The Portland daily press., 1884-04-17

PORTLAND, Me, Apr. 10, 1884.
MEssRs. NATHAN WEBB, SAMUEL E. SPRING
AND WEsToN f. MILLKEN:
Dear Sirs:
Having been retained by you generally with
reference to the interests Of the holders Of bonds
secured by the mortgage Of the Portland & Og-
densburg Railroad Company, dated November,
1871, | report what has been done, and what
consider should be done, as follows:
First. have carefully examined the
papers under which you hold your title,
and have had them perfected in some details
have no doubt that, subject to the lien Of
the first mortgage of $800,0O0 and to the liens
OF minor mortgages and rolling stock leases,
which will hereinafter explain, the mortgage
vests IN you good title to the whole line Of
railway between Portland and the State of
Vermont, including the terminal Isoslisiss at
Portland, and all the rolling stock and other
appurtenances, except, possibly, fuel and mate
rails, and including also the franchises or right
to construct the road from the Fabyan House
to Scott's Mills, and the road itself when, il
ever, it may be constructed across that gap.
Second. Immediately upon receiving your
instructions as above stated, I called upon
John w. Dana, treasurer Of the corporation,
Jonas Hamilton, its superintendent, and Eli
sha Newcombe, its road-master, and also had a
cursory view made of the road by Col. A. W.
Wildes, who examined the road in behalf Of
the city, and made detailed report in refer
ence thereto In A. d. 1877; and l especially
asked Col. Wildes, as far as he could jadge
with the snow lying upon the rosd-bed, as it
was when he made this examination at my re-
quest, to state how the road compared with its
condition in A. ID. 1877.
The result of all this was that the road was
reported as IN very good condition, except the
rails, and few bridges, especially the wooden
portion of the bridge at Wiley Brook and the
long trestle bridge at Center Conway and Al
bany Brook, each of which require to be recon-
structed Immediately. Some of the other
bridges require repairs, but not to occasion any
special remark. The life of the track iron is
about run out, and substantially the whole
road must be relaid with new rails within the
next twelve months. A large portion of the
iron, say over thirty (S0) miles, is now in q
dangerous condition, causing numerous acct
dents, and should be replaced Immediately.
I find from the treasurer's figures, which 1
will give later on, that the corporation cannot
possibly make provision for relaying this iron
or renewing the bridges; so that apparently,
unless you took some immediate action, not
only would the corporation fall further In ar
rears and the property rapidly deteriorate, but
it would be impossible for the corporation to
do its summer business
Without going further into details, found
the condition of affairs such that it was imper-
alive you should take possession as trustees, il
the corporation would give you possession, or
secure the appointment of a receiver.
On account OF the personal endorsements
operate the road yourselves, and by reason
more especially OF your being without the
means to make the estimated improvements
Immediately required, the latter was the only
practical resort.
Third. The liabilities prior to your mort
gage, or which upon the appointment of re-
ceiver would be regarded as prior to your
mortgage, lind substantially as follows, the
figures being given me as Of March 20, 1884,
These liabilities have been somewhat increased
by bills rendered since, and will be still fur
Their increased by bills rendered this month.
1. Mortgage of $500 1000; scrip on the same
overdue and unpaid S9,605 20; coupons upon
the same due Jan. /, 1884, 1928 400; and accu-
INFLATED interest upon the scrip and coupons
$497.50; making the total of overdue scrip
coupons and interest $33, 5000.
2. Mortgage notes upon real estate overdue
$4,000; not yet due, $4,000; interest on the
same overdue, $4,000, liens on rolling stock
overdue, LOO; liens on rolling stock not yet
due S18, 1876; making the total amount of
incidental mortgages and other liens overdue,
and not yet due, including the $4,000 interest
overdue, SAL, 11576.
8. Overdue pay roll, SS,147; current traffic
balances, $7,638.03; current accounts and
notes for materials, supplies and work done,
39,6O0.S0, making the amount of current float
ing debt, aside from that secured by mortgages
or other liens on rolling stock, $50, 1856 .83.
