The Portland daily press., 1885-10-14

capable of being run as economically, safely, and
wisely in the receivers hands as it is possible TO
run the Portland and Ogdensburg railroad and
believe that this road can be managed just as well
nv General Anderson as Receiver, as it can by
General Anderson as President. The Receiver is
in possession of the road, the Dill Is pending in
court the trustees under our mortgage so long as
nav HE debts he has incurred need not apply to
fbe court for possession of that road but they NAV
leave If as it is so long the Receiver appropri-
afes the net earnings TO paying the debts he has
incurred. This is the course OF proceedings which
/ believe should be followed IN the management
of the road Whenever the second mortgage bond
holders desire to remove the Receiver from his
possession all they have to do is TO secure the pay
ment of the debts he has incurred and obtain the
action of the court decreeing possession in
their favor; but as it seems to me SO long as he
manages the road economically, ana M SO long as
the net earnings of the road go as last as possible
to pay the debts he incurred we need 10 nothing
but wait and let the net income OF the property
city's mortgage where it belongs as q second
mortgage upon this property lApplause). Now
what are the obJectons 10 thiS R Rit o9inarly
erty and can take possession OF IL II ne wants to,
thinks he has got about all he can get out of his
mortgage. We have got that we are IN posi-
hands to discharge itself from debts or
where we can take possession sion. of it if
are the objections that can be urged to that
Of haS been sd that soc
that BY force of the foreclosure the second mort
gage bondholders become new corporation, the
stock OF WHICH Is IOdue up
bonds and the amount OF overdue coupons, The
principal IF the bonds is two and half Millions
the Overdue coupons about another million and
half and SO the stock OF the new corporation will
be four millions and no dividends will be paid up
on it, Now gentlemen, is it so dangerous to hold
not take it when it belongs to him? If this was
question of issuing the municipal bonds
now, or paying out municipal moneys now, for
the purchase of railroad Stock, could see some
reason why we should not do it, but is there any
reason why we should not take the railroad stock
t az belongs to us and hold it, and own it and
especially when we have a majority of stock and
can have directors that will pay us the dividends
when they belong to us. 1t is proposed under the
new scheme of reorganization Tor the city to
hold seven hundred and sixty thousand dollars of
preferred stock. Is it dangerous to hold new
stock acquired under foreclosure md safe to
hold preferred stock ?Is it because the stock has
some value in lit that it is dangerous for the.city
| to hold it and safe to hold seven hqndred thou
| sand that has no value? never heard that the
| liability of accident on a railroad was so great
| that a man would not hold stock he acquired by
demonstrate demonstration that that property had value
| AS say if this was question of embarking now
one thing; but this is question of the city tax
ing and holding the property which belongs to it,
and taking it and holding it in manageable form
so that it can control that road and not in form
which will destroy and swamp the whole property.
| ! am not an advocate of the city remaining per-
| manently stakeholder in railroad corporation.
| / am entirely willing when the time comes, after
fair negotiation, and by the voluntary and dellD,
to sell that railroad for fair and valid consdera
| ton, am entirely willing that it should be sold,
| and / don't care how soon the day comes when
| the property is disposed of; but what want IS,
while the city owns the property to have it own it,
and hold it, and manageit. (Applause).
Now, the only other objection that remember
| TO the plan which / have proposed is, that if we
take the stock and hold it, by the unwise action of
some body of citizens or some board OF the City
| Council this whole property will be mortgaged
and the stock will be sunk out of sight and the
| value disappear.
| today m think that they wise anOuQh to de-
| termine what body of citizens shall do nyears
to come? Isn't it best for us to deal with the
thing that can be done for the city today and not
think that we are wise enough to decide now the
problems that may come up in the future? II we
do the right thing today can we not safely trust
that when the day comes that an unwse scheme
is proposed for the purpose of extending the
road and exposing the interest of the city to the
danger of loss that the men OF that time will look
out for the interest of the city as we guard it to-
hamper and incumber the property of the city
with mortgages with the deliberate statement
that it is done for the purpose Of =, pre- e.
full authority as the municipal body of today from
being able to do thing which they may want
owns this property but We will so cucumber it
with. debts, cucumber it deliberately and pur-
cc; Htiis 'n@ If Portland shall be able to do
what they want to do with that property?
] submit that there is no force in that argument.
