The Portland daily press. [volume] (Portland, Me.) 1862-1921, 1876-01-10
Eastern Railroad.
Meeting of the Cfedifers-Tbc P.an Pro
Posed for Relieving the ROnd OF its Em-
bnrrassments-Aust other Meeting 10 be
Held next Saturday.

In response to the call of the chairman of
the committee meeting of bondholders of the
Eastern Railroad held some time since in Bos-
ton, meeting of the creditors of that corpor-
alton was held Saturday to hear the report of
the committee of conference appointed to de-
wise some plan to relieve the corporation Of its
present embarrassments. The committee re-
ported that they had had repeated conferences
with the directors and counsel of the corpora
tion, and unanimously recommended the fol-
lowing scheme for funding the debts of the
corporation and recognizing its affairs:
They advise an application to the legisl ature
of Massachusetts for an enabling act and un-
der authority of said act the execution of a
mortgage upon all the present and future prop-
erty of the corporation Under this scheme it
is designed to fund all the debts and secure all
the liabilities of the corporation on equal
terms, in thirty years gold mortgage bond,
with reduced rate of interest during the first
SIX years. interest on debts is to be made up
to the first day of September 1876. The first
coupon on the new bond is to be payable March
1st, 1871; the rate of interest on the mortgage
bond IS to be 81 per cent, per a1num for the
trst three years; AZ per cent for the second
three years, and PEE cent afterwards. Said
bonds are to he PAYABLE, both principal and in
terest, 10 gold. The creditors who now hold
sterling bonds are 10 receive new bonds of the
same denomination. By this plan the creditors
will have security for the entire principal OF
their debts, and ore ouy asked to forbear a
part of the interest thereon. The rate of in-
terest stipulated for during the first six wears
is believed to be all that the corporation is ca
pable of earning. The directors OF the corpor-
aton.are to be nine in number, three chosen by
the bondhOlders three appointed by the trus.
tees of the mortgage, aud the remaining three
chosen by the stockholders. Until the mort
gage debt is reduced to ten millions of dollars
the stockholders can receive no dividends, and
all the net earnings of the road are to be
applied to remove liens and mortgages on the
property, and to the reduction of the mort
cages to that amount
Accompanying the report are drafts OF the
proposed legislative act and mortgage.
After the report was read Judge Foster said
in answer to questions that it was proposed to
purchase bonds at not exceeding par, and IL
they should rise above par the money is to be
invested in United States, Massachusetts, or
municipal bonds. No property can be parted
with except with the consent of the trustees of
the property. No moneys can be applied to
anything except the ordinary running expenses
and the maintenance of the railroad as the
Railroad Commissioners would require it to
be maintained, except to redeem property from
underlying mortgages. There are considerable
amounts OF property belonging to the road
WucI6 Iut S6Curhl6S pleQgeu exceed In value
the debts, and with the consent of the trustees
of the mortgage such debts can be paid and
pledges redeemed. There are mortgages upon
property occupied fo- railroad purposes which
will require to be paid, and the money earned
by the road can be applied to pay off those
mortgages with the consent of the trustees
There is a small mortgage coming due upon
what is called the Essex Railroad, the Law.
renee branch, and that can be redeemed, with
the consent of the trustees, from the earnings
Of rho road Whan fhas hoe haa
ed all the earnings of the road go into the
hands of the trustees to be used by them until
the debt is reduced to $10O00,000. When the
debt is reduced to that amount, it is considered
small enough to be secured amply. The sink
| ing fund is to continue to be 100000 a year.
All just debts and liabilities were to come in
| alike.
Mr.. Morrison, the expert who has been ex-
amining the affairs of the road, was called for,
| and made the following statement:
| As regards the present financial condition of
the Eastern Railroad Company, it is stated,
believe, with very close approach to accuracy
l in the reports of the Railroad Commissioners,
| which have been published in the papers, and
which 1 suppose the greater part of this meet
| ing have read. The brief substance of the
l question appears to be that the road has never
yet earned So, 600, 900 in year, and it never yet
bonded over $50, GOO in year. doubt wheth-
| er it has ever yet bonded over 100000, IL one
| year be taken with another. 1t is probably
| possible. with very careful and discreet man
l agement, to increse the net earnings to some
/ where in the neighborhood OF $500, 900, with a
| prospect of a gradual, and not rapid. increase
| from year to year. l should hope that they
| might increase at the rate of about $4,000 q
l year. l cannot say that that could be conf
| IDENTIFY expected. AS regards the present con-
diton of the road; it is in very fair though not
| in any better order-perhaps not quite as good
1 order as tie average roads running into Boston
| lit is in very fair condition, and in that condi-
| tion which it can be kept in good order at the
usual rate ofexpendltures ;but it is not a con-
l dition in which it can be expected to be oper-
ated for any less rate than roads in this part of
l the country generally are operated for.
Mr.. Morrison thought the plan proposed by
l the committee had fair chance of success, but
believed that for considerable period, at least
it would absorb all that the railroad can by any
/ possibility earn.
After considerable further discussion, in
which the plan proposed was explained in
some of its details, the report of the commit
tee was adopted and the meeting adjourned
till next Saturday.