Against this the available quick assets were
reported at $l1 ,487O9, leaving the net liability
upon current floating debt not secured BY
mortgages or other liens after deducting quick
assets $43, 1854.
Fourth. On the 9th of March, 1884, upon
bill filed in the Supreme Judicial court for the
county OF Cumberland, Samuel j. Anderson
was appinted receiver, according to the decree
which has been published, and with which you
are familiar.
The decree submitted to the court in your
behalf was intended to carefully secure the
rights OF all parties, and to put on no lien
which wss not Offset by an equal benefit to
the body Of the property. The terms of the
decree submitted are as follows:
The court was asked that receivers certif-
Gates might be issued for an amount not ex-
ceeding $250,Oo0 forslaying the road with steel,
purchasing two locomotives, renewing the
bridges and paying the overdue coupons and
scrip secured by the first mortgage, as we'll as
the coupons secured by that mortgage coming
due July l, 1884, SO that the application Of the
proceeds of these certificates was to be such
that no bondholders would suffer any detri-
ment or diminution OF security BY their issue
In accordance with the settled practice, it was
further requested that the net earnings, when
available for such purposes might be applied
to the payment Of the liens upon the rolling
stock, interest upon incidental mortgages and
on rolling stock, pay roll in arrears and the
current floating debt, as stated; it being be-
heved that the principal of the incidental
mortgages named would take care of ITSELF
ton of paying scrip and coupons upon the first
mortgage, aud of paying the current floating
debt, aside from the pay ROLL but presume
in due time the court will authorize the pay
ment of coupons, scrip and floating debt afore-
said.
There is also outstanding a loan obtained
for the construction of the part OF the road from
Scott's Mills to the Vermont line on which
loan is now due $26, 797.02, the same being
secured by S1OS,OO0 of the bonds covered by
the mortgage to you. as trustees 1t is clearly
for the interest of the other bondholders Of the
same class, that this loon should be taken care
of, to prevent the forfeiture of the bonds Sc
curing 1t; and the court will be asked in due
time to make provision in reference to it.
AS part OF the line is in New Hampshire,
application was made to the Circuit Court Of
the United States for the District of New
Hampshire, in the case of the Mercantile Trust
Co. vs.. Portland Ogdensburg Railroad Co. ct
ais, pending in that district, for cooperation
with the Supreme Judicial Court of Maine;
and the court has co-operated to the extent OF
confirming the appointment OF Mr.. Anderson
as receiver, and otherwise confirming the de-
cree appointing him receiver, subject how
ever, to the limitation that not more than
100000 of certificates shall be issued, without
further order of the court, and With the excep.
ton that no part of the 100000 certificates
authorized is applicable to the purchase OF
locomotives.
Fifth.-Judging from the past there can be-
apparently no doubt about the capacity Of the
road after it has received the benefit of the
$250,000 certificates to earn the interest on the
first mortgage and on the certificates, and a
considerable surplus beyond.
Col. Wlldes reports that he is able to see
improvements OF at least $3.50 600 upon the
road since he made his report in A. d. 1877
and Judging from the statements of the officers
Of the road, the improvements considerably ex-
coed that sum. Certainly we may safely say tina
there has been expended since 1877, from tibet
earnings of the read at least S150.0O0 in i'm
provements. In addition there has been paid
from the same source upon the principal of
the loau for the construction of the road from
Scott's Mills to Vermont, S24, 244S6, besides
interest upon the whole lean; and there has
been paid since Oct. 1, 1877, upon scrip into
which past due coupons of the first mortgage
were then funded, $102, 71430. The coupons up
on the first mortgage bonds, which have been
presented, have also been paid with the ex.
ception of the coupons due Jan. last. This
has all been done from the earnings of the
read, though the floating debt has meanwhile
somewhat increased, the precise amount of
which increase L cannot state, but perha ma
S25, 000 The road shows, among other inn
provements, the filling in of the Dismal Pool.
at a cost of over $4,000; the building stone
culvert aud filling in at Artists Brook. al a
cost of about $40, 600; the filling in of sundrv
other temporary bridges, widening of cuts.
widening of embellishments, lifting mn and
completing the ballasting Of the road-bed ac-