We want to take and hold what belongs to us today,
and it belongs to the city it must be left to the
guardianship Of the city, and if we do right today
let us not assume that the men OF ten or twenty
1eopardiZe or destroy the interest Of the city,
How would such an argument as that appear adj
man should say to himself Il own this property,
but don't dare to take it and hold it as my prop
erty; will put an encumbrance upon it so that
hereafter L can not do anything with it,, so that
can't mortgage it any further" Isn't that the
force of the argument that is addressed to US
here? Because in the future some City Council
may possibly waste this property in an unwise
scheme therefore it is not safe for the city to
or hold what belongs to it. do not see that that
result follows from the premises. The fact is this
burdenls upon us, TINS properly is mere ana TINS
question must be dealt with now, and see no
in other instances unwise action on the part of
city governments that therefore we shall not take
and hold this property.
| Now have endeayored to give an outline OF
what understand is the decree of foreclosure in
this case and the effect of it, what the position of
the city will be if the organization takes place
under that foreclosure and my reasons for beey-
ing that it is the proper course for the city to pur
sue, with some objections which have been urged
Now # will be borne in mind that proceeding in
this way there is no danger whatever that the city
will lose its control of the road until it determines
to part with its interest in it. Because although
we do not have the original information which
should desire to have before the details of the
plan are carried out, still have been over the
ground with the. city treasurer and have his fig
ureS which believe to be correct and they show
that by no possibility under the foreclosure can
the citys interest become less than controlling
interest In the ROAD. III is true tnaC some OF the
coupons of the bonds held by the city were paid
down to September, 1876. 1t is true that there
are good many of those bonds out which have
all the coupons upon them due so that of course
each bond which has all the coupons due upon it,
will have coupons for about five years prior to any
upon the ey 6 00nds OF any INT interest due
ton OF the citys proportion OF interest over what
| it has as bondholder.
But upon a careful examination of that subject
with the City Treasurer, am satisfied that if all
the bonds not held by the City were out, with all
the coupons upon them, the amount OF the over
coupons on the city bonds as to reduce the City's
interest to less than one half and l understand
the fact to be that upon many of the bonds of the
second mortgage held by other persons, the cou-
| pons were paid down to the same time that this
city coupons We're pad 80 1hat by no lp ossiblty
| tereBt In the road be reduced to less than con-
trolling interest This gentlemen, in my judg-
| safety and we obtain all that belongs to us; we
| obtain all the property which we can have under
the foreclosure OF any other way because we get
Now what is the plan proposed as substitute
for this? had watched with some interest and
care the progress Of the proceedings for fore
closure. [ thought that the problem relating to
| the Portland and Ogdensburg X. Il. Company was
ba wa this
that the city and the other second mortgage bond.
holders when they got all they could have, and all
suit and never heard until quite recently, about
the time it appeared in the newspapers, that any
| Otner plan was UnOuSnC Oh OF proposed. But tnere
has been another plan proposed which has been
formulated in report OF a committee OF the sec
ond mortgage .bondholderS, land of course it is
necessary to consider what are the relative merits
| of that plan as a substitute for the foreclosure.
| This plan which Is now proposed, is first, to is
sue ST BOO 900 OF preferred stock under an act OF
| the legislature of 1878. The plan contemplates
keeping alive the original charter, keeping alive
this old corporation as it is now but issuing pre-
ferred stock in the snm Of 81 100000 1900 shares
| of which would be held by the city, and the rest
divided pro rata among the second mortgage
| bondholders, the third mortgage bondholderS and
the unsecured debtors. The plan then proposes
to mortgage the road for all it is worth, to make
the mortgage as large the resources of the road
| will permit. Now, in carrying out that scheme it
| proposes to take the S250,000 of receivers in
debtedness and swell that to 700, although
see by the amended report it is reduced to $780,
900. Having swelled 1t to that amount instead of
treating it as temporary Indebtedness to be paid
for as soon as possible, they propose to fund it
and make it prior lien, and pay interest upon it
for twenty years. That is the first part of the
scheme so far as the mortgage is concerned. The
second is to scale down the second mortgage bonds
to about % per cent of their value, and make a
third mortgage of $970,000, and give the city its
proportion OF this third mortgage.
Now, gentlemen, confess l cannot see what
the object of this scheme is, In the first place
what do we want of a million and a half of nrp-