Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1890-11-26

ager MCNEIL, OF Ine oregon improvement
Company, when informed of the reported
application of a, receivership of his COM
pany, simply said: II don't know anything
about it, and have nothing 10 say about it. :"
From another well-informed quarter it
was learned that the trouble dates back to
tie close of Wizards management of the
company. When he left the company
there was q floating debt of several mill
ions, the existence of whsch could not be
explained. This debt has never been paid
of. When the first mortgage on the prop
erty wss issued the bonds were not imme.
diately sold. but were hypothetical to raise
money, ard the company was on the verge
of dsfaulIing in the payment of money and
going into the hands Of receiver, and
second mortgage for $15 100000 was given
last spring, and bonds we're issued, the pro.
ceeds Of which were to be used in building
the Port Townsend Southern Railroad from
Port Townsend, along the west shore of
Hoods Canal to Olympia, Seattle and the
Northern Railroad from Anecor.es up the
Skagit river to Hamilton, and the building
Of the Olympia and Chebalis valley road,
which was from Olympia to Tenino. The
last-nsmed road was to form part of the
Port Townsend Southern, which il was
proposed 10 extend finally to Portland.
These bonds were never sold, but were n.y.
pothecated in the same way SIS the first
issue. The bonds are now falling due, and
are unde stood to be the cause Of the trouble.
The Oregon improvement Companys
troubles are undoubtedly cue to the build
ing Of the railroads for the promotions of
townsite schemes and without the hope of
earning operating expenses. The building
OF the Port Townsend Southern Road, it is
said, has been used tc boom several small
towns.
RECEIVER APPOINTED.
PoRTLAED Or, November 25th.-In the
United States Circuit Court this morning
Elijah Smith and Prosper W. Smith of
New York, through their attorneys, made
application for the appointment Of re-
ceiyer Tor the Oregon improvement Com
pauy, organized under the laws of Oregon.
The spl LEGATION sets forth that in order to
secure the credit of the company under the
present financial situation, it is necessary
that g receiver should be appointed.
The application shows that all the prop
critics of the Oregon Improvement Com
pany are subject 10 liens. The first lien is
what is known as the first mortgage of the
company, made 10 the Farmers Loan and
Trust Company as trustee and dated De-
Gem Der l, 1880 and the second is what is
known as the consolidated mortgage of the
Oregon Improvement Company, made to
the Farmers Loan and Trust Company as
trustee, aud dated November l, 1899 The
first mortgage was made to secure the issue
OF 5000 900 first mortgage bonds. payable
Deem Der l, 1910, with interest at per
cent, payable in December and June
Bonds secured by consolidated mortgage
to the amount of s. 514, 900 of the plinci.
pal, being equal in amount to the entire
amount outstanding of the first mortgage,
are now in possession of the Farmers Losn
and Trust Company of New York, as trus-
tee. Consolidated mortgage bonds to the
amount of $500, 900 are outstanding. Loans
to the amount of S1,750000, secured from
individuals aud corporations will mature
in few days. Many Of these loans are
held IN New York city. All of the first
mortgage bonds are now outstanding ex-
cepl about $500, 600 that have been retired
and Cancelled by the operation of the sink
ing fund provided for in the mortgage. The
interest on the outstanding first-mortgage
bnnds-being 3 per cent. on about 81, 500,-
000-will be due the LIST of December next, |
aud that company will be unable to meet
the payment of the interest uHless the |
Court takes possession of the company's |
property. The consolidated mortgage was |
made and executed November l, 1889, to |
secure the issue of $4,000 600, payable in
1889, with interest at . per cent, payable |
in April ard October.
Owing 10 the condition of the money !
N ssket, it is impossible to renew the loans. |
For the past year the company has been |
engaged in the purchase and development |
of railroad lines in Washington, causing |
large outlay of money. The liabilities OF
the company are aboutS2 100000.
y decree was granted appointing Joseph !
Simon, of this city, receiver of the Oregon
Improvement Company. Bonds were fixed
at 100000.
THE COMPANY ALL RIGHT.
PORTLAND, November 25th.-J. c. Haines,
general attorney for the Oregon Improve
ment Company, said this afternoon The
object of the company, so far as it has
gone, is simply to preserve the integrity of
the present system and keep it together.
We want to prevent the company s property
from being broken into fragments and sold
under an attachment for fioated Indebted
ness If it is so broken up the sales thereof
would be ruinous to not only the stock
holders, but to the creditors as well. If
the company is not disintregated it can pay
Of every dollar OF its Indebtedness, which
will not exceed 81 900, 000 while the COM
pays property is worth at least $4,000, 600.
Tie situation now is that the Court has
Charge OF the company By virtue OF It's
officer, and sccorjiDglgno attachments can
b. levied against it unless the Court grants
the creditor permission to bring suit"
Receiver Simon will file his bond and
assume control of the company's affairs at
once.
MORE DETAILS.
SEATTLE, November 25.h.-The applica-
ton for the appointment of receiver for
the Oregon Improvement Company was
the one subject of conversation to-day and
tonight among railroad men.
There was a general agreement that the
"a roads, the building of which was the
i'm vuediate csuse of the company's difficult
les. we're oaly built for the purpose Of
booming town-sites and afterwards being
so 20 some Of the great railroad compan-
les The Northern Pacific declined an out
right purchase of the Seattle and Northern
Ioad. and was satisfied with a ninety-nine
years traffic agreement. The road had
however, served the purpose OF booming
property. 1t traversed some rich land on
the Sound, both agricultural and mineral,
and may soon become rich source of rev.
enue.
With the Port Townsend Southern the
circumstances are different.
Il is entirely isolated from any railroad
system until it is extended 10 Olympia,
NlstdLGS Oh cAEnAy mites. Tor nan lDlS
distance il would traverse the base of the
Olympic mountains aud would have to de-
pend for business on the products of bar-
row strip of land. The settlement of this
strip has only begun, sni while the mount.
aius are reported to be rich in minerals.
their development has not even progressed
SO far as prospecting, and all that is knGwn
is the result OF an exploration made within
the last year
The construction Of lGilIosd through
such a section offered no Inducements 10
practical railrosd men, sud il was found
ima,ssiblc 90 sell the twenty miles of road
from, Port Towns end to Rockers Lake.
Thas, the chance OF reseliing these two
roa Is disspp cared and the borrowed money
used in building them, instead of being
realized win profit, became a permanent
investments with only prospective profits
one railroad officisl found another CAUSE
of the trouble IN the variety of the lines of
business in which The Oregon Improve
ment Company is engaged. Ii is operating
railroads, steamers, coal mines, wharyes
and saw mills, requiring the services of
men of the highest ability in each Of these
lines 10 whom much must be trusted. as
the general officers could not be expected
to be familiar with every branch of the
business. Yet every proposal to buy any
one Of these properties has met with a re-