New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1889-05-09
DEFAULT IN INTEREST.
rpsErrrNG A COTTON BELT" PLAN.
PAYMENT or INTEREST on THE ST. LOUIS
ARKANsAs AND TEXAS sroPPED-AcT1oS
- -. rr->-,rn II TIP Irsyr COMPANY

ARKAYsAs AND TEXAS sroPPED-ACTIoS
or THE CENTRAL TRUST COMPANY.
cor.,asrab,s comment was caused IN Wall Street
vost.,dav bv the default IN interest on the first
ortgage bonds OF the ST. Louis, Arkansas and Texas
p.IITay Company. on May l the Mercantile Trust
Company began paying the somLannual coupons then
due but on Tuesday afternoon payment was suspended
nv order OF the trustees controlling the railway The
amount Of interest due on May was s4SS2Io
There had been paid about one-thlrd of ibis sum-
according TO the statements from the trust company
or about 100000 according TO other sources OF nor
nation The stoppage Of payment was the result OF
notice served By the Central Trust Company trustee
under the mortgage, declining TO recognize - opnG%
tons against itself any payments made oy INC heT
camille Company.
The first mortgage Of the 81. Louis, Arsansss ana
Texas Road popusrly known a. the "Iot'on bei'
Roads IA held by the Central Trust Company which
lis jssnsd bearing certificates which are OBJ
uc,pIons AGAINST itself rs trustee According 10 rep
rssenta,ions in behalf OF the Central Company Jus
officers learned that the Mercantile Company was not
cancelllng the &" Cotton Delp coupons as hoy "eIe
maid and falling TO secure upon demand me Ps"
coupons formal objection was made to iaither pay
nent IN order 10 protect tho interests oi the TRUSTEE
Tho Central Trust Company does NOT object
3, the Mercantile Company performing the c"roH
,. ~ casbIDg tho coupons. but It claims the right
n, controlling the coupons for cancellation mo
counsel of the Central Company was instructed W ornE
anti for the recovery of the coupons alreSlS pau w
the Mercantile Company II they were ho' su''eh"o'o'
within a reasonable time, II was inemated now
ever by friends Of the Gould interest whloh ho" Gun
,o,s the Cotton Rclt Road, that negotiations were IN
- rrh,cb Uoud avert the danger Of litigation
President :. W. Foriyce, Of tho railway company
and It's counsel are expected TO arrive hore from the
West to-day 70 consider tho complications
A punber Of circumstances remained tneNpiainoa
vcsterlay The Mercantile Trust Company p"o 'ne
November coupons OF the railway bonds WltAou' Old
lection on the part OF the Central lr"st N'a,P""'
The payment at that time was advertised whlio no
nr.rous notice was given at this period OF interest
n.rrnsnt IN the public prints Tho suSpicons' or IN
tormsuon OF the Central Trust Company ana sdnh
sons from the Could interest polni 10 inc p''uHo'nS
that the coupons tn be retained a. s."i'S iVl
money advanced to meet them. IL CVuiu NV 20
,ca,rcd who had advanced the funds put the gone"
impression was that they came ron s'"o ~ ~
,,ns,ees NJ the Cotton Belt Road Ihesc arc Nus''h
Sage George Gould, LoHs t'"s'''
nell and y. Gcrnshelm.
The control Of tho railway was secured W o''oosl
,aaa I'm the interest OF Jg" Could through mo Pui
chase by him and Russell Sage OF over Eo'oO 5o(
second mortgage bonds for which ABOUT S-''0''U0
go Ia +, cash. The company At that time nceo'd
money for improvements, and the pir'haS",, W -,
hor3s were given threo out Of the controlling oo''u
-, Dc ,r,,s,cos After the transfer OF control was
-, the Mercantile 7r1lst Company vas Instructor
% nay tho interest falling due In Novcmh'r' INV
or,s ~ the railway company show that In Tho pa''
vcar no material part OF the interest on INC "'N'
r,ortrago was cleared, earnings having boon pun w"
,mproycmcnts Of tho properly II Is 'npPo,'H w
some Wall street soopiics that the present
- tho nroperty Aro seeking a scaling down OF IN
-, I'D a REORGANIZATION Of the company unh'r
,,,rr.r burden OF obligations some friends oil ths
,.,, nv that any such scheme will b. r"s''rh' an"
,b, I, will L. discovered that Mr.. Gould cannot u'o
the property at his VIII -, -,
Edwin Gould said yesterday that th' ""'''H va
rho railway supposed that Arrangement, n" ueeh
made for the payment Of the May coupon ""' 30
ho n,on uiscarried Russell Sage also sros' Z"
hitch I'm the arrangement for mN'thR t' '''',,'
,,, h. declined 10 explain what the hitrh OF inc
- ,rr,nvemcnt- was lie thOuyht Il would b" ihaH
y,s.bte IN uuhlsh any thing until President F"uS''
h,a arrived and consulted with representative {" NV
bopdhoIdcrs Every ono knew that somebody hS' =.
advance the money for the inprst' ana he uout'.
II was a mistake to Interrupt the payment N"''" "a
| been going on. -, c,r,i
r,,,st Cor,n,pv said that his company having been
t,,o,,,cl that ,be coupOns were bring pRh oy h'
Mercantile Trust Company and Vrre not b''hS 90"
cellel when paid. but were held rs SECURITY io' Wv
au,ruDt advanced for the payment OF Tho interest," s
A notice TO the Mercantile Trust Company H'hA"'''s
| M OF the coupons WhNb nd'A ''''' F''' So
,,osc ~ CANCELLATION by the Central 1r'st Company
| s nr,vbici by tho trims Of 'he murt9aRr. lie sac
thai he vas informed that about 3notnrn % rs sI
| rnUnons rad leon paid and that they Ncrp ~
| sI,vcS IN bc held by tho parties Who %FaWrH Ll'
money for payment ~ tho Interest. No Fopy va va
received % Tho demand m%le for nc COUPONS a, h.sl,
Central Trust COMPANY instructed iis c'nhh. ~ U.s..
suit against the Mercantile Trust I2nIsn' ,Srcr,'
| rec overv Of the cunpJns II they were nor detEun
within reasonable time This actlon o. Ihe ,s.'' q
Tst Company was simply 70 project ,hSm'S Tb,c,
| ,stees undrr tho mortgage, from any uahhy "h"'
| might arise on the uncAncelled roup,,-. 49,
| prcsIdcnt Louis Fitzgerald, Of On" hcrranun IIa
| Cofnptnv sad that nc hat not rrceNSl ANY u p.p
directly frtrn tho Central Trust company We ~, ~
Smt tb,t letter had been written 10 the ono h6 OF i
| e. iouis, Arkansas and Texas Company, demhnIih
y0escssI1u nf tic coupons, 81 which copy was e"ht
| ~ - o., ~ hfs com pauy. Immediately on receipt .
tho COPY letter payment ~ the coupons Wa sn'P,mnc
| tvn ssA that Bis company had received on leppsl
suFcisnt cash TO pay the whole OF tho interest an
| that while tho coupons were MOI chrc,t-' % ~.
| 90 All they would have bern eventn@Iv; hut ma
a, nresnnt they hold ne secETity 1or INC n"ns
ADVANCED tn ricet tho interest as zen assl>l w
r,urnsd but not as against the trustees OF INC mOri
| gage.