The Indianapolis journal. [volume] (Indianapolis [Ind.]) 1867-1904, 1895-03-20
A ..FRIENDLY, PROCEEDING.
Receiver Appointed for the Long
Island Traction Company.


Island Traction
NEW YORK, March 19.-Horace J. Myers,
of the firm of A. NJ. kidder & Co., has been
appointed by the United States Circuit Court
of West Virginia as receiver of
the Long Island Traction Company.
The appointment, as explained in a
circular mailed to the stockholders, is
in the nature OF a friendly pro-
ceeding, and to anticipate a movement for
a receivership originating in a quarter hos
tile to the reorganization plan formulated
at the meeting of the stakeholder held in
Brooklyn several weeks ago. The circular
asserts that a large majority of holders of
collateral trust notes have agreed to CO.
operate in the plan CT reorganization, the
condition being that s5co, coo be raised before
March %. 1t is the Intention to pay the OBJ
legations to the receiver instead OF the COM
peny.
The Long Island Traction Company was
incorporated in 1888, under the laws of West
Virginia, and capitalized at $50, 600, 600. The
deal which led up to this began some three
years ago. At that time the BROOKLYN City
Railroad was a healthy corporation, which
paid large dividends. It's bonded indebted
ness was enlarged to $3,0o9,0W and its paper
shares to $500, UeG, making a burden of ST.
O00 1900. Shortly afterwards the bonded in
debtedness was increased to Sc, sG0, 0c0 and its
paper Zap, capital i e sl2so 20 900; this s, increasing ,Grss Ing
motive power was changed from horses to
electricity. Those in control leased the road
for 80 years 10 a small corporation known
as the Brooklyn Heights Railway Company,
which operates a line from Fulton street to
Wall-street ferry, about a mile long, having
a paper capital of S29e.G0. BY the terms of
the lease this little company agreed to pay
the interest on the $6,eoo,00 in bonds. and
on the Brooklyn City Company, and to keep
the surplus for its stockholders.
The Long Island Traction Company was
organized later in West Virginia, for the al
legged purpose of evading the payment Of
the incorporating tax in this State on the
$50, ooc.O coo capital, which was mainly on
paper. This company leased the Brooklyn
City Company and guaranteed to pay the
stockholders 10 per cent. as an annual
rental. This rental was guaranteed with a
fund of $4,e00. 0o0, made up OF what was
known as collateral trust notes. The rental
of the City road was regularly paid, but the
dividend. The plan to reorganize was pre-
cipitated by two suits brought by p. III.
Flynn, a heavy stockholder in the Brooklyn
City railroad. which is leased by the Long
Island Traction company. One suit Is to
annul the lease OF the City road, and the
other is to prevent the traction company
from saddling any more debts on the leased
property
Wood Harvester Company Receivers.
ST PAUL. March 19.-The Walter A.
Wood Harvester Company went into the
hands of receivers to-day on the application
of the Evarts Manufacturing Company, of
Illinois. The petitioners alleged that the
harvester ~company's liabilities were more
than 10000, and that a large part of this
they were unable to pay. The petition also
alleged that they have given preference to
some creditors over others, and have bor-
rowed money on terms which give prefer
ences TO the lenders with large collateral
security. In conclusion, there is a prayer
for judgment for the debt due the Evarts
company and for the appointment OF a re-
ceiver. In the order, which is short and
very simple, Judge Egan says hat all prop
erty. wherever. situated, is to be assigned
and transferred to the receivers: that there
are to be no preferences. but the creditors
are to participate in the proceeds of the
receivership pro rata without preferences.