Rutland weekly herald. [volume] (Rutland, Vt.) 1859-1877, 1872-10-18

REPORT OF THE CONFERENCE COMMITTEE.
At the adjourned meeting of the Vermont
Central and Vermont and Canada security
holders, in Boston, Oct. 9th. Mr.. Lemuel
Shaw read the report of the committee of
conference, which is as follows:
REPORT.
The committee appointed at the meeting
held October ? to confer with the trustees
and managers have met them, and report
their views as follows; 1t appears by the
report of the trustees that the floating debt,
now in the form Of short notes of the trus-
tees, unpaid bills, accounts, pay rolls, etc,
above all available assets was, June / 1872,
81 ,528, 9l4 IS. Of this sum about 81 300,
900 has been expended for additions to the
trust property which corporation would
charge to construction account, the bal
ance of the floating debt is attributable to
the deficit which has arisen between their
receipts and expenditures since they have
leased the Ogdensburg and Rutland roads.
The trustees confidently express the opinion
that the OgdenSburg Railroad will pay
and also that the Rutland Railroad and its
connections east of Lake Champlain will be-
come of direct profit in the course OF the
next two years Your committee think that
it is proper to consider the deficit on the
leased roads as bonus paid by the trustees
for obtaining property and business taclII-
ties of great value to the line OF road man
aged by them, and for removing compe-
tition which had always been damaging and
Of mn
GUS The trustees always anticipated that
| this floating debt, created as we have seen,
| 81 5000, 900 for construction proper, and
the balance for what we may consider a
paid for obtaining valuable right and pro-
Dertv. and therefore also for construction,
would be funded, and they had hoped to
carry it along without interfering with the
regular payments of rent and interest till
| the Vermont legislature should meet and
| should in some way enable the holders OF the
securities to form a corporation in which
capital In this they have been disappoint-
ed; first, because by their contracts they
| have been obliged to buy much more pro
pertv of the leased roads, and two years,
supply of wood in one year; and, second,
| because the condition of the money market
| ha. rendered it very difficult for any one to
carry large floating debt this year. The
result, as we all know, has been that the
| trustees have been unable to carry the load,
| and a pre- ssing necessity has arisen for I'M
mediately funding this debt. We do not see
| that anything has occurred to lmperll or dl-
minish the value of the property. The road
| and road-bed, repair shops, equipment and
property of all the roads managed by the
| trustees we are assured are in an exceedingly
good and efficient condition and equal to
| that of any railroad in New England. We
| are also assured that they are getting into a
position to increase their income and dimin-
| ish their expenses that the contracts with
the National Despatch Company have not
| been a source Of loss to the roads, and 1t l.
anticipated by the trustees that the rate paid
| to the Despatch Company will be reduced.
| If this floating debt is now funded, the
trustees estimate that the future earnings
Of the combined roads will soon be sufficient
| to pay the expenses Of running, the rent to
all the leased roads, the interest on all the
classes Of bonds, except, perhaps, the second
mortga ge bonds. If, however, they may not
| be able to pay promptly the rent and inter
est due December l, they would issue scrip
which they would expect to soon pay off.
The important and practical question Is,
How is this debt to be funded? The trustees
recommend that it should be funded in
bonds issued by the trustees, having thirty
years to run, at eight per cent interest
These bonds are to be issued under decree
of the Court of Chancery of Vermont, from
which the trustees derive Accompaniment
which gives them power to issue So, 800, 900
thirty-Year bonds at eight per cent. interest
and provide that 800 900 of them should
be left with the New England Trust Com
pany as security for that amount of bonds
due in 1875, leaving 81 SOC, 900 Of them now
to be placed, which is the amount required
a. I1h+ ..yr-,I 1I
the stock and bond holders and the credit
ors of the company are invited to subscribe
for. The decree authorizing this issue Of
bonds provides as follows -
&" And it is further ordered and decreed
that the notes issued under this decree shall
constitute a lien and charge upon the trust
property and the earnings thereof, under
the control of said trustees and managers !;
and in case such trustees and managers shall
fail to pay said notes and interest thereon
as it becomes due and payable, the hold
ers Of said notes or any of them may apply
to the court by petition for realization OF
his or their securities, or for a summary or
der for the payment of the amount due out
of the property or current earnings Of the
railroads under the control and manage
ment of said trustees and managers"
1t would be very desirable if the company
could receive the full par falue of their bonds
but in view of the state of the money market,
and the necessity of making some special
inducement to subscribers, it has been deter
mined to offer these bonds, at ninety per
cent, to be paid for in three instalments,
November 1, December and January l,
and subscription papers have been prepareda
This course, we are assured by eminent
lawyers in Vermont, is permitted by the
laws of that State. Your committee are i'm
pressed with the advantages which would
accrue to all concerned if this property
managed by the trustees could on equitable
terms be vested in corporation, which would
have greater facilities for meeting the grow
ing wants of the community than the trus-
tees have. They are informed that this
subject is under consideration by their coun-
sci in Vermont, who have been requested to
prepare the bills to lay before the legislature
now sitting, which should grant the authori-
ty, Your committee are not prepared to re-
port on any scheme, but one under which
the capital of the. Vermont and Canada Com
panv and the trust debt should be represent
ed BY preferred stock or new mortgage,
and the other securities should be fairly
dealt with, they think would be for the
general advantage. When the plans are
further matured they will be submitted to
the various persons interested. The com
mittee unanimously recommend that the