Railroad Company, the Ohio and Indiana Railroad Company, and the Fort Wayne and Chicago Railroad Company, or upon the mortgages given by the Consolidated Com pany. And whereas, bills of foreclosure, asking for the sale of the said railroad, with all its appurtenances and equipments, have been filed by certain holders of bonds of the original Companies, and the trustee of the mortgages by which such bonds are secured, in the Circuit Courts of the United States for the Northern District of Ohio, and for the Western District of Pennsylvania, and for the District of Indiana, and for the Northern District of Illinois. And whereas, a considerable expenditure is necessary for the purpose of putting the said railroad in a condition to do business with economy and efficiency; and arrears of interest on the said mortgages have accumulated, and the principal of some of them will fall due before the road can supply the means of paying such principal, in addition to the accruing interest. And whereas, it is indispensable that the holders of the aforesaid bonds of each class, should unite with each other to provide the means of purchasing the said railroad at the sale which has become inevitable, as well for the purpose of protecting their own interests from sacrifice as to preserve the said railroad, with its appurtenances and equipments, as an entirety, and to secure the power, while respecting existing priorities, of saving, as far as may be, the interests of junior creditors and stockholders from absolute extinction. And whereas, a plan of mutual adjustinent has been devised, which seems likely to secure general co-operation in promoting the future business of the road, as well as in attaining the aforesaid objects; which plan is substantially as follows: PLAN. It is proposed that agents-five in number-shall be appointed by the bondholders subscribing an agreement for the purpose, who shall be authorized to purchase the railroad, with its appurtenances and equipments, at any sale or sales thereof; and, in case of such a purchase, that a corporation or corporations shall be organized under the laws of Pennsylvania, Ohio, Indiana and Illinois, or under the laws of some one or more of those States, and the said railroad and property vested therein; and that stock shall be created and securities made, and the same disposed of in the manner and on the conditions hereinafter expressed. ISSUE OF FIRST MORTGAGE BONDS. 1. Bonds of the new corporation or corporations shall be made to an aggregate not exceeding five millions and two hundred and fifty thousand dollars, which shall be secured by a first lien upon the whole line of railway from Pittsburgh to Chicago, with all its appurtenances and equipments; shall bear interest after 1st January, 1862, at the rate of seven per cent. per annum, payable in New York, semi-annually, in six equal classes, and in such manner, that one semi-annual interest payment shall fall due on the first day of each month in every year; and shall be redeemable on the first day of July, 1911, or, at the option of the Company, at any time or times after the first day of July, 1866. 2. These bonds shall be convertible, at the option of the holder, into bonds bearing six per cent. interest, but irredeemable except by the operation of a sinking fund herein provided, which sinking fund shall consist of one per cent. on the amount of bonds so converted, to be reserved at the same times at which interest on the said bonds shall be payable, and of all the surplus net earnings of the Company, after paying interest on its bonds, |