New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1883-05-26
RAILWAY INTERESTS.
THE LEASE OF JERSEY CENTRAL.

THE LEASE OF JERSEY CENTRAL.
ITS EXECUTION STOPPED BY AN INJUNCTION OBJ
tanned BY A LARGE HOLDER OF THE INCOME
BONDS.
Receiver Little and Franklin B. GOwen, of
,be Central Railroad OF NewJersey went before Chan
cellor Ruuyon at his chambers In Newark yesterday
Mr. Little stated that the company had fully complied
with the conditions set forth In the order recently made
nv the Chancellor relative to the receivershp debt The
chancellor thereupon made order directing the re-
cciver 10 turn the property TO the company forth
with This will be accomplished probably to-day. The
frat order made by the Chancellor required that satls
factory security for the payment within ninety days or
the floating debt OF the company should be deposited
with the Court IL devolved upon Mr.. GOwen and his
friends who are anxious to secure the lease OF the
nrouerty to the Reading Railroad. to fur.
n,sh the security 1t is not known what
security the Chancellor accepted Mr. Gowen
ast evening refused say than that the security
was perfectly satisfactory TO the Chancellor and every
body else meeting OF the directors of the Jersey
Central has been called for to-day, and the lease to the
Reading Railroad to have been formally executed
at this meeting. but an Injunction restraining the COM
papy from doing this obtained yesterday y one OF
the largest holders Of the bonds In lection to
thj. act on Mr. Gowen said last night
cit will Of course prevent the execution of the lease
for few days for 1t would be improper for 10 attempt
even TO disregard the order of the Court. Tho
provisions OF the lease relaNFe 10 inc INCOME
bonds were that the Reading Company agreed to
pay the interest them from June l. the date when the
lease go into operation and whatever part OF the
unpaid interest might be legally due 1t Il question
whether there is any interest due the income bonds
and possibly might decide that, the road
had been In the hands of receiver,
the income bonds we're not entitled to
interest for that time. But the Reading Company
agrees pay the interest If any shall be found to be
due. >
The Injunction was obtained by Joseph W. Burn
ham, through his attorneys. sewel Pierce, from
Judge O'GOrmau in the Superior Court. chambers The
ACCOMPANYING order to show made returnable
NAV 90 Mr. Burnham brings the action "A holder OF
certain income bonds of tho company He alleges in his
complaint that the capital stock of the company Is
SIS 200 and at the time OF the issuing OF the In
come bonds there were outstanding liens upon the
leases property and franchises Of the company amount
ing TO s3ls5O276. The company May
|. 1873. issued S2.45O,O0O of bonds to
secure the payment OF existing debts. the
bonds to bear al per cent and TO be payable in
1905 The interest on the bonds was to be PAD each
wear out OF the surplus earnings OF the company after
ma Davment of prior claims Mr. Burnham is the
owner and holder OF Sl2G.4OO OF these bonds The
company being in the hands OF receiver appointed by
Inc Court of Chsncery in Ncwcrsey had earned in each
of the wears from 1870 to 1888 than enough to
its running expenses the interest on the prior liens and
the full per cent interest on the Income bonds, but
the receiver had refused to pay any part of
tins interest The company In violation OF lts
plain duty, had misapproprated its earnings and had
the acquisition OF lines, rOl Ing
stock, etc. TO the amount ~ several million dollars II
also alleged that an order nash fact been made by the
of CuanceTy OF NewJersey putting end to the
rcceiVershp Of the company. The com any now u is
and franchises to the Philadelphia aud
Reading Railroad Company iOs the term
Of 900 wears aud that under tIc lease no provision VIII
be made for The payment OF the past due interest on the
income bonds. II the lease is executed and the prop
OF the company delivered under IT, the palutlh Will
rrcparaby damaged and Will have no means OF On
forcing the trust created by the income bonds. He
therefore demands Judgment for the amount OF interest
now due; OF. company should deny lts answer
its earnings had been sufficient IN TO nay
such interest Tor accounting. ana for per
maucnt injunction restraining the transfer OF the com
pany's property as before described.
Mr.. Buruham in hs AFFIDAVIT states that the state
ments III the complaint IN regard to the earn,
iugs OF the company are based on the published
statements the and officers OF thc company.
T. b. Grant III affidavit us~d 20 obtain the Injunction
order that he has been for many years cOntesaut
with accounts Of railway companies. that ne has
examined copies of the Official sworn statements OF the
officers of the defendant company, and thai II appears
his examination that thc surplus earnings Oh the
company for the years from 1879 10 1883 have been
b inds in fun
Mr BunhAm. the plaintiff 'he suit. ia member of
Burnhsm IL Co.. No. SO Broad.st lie said ye-tcr-
day: 81 AIN simply tired OF waiting for the
interest on my bonds. have tried hard
company but the receiver and tho ohcers viii give
no satisfaction concluded after my patience hid been
completely that would sec II could compel
attention made a formal demand for my Inter
est May l, and was refused. II the
property leased 10 the Reading /
7. AIRED that I shO I'D he shorn o. OF my rights
and hold Of the bonds to any risk Of that
were entitled to our Interest and II he had lived think
there would have been OF this acting
myscf bat several bOndhOders have expressed to-
day a wish to JOIN with Inc Ia the sult."