New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1884-05-24
PASSING. ERIE INTEREST.
ACTION OF THE coMpANY's DIRECTORS.

r,vo REPORTS FROM THE COMMITTEE REGARDING
ruv srcoNp CoysoLs - SCRIP PAYMENT oP-
POSED.
Tho directors Of the New-York Lake Erie and
Western Railroad Company at meeting yesterday
voted to post pone the payment OF the june interest
ON the second consolidated bonds The vote was
virtually unanimous, although an effort was mace
10 delay action for few days until it was certain
that the default could not possibly be avoided.
There are two or three vacancies in the board but
eleven out of the seventeen members were present.
Thomas Dickson, president of the Delaware az"
Hudson Canal Company. was prevented from at
tending tho meeting by sickness.
Immediately after the failure OF Grant " "aru'
AID the Marine National Bank. by which the hro
Company suffered serious loss. n special COM
mittee was appointed by President Jewett TO con-
slder the company's affairs. The question OF paving
the June interest referred by nm 10 inc
directors and the inquiry was ordered to enaoie he
full hoard 70 act on the matter intciligently The
committee consisted of J. Lowbcr Welsh, william
s. Strong. Jacob II. Schiff and r. Sny lam Grant;
and President Jewett was added. 1t is understood
that tbe committee made great efforts TO secure
money with which to meet the June payments
From tbe directors and other friends of the com
papv the committee soon obtained promises lor
$500 900, and 1t then telegraphcd to London thaV
the directors would furnish one half OF the June
interest if the English bond and stock holders would
snpply the remainder Tho temporary loan was to
he secured by coatcrals in the treasury OF the Ere
COMPANY. The replies from London were not
favorable and the committee was forced 10 abandon
its attempt to raise money. The majority OF the
members at once decided i'll favor OF dciault III 'he
interest payment.
OFFICIAL STATEMENT or THE ACTION
Two reports were presented, however at the meet
was incorporated IN the Official statement OF the
action by the board which rs follows:
OFFICE OF rHE NEw-YoRK, LAKE ERIE AM WESTERN
RAILROAD COMPANY, I
NKw-YoRK May %. 1884.
The fiscal year of this company commences WIN tne
LIST Of October AS general RUE 'ns H 9 Saf than
for the last half OF the year The annsot III earnns'
ro1 .T rc The coupons on the second consolidated
mortgage bonds due and payable on the Isl OF june
proxmo twas deemed wise by the parties IN interest
who planned the reorganization OF the Erie Company anu
the organization OF this company un n put tha
second consolidated mortgage and the bonds Sc
cured thereby were executed ana sNueo1 e. ~
which may result the want OF net earnings OF the
morgagcd premises and 70 prGyd T2 C ahn 6 sncS
failure TO pay until each OF six successive que daes
coupons some interest secured by the saiu ihen'o
Under ordinary circumstances the Board might on the
Tor tho deficit Of the first six months relying on we
u.us increase in earnings Of the laS half OF he year, m
country and the earnings Of this company as wen Is
OF others the Board does not feel at liberty to dea WIN
ANYTHING but the business AMI earnings as now aSoef
tanned aud therefore deems wise to accept tne P
visions of the mortgage u. TIE iswrui e l"e
grncy and circumstance aud for mo pres
ent % the t OF me aHS payse by
tue terGs thereof on tho frst proHin2' - r,o %, m,
navInrnt Of the interest cannot be o! long duration
bnt that nv the exercise of great economy N condcn.
the business Of thc company and careful aSndndm!
of ne resources and projection Of t7 credit the emergency
reGurnc such postponcment Of payment either IN ""oe
OF IN part XIV WV orGer Of the Board Of Directors
A. Il. MNCDOSOUGH. secretary.
THE MINORITY REPORT.
The minority report by Mr.. Schif, which was
not adopted recommended the payment of the in
,erest for one year IN Scrip supported by collat-
eral and receivable in part payment for freight
The special committee was continued for the pur-
posa of astcrt aiming whether the plan could be
carried into effect Two or three members of the
board were inclined to delay action until the com
mittee could report on the new WORK, but they
were ont-voted Mr. Schif. in hi. minority report.
stated that 1t was neither wise nor prudent 10 post
pone payment of the second mortgage interest
Tho report then continued
whrc the company may presentnot BE in postonto
pay tacsc coupons ia cash, aud Will Is IN former years.
Il may uot have earaed all tho interest ule wy nlis
prox il expected that the "annss o. The Second nad
Of the scs wear win be than suhlent 70 make 40
any deficiency in She earnings OF ~" u't nan lhe M
der.rngd is therefore OF the opinion that rather than
make default pure aud supCat This ae tlf company
should EFFORT to protect 1t! circuit ~ offering %
Inen H. years scrip. supported ny colate4 III We
possession o. thu company or ny utlt VI the C'"!@
With trust and made receivanc tor !yMeoo5 vol
freight or otherwise, due to tae ctanF, 10 tue eN'cAJ
OF i2O'h any one payment; ana Inc undeIsishg" re-
cemmcnd, thar both the interest maturing June am
December l. 1884 he paid in such scrp Inis an ani4t
OF about S2,OOo,o00 scrip would uillmat.X ne
issned and the redemption Of the same oans H,S'fcTI
in no W Az become burdensome 20 the company.
on the hand if the payment Of the interest Is
s,mnly postponed for the present. it will nave to be paid
AT sone period within the three years or undr me
become liable TO foreclosure. THUS It is shown by the
payment Of the coupons IN scrip as pof3Ss az eae y
less thas sked than If the payment o. the coupons u
Tn cdmpany's second mortgage bonds widely dis
trfbuted and 10 large extent held for Investment
the h1. fsnsa stOqo as 5nI e t time
rubIi ,heh that the second mortgage bonds
secmre 70 hold for Investment purposes. II is
t that the mortgage under which the bonds are SSGed
rne thai an emergency exists at present. but 10 post
poue payment OF the interest at THIS hrst emergency
without effort TO avoid default IS entirely IN
ustifabr IN the existing situation. Your company has
only lately emerged from the discrcdit under wnch has
49, !, 20, a ;rop m. same has ony lust been com
pleted To permit. then, default pure and simple, or
posipouement 1t is called In the majority report To %
made at ju1ctuTe and thus fix stigma upon the credit
of the company from which it can scarcely recover
for loag time to come Is a SERIOUS sep wne4 ca
least TO the bondhoders the good viii OF the directors 10
do thing. by offering payment OF the inter
eat in a manner which being IN the of the company
20 make will enable those who have invested in the sec
ond mortgage bonds TO convert then coupons nto cash.
even IL al . moderate discount and thus an income
from their Investment. The undersigned feels wen sats
fed that te scrip OF the company Issued IN TIE ofn az DC
foIe indicated will De worth very nOay It's race ya'ua
and that by payment in such scrip the company can
bridge over The present emergency In a manner which,
while no burden to it, will save il from dlshOuOr.
WHY SCRIP PAYMENT WAS OBJECTED TO-
The default IN interest does not involve foreclos-
ure by the bondholder because the term of the
mortgage provide that il can be foreclOsed only at
the six successive mammal defaults. director
Of tha rn,nnanv said yesfnrhaY that the nrincinal