New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1884-05-10
THE GRANT& WARD WRECK.
WILL IT AFFECT ERIE SECOND CoNsoLsi


FIRM.
| 1t was announced yesterday that President
Jewett, of the Erie Railroad Company, had
declined to assume the responsibility Of
paying the June interest on its Sec
ond consolidated bonds. The question
will be determined by the directors. General
Grant and Mrs. Grant assigned their property
to William H. Vanderbilt. The Marine National
Bank began a suit against Grant Ward TO
recover the sum of 100000, and Julien L.
Davies was appointed receiver OF the firm In
suit by James ID. Fish's assignee. Ferdinand
Ward has been placed under the surveillance OK
detectives. No statement regarding the Marine
Bank affairs has been made.
FAR. REACHING SEQUELS OF THE FAILURE
MIR. JEwETT's CAUTIOUS CoUasE-How DEEPLY
THE GRANTS ARE INVOLVED.
The most important public development yester-
day growing ont of the complicated affairs of the
suspended firm of Grant Il Ward and the broken
Marine National Bank, was the announcement that
the payment of the Juno interest on the Ncw-York,
Lake Erie and Western Railroad Company's second
consolidated mortgage bonds TO be matter
of future determination. Up to the present time no
doubt has been felt as to the payment by those who
relied upon the assertions of the officers of the COM
pany for it was positively stated by President
Hugh J. Jewett, within few weeks. that the in-
terest would be paid 1t is not known that the in-
erest will be paid but the president has referred
the question to the future decision of the directors.
Operators to whom the fact known interpreted
it as a virtual confession that there woud be q
default. This view of the case is disputed, how
ever by the friends of the company.
Since it was learned that the Erie and the Chicago
and Atlantic Companies had securities with Grant
l. Ward, there have been widely varying estimates
as to the extent of the relations between the hrm
and the railroads Fears were expressed that tho
Erie's affairs were badly complicated through the
failures, and doubt was renewed as to its ability to
meet the next coupon on the second consos. The
fact that Bird w Spencer treasurer of the Erie was
a director in the Marine Bank, and warm friend
of James d. Fish and Ferdinand Ward both men,
bers of the suspended firm, lent color to the
apprehensi0ns that the railroad company would be
niuriously involved in the disasters. In the stock
and bond market yesterday Erie stock and second
cousols prominent feature. There were large
dealings in the stock in the last hour and the price
broke from 1858 to 13l2 without reaction, against
1925, Thursdays closing. and 1914 a 1858 at the
opening yesterday The final dealings were made
at rally to 1iss. The transactions in the Erie
second cons OILS rose 10 the figures Of Sl,6OO,OOO.
The opening price-75- was 1ss per cent below the
but for the rest of the business day the bonds fell
steadily. closing at IS, the lowest price of the day.
The decline from Thursday night WAS s3s per cent.
WHY MR.. JEwETT DECLINED To ACT.
person whose authority to speak in the matter
is unquestloned, said last evening: at Is
not true that the directors the Executive
Committee of the Erie Company have de-
cided to pass the June interest on It's second
consolidated bonds. No action has yet been taken
But President Jewett has declined to take the re-
spOnsblty for the payment and will leave that to
be assumed by the directors. They may decide to
pay it or not their wisdom directs. If it had not
been for the Grant & Ward complications and the
condition of affairs recently, Mr. Jewett would have
paid the June coupon on his own authority without
consulting with the directors 1t has always been
his custom to pay the companys interest on his Own
without any formal direction OF the
board But in view of the fact that the Grant &
Ward complications are not fully known and tnat
financial matters are unsettled he does not feel
cined to take the responsibility himself for meeting
the June interest. Uuder all the circumstances Il
he paid 1t, stockholders might subsequently object
because he did so if he decided not TO pay 1t. it
might be said that he ought not to nave done that
Mr.. Jewett does not propose to put himself in that
position. From its earnings and It's current credit
the Erie could have met the June interest under
without any increase of credit simply the current
credit such as all corporations have recourse TO- 1t
is not necessary that company should
have all its earnings in hand But in
the present situation Mr.. Jewett did not
feel at liberty to go to any for advance and
he prefers that all arrangements shall be made by
the Board of Directors. No meeting of the board
has been called to consider this question. When
the company is prepared to pay the bondholders,
the fact-will be announced through the proper
channels"
ERIE's RELATIONS WITH THE FIRM.
The amount outstanding Of the Erie's second con.
solidated mortgage bonds is $25,000000. The
bonds bear interest at the rate of
per cent year, payable in June
and December. The amount required to
meet the interest that is nearly
due is $3.50 900. There is no further heavy inter-
est payment, except this, that will be due before
next September.
it is stated in behalf of the Erie Company that it
has no large direct concern in the tange developed
by Grant & Wards failure. The Chicago and
Atlantic Railroad Company, which FURNISHES the
81 500 900 second mortgage bonds with Grant IL
Ward, The firm had the custody Of H.
natl and Indianapolis stock and about 100000 of
various Other securities belonging to the Erie; This
stock was the lot which was transferred by James
MoHenry a short time ago in settlement OF the
Judgment of the Erie against him. Ii had been in
he possession of the rie, which had desired to sell
T. but President Jewett did not care To dispose Of
I until settlement had been agreed upon with
Mr.. MefIenry. The following statement of the re-
ations between the Erie Company and the sus-
pended firm was made last evening by high oli-
er of the road
The Chicago and Atlantic bonds were placed with
irant Ward to sell. An advance OF Sl,5oo,ooo wa.
obtained on them. They have been re-hypothecsted
with the other securities. The loss TO the COM
)any under circumstances be large because
II the small difference between the price which Grant
Ward agreed to pay for the bonds and the amount Of
he advance The loss the 900 shares OF Cleveland
Columbus, Cincinnati and indianapolis stock which tho
irm has pledged on loans cannot well be large There
las been no time within the last two weeks when the
owest price which the stock might baye been