The herald., 1895-03-24
Electric Lines Changed Hands
Last Night
IR. TRUMBULL TALKS OF 1T
General Sherman Was Not Frozen
Out
The New Corporation Will Take Many I'm.
provements, and Try to Accommo-
date the Public

Morris Trumbull of the Chicago broker
age firm of Peabody. Houghtaling & Co.,
and who has been mainly instrumental in
J the organization of the Los Angeles elec-
trio railway system, arrived from San
Francisco yesterday, and at midnight
took charge of the company. Until the
men who have peen selected to act as
directors Of the new corporation shall
have made up their minds as to their
future plans, Mr.. Trumbull will remain
in charge. This. however, will probably
not be longer than two or three weeks.
Mr. Trumbull is fnancier of great
ability, and of an attractive personality.
Last January he came out here represent
ing the Chicago bondholders. who were
dissatisfied because their investments
were giving them no returns. He made a
very careful and extended examination of
the various lincs belonging to the sys-
tenn, and wrote a detailed report on the
matter. 1t was after reading and con-
sidering this report that the plan was per-
fected by which the road passed into the
control of the bondholders.
1.-The arrangement by which the bond
holders acquired control of the roads in
Los Angeles" said Mr.. Trumbull last
| night at the Westminster, was reached
without the slightest hard feeling on
either side. You know that there have
General Sherman was frozen out. Now,
that is not true. The bondholders had a
perfect right. on the 18th of March, to
close out the concern and take everything
for themselves. They did not do this.
| General Sherman retains an interest in
the company-in fact. is one Of the direct
ors of the new corporation. He is per-
| fectly satisfied with the arrangement.
Here is the substance of the communica-
, ton that Mr.. Sherman submitted:
To the Bondholders of the Los Angeles
Consolidated Railway Company:
Gentlemen: As you have determined
to commence a suit to foreclose the deed
of trust given and secure the payment OF
the bonded indebtedness of said company,
and desiring, if possible, to avoid litiga-
ton. hereby in lieu of all propositions
heretofore made, submit the following
offer for your consideration:
Upon the creation of a new corporation,
as hereafter provided, l will procure the
immediate execution of a lease by the
Los Angeles Consolidated Electric Rail-
way Copmany of its franchises and prop
erty. and the surrender of possession
thereof to said corporation. Under said
lease said new corporation shall control.
manage and operate the road, franchises
and property pending sale or foreclosure
proceedings under the deed of trust of
harmless the bondholders accepting this
proposition, said lease and said franchises
and property. from all interference by
or through the Los Angeles Consolidated
Electric Company, or on my own or its
behalf with the possession and manage
ment of said lessee, and with the execu-
tion by the trustees of the power Of sale
| given in said deed of trust and from in
| reference with any foreclosure proceed
ings which you may institute under said
deed of trust. will also at all times here
after to the best of my ability aid and
assist in the administration and manage
ment of said franchises and property.
Said new corporation, while operating
said franchises and property, shall have
| power to apply the income or any part
thereof on account of floating indebted
ness and receivers certificates hereinafter
named and and the said Electric Rail-
way Company shall be held harmless
! from said Indebtedness and receivers
certificates and also from all liabilities in
CURED during the operation of said road
| by the said lessee.
In consideration of the foregoing, the
persons and bondholders accepting this
offer shall proceed in good faith and as
soon as practicable to create a new cor
poration to take said lease. acquire title
to said franchises and property and oper-
ate the same. Upon the creation of such
new corporation 81 per cent of its capital
stock shall belong to the bondhoders ac-
cepting the offer and 40 per cent to me
and such persons as | may represent.
The persons and bondholders who ac-
cept this offer shall for three years after
harmless from any and all assessments
levied on said 40 per cent of the stock Of
the new corporation.
The new corporation shall pay such
floating debts as are specified on pages
and 10 of Mr.. Trumbull's report. Said
,%n hall ko 10
years, and upon the payment of said in
debtedness and the leasing of the col
laterals held by the various creditors
named in said report, the 115 bonds of the
Los Angeles Consolidated Electric Rail
way Company and the receivers certifi-
company shall become the property of
said new corporation or it's successors
and all other collaterals shall be returned
to me, and you shall procure the release
of the collaterals belonging to me on ac-
SON. son, the National Bank of California
Mrs. Kollenbeck, o. H. Churchill. Pea
body, Houghtaling & Co., Illinois Trust
and Savings Bank. Crocker- Woolworth
National Bank and Hazard Manufactur
ing Company within ninety days after
you have SO acquired the title to the fran
chises and property Of the Los Angeles
Consolidated Electric Railway Company.
| When the new corporation shall take
possession it shall hold us harmless from
the bonded Indebtedness amounting to
So, ,OO0 600. with accrued interest aggegat-
ing $180,000, the current Indebtedness
and from the Ferguson and Swoop suits
and the Davies claim.
''Ihis proposition continued ~Mr.
Trumbull, was agreed to by the bond
holders. You already know who have
been selected as the directors of the rev
corporation. They held a meeting yes
terday. 1t was the plan when left to
elect Mr.. Brown president and l believe
Mr.. J. 7. Burke, secretary of the San