Litchfield enquirer., 1873-03-20
Boston, Hartford and Erie.

A few weeks ago the Boston, Hartford and Erie Railway Company was thought so hopelessly moribund that the infusion of tried executive capacity into it's man. agement was deemed too late to help the suffering stockholders. Nevertheless the new management set to work to bring or der out of the chaos of mal-administra- tion left by their predecessors. The con- dition of the corporation was briefly as follows:-Track had been completed from Boston to Peekskill, Q distance of 29O miles. To construct and operate it so far a debt had been incurred of $25, ,OOO, 600; bond debt of $21, ,00O, 900; floating debt of $7, ,OOO, 900; $2O, coo, ,OOO was in the shape of first mortgage bonds, taking the name of the Berdell mortgage, Berdell being the name of the trustee of the is- sue; $1, 100000 was prior lien, even, to the first mortgage bonds, being an issue to cover certain bond and stock debts to local roads, which were absorbed by the main corporation. Of the so-called first mortgage bonds &, ,OOO, 900 had been guaranteed as to interest and negotiated by the Erie Railway Company, as they aver under an implied contract by the borrowing corporation to complete the remaining hundred miles of the road. The actual management of the Boston, Hartford and Erie passed out of the control of it's directors four years ago by virtue of de- fault in the payment of interest on the first mortgage bonds. Since that time it has been operated by three sets of men: The trustees of the Berdell mortgage op- erated it until Court order put it into the hands of receivers appointed in the interest of the creditors of it's floating iV, &,1~r L assignees appointed under the United States Bankrupt law. The result was the same i'll each case. The earnings of the road sufficed to pay actual expenses, and any surplus was absorbed in legal fees. The Berdell mortgage was legally foreclosahle on the 18th of this month, and such step would at Once wipe out the interests of all other parties. The Erie Railway Con- pany, to protect its interests, filed bill i'll equity i'll the United States District Court of Massachusetts to restrain the trus- tees from forming any new organization affecting the existing status of the corpor- at1on by foreclosure; also from disposing of the franchises of the road under such fOreclosure. The step was one in which all the non-preferred creditors were inter- ested on the side of Erie, as the foreclo- sure could only result in the liquidation of the first mortgage debt by carrying with it power to construct new corporation, possessing all the franchises of the old one and none of it's dehta.
 The several meetings of the stockhold- CTS held lately have resulted in the fol- lowing plan:-All non-preferred creditors are to oppose the foreclosure. In the event of successful termination to the suit, the whole indebtedness of the road, stock and otherwise, is to be capitalized at fifty per cent. This would enable the corporation to reorganize with an original indebtedness of less than their present stock indebtedness. The stockholders have already pegotiatee $1O OOO, 900 loan in London, conditioned upon the success of this scheme With this amount in hand the new direction could speedily complete the line to Newburg, and rail- road men generally believe that the con- nection completed might make it one of the best paying roads of the East.
 The argument on the injunction was heard in Boston yesterday. The coalition was represented by Hon. B. F. Curtiss, General Butler, Messrs. MacF Farland and F. A. Lane. If it should terminate favor ably to the coalitionists the success of the new plan is almost assured.-M Y. Her. ald.