The Wichita daily eagle. [volume] (Wichita, Kan.) 1890-1906, 1896-06-02
JUDGE KILGoREs RECEIVER.

The Financial Chronicle calls atTen
ton TO curious sort of receivershiI
in the Indian Territory, instituted fol
the purpose Of building a railroad
Most receivers are appointed TO wind
up, sell. and reorganize enterprise:
which have got into difficulties; this
one is called upon TO start an under
taking which is not In existence ex
ccpt on paper. The Denison and
Northern railway is the line: there are
10 be 104 miles of it, and Mr.. Moran
Scott has been appointed by Judge
Eilgore in the United States court for
the southern district of the Indian
Territory as receiver. and directed to
build, equip, and set it going.
In May of last year, il seems. a con-
tract for building this road was given
10 firm of contractors, but they did
not build it Debts OF some kind, how
ever, have been run up. and the cred
itors have bethought themselves of
this powell way of securing their debts.
The creditors are presumably interest
ed in the enterprise otherwise than as
mere holders Of claims against the
road Possibly the receiver has been
appointed in the interest of the pro-
jectors and owners of the road.
No receiver, however, can build a
railroad without money; and Mr.. Scott
has consequently been authorized to
issue receivers certificates al the rate
OF $1,000 per mile. which are 10 be
subject TO existing debts, a first-mort-
gage lien on the property (as soon as
there is any and the franchise; these
certificates are 10 be registered by the
court and have the clerks signature
and seal. He is TO sell them at par,
aud with the proceeds buy sixty-pound
rails, lay the track with them, purchase
10 box-cars. 4 cabooses, $50 gondolas.
10 hand-cars, and repair tools, provide
telegraph and telephone lines, build sta
tons and water tanks, and finish the
whole line by January 1 OF next year.
OF course these certificates do not
add anything TO the value Of the prop
erty. The reason why receivers GER
tificates are ordinarily salable is that,
being issued to provide money to keep
the road running. they are made TO
come ahead of the stock and bonds,
and very properly, because otherwise,
In the case Of insolvent concerns, they
could not be kept going at all, and by
this time the stock and bonds and all
conditions would be injured But here
there is no property, and the certifi-
Gates are a mortgage OF property and
earnings yet TO be created. The prop
erty depends entirely for It's value, and
indeed for it's existence, upon the sale
of the certificates. VIII anyone take
them merely because they have the
seal OF a United States court who
would not as readily take bonds
The New York Evening Post sartaric-
solved by experiment. and II the ex-
pertinent succeeds, there seems no rea-
son why receivers should not be ap-
pointed TO start not only railroads, but
banks, factories. mills, hotels, newspa- |
pers, or even promising young men |
just setting up in business. What |
could be more praiseworthy use for |
their creditors to make OF the energies |
NJ court than to provide little cap
ital for bright, hustling young fellows
who want to push their trade by con-
yerting themselves into stock com
panies with limited liability? How
much more benevolent this would be
than the present use of judicial process
10 extract from insolvent persons and
information on the subject /
Of their resources by way OF supple
proceedings for the purpose
IF winding them up or selling them out!
That the practice is in conflict with
he principles of jurisprudence recog-
1iZed as existing outside the Indian
Territory, is true. Courts hitherto have
been used. for the purpose OF floating
but of administering jus
ice. When they intervene in the case
# insolvent concerns at the instance
IF creditors, they only provide means
o keep them going. in order, as We
nave said, 10 see that the creditors and
stockholders get justice. Railroads
Ire built by means OF capital and labor
- a speculation enterprise, and the
- 81 - - c%f~ FaTn |
pecUistion and attract capital and La
)Or 10 engage in an enterprise which
nay turn out wholly Improbable, and
hus. having been called into existence
" one receiver, require a new receiver
hip 10 wind II up, is something new.
( receiver can be resorted 10 10 build
new railroad. surely, too, be should
,ontinue to run IL until IL is clearly able
o pay. its way. For this purpose he
sGuld have TO have power 10 issue
and freight tariffs, 10 make
rates" AT competing points and to
.et up summer excursions. until il was
established that the road
vas in 10 danger OF insolvency. To
udge by the history Of many roads,
his would lot infrequenetIy be a long
Inc In fact some roads might al
rays be IN the hands Of receivers Il
BE sane way. a receiver empowered
D start 4 mill would need power -
end out drummers 10 get orders for the
Gods. and 10 apply 70 congress for
efficient amount Of protection: the
eWspzPer receiver would have 10 !
cour the country for ads AID make Z