The morning news. [volume] (Savannah, Ga.) 1887-1900, 1895-01-09


5000
The sworn market valuation Of the
Savannah Street railroad and all its
property March /, 1898, as shown by the
returns 10 the controller general, was
$lA 295. The sworn market valuation Of
the Eclectic Railway Company and all its
property, as shown by the returns made
at the same time, was S66300. The CON
troller general declined to accept this re-
turn, however, and assessed the prop
erty at 500 coo.
The charter of the Electric railway was
amended by the legislature in December,
1893. and the right to increase the capital
stock TO 100000 was granted. and also
the right to merge and consolidate with
any other street railroad company.
Sept 8, 1898, the Electric Railway Com
pany absorbed, or attempted to absorb,
the Savannah street railroad, the con-
solidation or absorption, 1t is stated, be-
ing under some pretended legal con-
veyance between the two independent
companies whereby the Savannah street
railroad turned over to the Electric Rail-
way Company all of its property, and the
Electric Railway Company entered into
the possession and control, which IL has
since retained. The capital stock was in
creased to 100000, but it is charged that
this was not paid for either in money or
property at fair valuation, and the COM
t'etAAJ t.1'IA T-v'fNVt Va l4AE SADtks WHICH was
of no value whatever at the time, in buy
ing and paying for all Of the capital
stock of the Savannah street railroad,
which, at the time, amounted to $500, 900;
all of this stock was surrendered and can
celed. of the new issue Of stocks, besides
the $4,000 received by the stockholders
of the Savannah street railroad, the stock
holders of the Electric railway received
100000, and $4,000 was left in the treas
ury. The Electric Railway Company
agreed to pay to the Savannah Street
Railroad Company $4,000, to be applied
in part payment Of the floating indebted
ness of the latter company, which is
claimed to have been paid; 5000 in cash
and 5000 in notes, which it is claimed are
still unpaid.
At the consolidation each of the two
companies executed a second mortgage,
wherein each sought to secure the pay
ment of the $4,000 first mortgage bonds
previously issued by each company by
making the property of either company
liable for the payment of the bonds of the
other subject to the bonds first issued by
each company.
Said pretended security" the petition
says, was and is illusory, and in fact, is
no additional security whatever to your
orator or any holder of the bonds of the
Savannah street railway, by reason of
the other insecurity of the property mort
gagged to secure the bonds then issued and
outstanding by the Electric Railway Com
pany; and this was well known at the time
by said Electric Railway Company"
The destruction of the power plant of
the Savannah street railway by fire is
mentioned in the bill. The plant was in
sured for $4,000 The amount collected by
the Electric Railway Company was about
$4,000. The Electric Railway Company is
charged with misapplying this insurance
Of, refv TO
chase additional property or another power
plant, 5000 was used in paying off in part
the note given to the Savannah street
railway, about $4,000 in repairing the road
bed of the Savannah street railway and
the remainder in the erection of a car
shed.
The combined market value on March l..
1894, of all of the property of the two COM
panies then consolidated, as shown
by the sworn returns of the
president of the Electric Rail-
way Company to the controller gem
eral was only S142 1876. The Savannah street
railway has not paid the state taxes for
1893, and the Electric railway has not paid
its taxes for 1894. The coupons upon the
ten bonds of the Savannah street railway,
owned by Mr. Perear, due Dec. I, 1898,
were not paid at the time payable and are
still due. The coupons due June 1 and
Dec. l, 1894, were not paid on demand and
are still in default.
The bill recites that recently the stock
holders and most of the bondholders Of
the two roads prepared a plan of reor-
ganization. 1t states that the plan is
inequitable in Mr.. Perear's opinion, and
he has declined to assent to it. He
charges that the plan, even if assented to
by him and carried out would not finally
result in any benefit to him, but would
in fact cause him a greater loss, by reason
of the surrender of the unpaid coupons
and decreased interest proposed, but also
in greater delay in the remote possibility
of realizing even the decreased interest
proposed, and in the meantime the mort
gagged property, which is now the ONLY
security for his bonds, would be daily be-
coming less valuable by deterioration.
wear and tear and his Sc
curity to such an extent would therefore
be impaired to his ultimate irreparable
damage and injury. even under the pro-
posed plan of reorganization. He states
that the present mortgage indebted
ness of the Savannah Street railroad is
little less than S21. 900 per mile, and
that of the Electric Railway Company
before the consolidation, and now is over
$4,000 per mile, which would be decreased
under the plan Of reorganization so far
as the Electric railway is concerned.
to about $4,000 per mile, and increased
so far as the Savannah street railroad
is concerned, to the same figure. Mr.
Perear's position, unfortunate as 1t is
at present, would be still more unfortu-
nate, he says. under the reorganization
He says further that the plan does not
decrease the bonded Indebtedness, but
actually increases it, and does not even
by decreasing the interest charge de-
crease the total amount of interest to
be paid. The company, he charges, can
not earn the interest proposed by the
operation of its properties, after paving
all necessary operating expenses, taxes,
assessments and insurance, and provi-
ding for even reasonable depreciation.
1T would be manifestly unjust and in
equitable to compel me-" he says. ito
stand by and let the mortgaged prom
erty become less valuable and remain
in the possession of an insolvent com
pany and thus result in irrepara BILE
loss and injury" He declares that. bv
reason of the combination of the ma
jorty of the bondholders, he is powerless
to secure action in his behalf through
the trustee of the first mortgage upon
the Savannah street railroad, and that
he Savannah street railroad is utterly
and hopelessly insolvent, and the Elec-
-ric railway, since the consolidation, and
low, is in the same condition. and that