Evening star., 1896-10-31
BALTIMORE AND OHIO
Rumored That the Road Will Be Taken Out
Of Receiven Hands.
The Earnings Have Been Satisfnctory
ANSWER to the Johns Hop
kfns Suit.

A rumor has obtained extended circula-
ton in the west that the Baltimore and
Ohio Railroad Company has been so pros
porous since 1t went into the hands of Re-
ceivers Cowen and Murray that il will soon
be reorganized, with Mr.. Oscar G. Murray,
who is now looking after the actual opera
tions of the road, as president. A move
made yesterday in Baltimore by the Mer-
camille Trust Company of New York, which,
with a syndicate of bankers associated
with it, is taking care of the interest on
various issues of bonds of the b. and o. as
the payments become due. seems to make
clear what has been the impression in rail-
road and banking circles for some time
past, that the road is likely to remain
under the supervision of the United States
courts for considerable period to come.
The incident of yesterday above referred
to was the filing of the answer of the Mer-
camille Trust Company for itself, and as
trustee for other large security holders, to
the suit of the Johns Hopkins University
trustees, the latter having petitioned the
United States court at Baltimore asking
that the receivers of the Baltimore and
Ohio Railroad Company be made TO nav 6
per cent dividend on the 81, 100000 invested
In the road by the Johns Hopkins Univer-
sity, on the ground that when the trustees
bought the stock of the b. and o. it was
expressly understood between the parties
interested that the particular issue pur-
chased was prior lien on the profits of
the road.
AS in the case Of the answer of the re-
ce1vers of the B. and o. which was filed
several weeks ago as their reply to the pc
tltion. the answer of the Mercantile Trust
company contends that 1.-The stock held
by the university was no more entitled TO
preference than preferred stock owned by
any other institution or Individual. and
that, first of ALL the outstanding obliga-
tions must be paid. and then the stock
holders would come in for their share of
the earnings"
The Mercantile Trust Company also
ciaims that when the Baltimore and Ohio
Raliroad Company was organized 1t was
contemplated and provided that it should
OBTAIN the capital necessary for its pur-
poses, as well by the exercise of the power
to borrow money and pledge its property
1or the payment of the same and its inter-
est as oy the issue and sale Of stock
continuing, the answer says: THE right
OF the company to borrow money, pledge
the property of the company and paw in
terest was not affected by the act of 1875
OF or .ne contract executed by the company
hereunder, by which it agreed to make
certain payments out of the profits of the
work or out OF the profits of the work as
declared from time to time, or out of the
gross profits of the company.
That the holder of such a contract c.p-
hot claim preference or priority of charge
either on property or income over The
ctedltors of the company holding claims for
y AISipoi VI interest OF mOney bOr-
rcwed of the company and used for tho o.
QUESTION of property from which profits are
70 ne derived, or holding claims arising ON,
OF the operations Of the company in the ef-
a,tt, artu 20 make make pronts So long the prop
erty or income of the company are required
10 meet the lawful demands of creditors
there are no profits of the work or of tho
unuertaklng. or of the company to which
can attach 'he pronts
nat the petitioner herein Ohe trust.as
VI .ne Jonns Hopkins University will he
snsiiIea 9, ,na,l 10 no payment, on account of the
ccme he't IN tho oy II. out OF the property or in
baitlmore and Ohio until the claims ~ aI,
me me creditors of said company who arc en-
ulied 10 demand payment are fully maid
II Is further stated that mo profits have
accrued to the company from January I ~
June 30 1896, which could be distrihntad -
.ne . petitioner and the other preferred stock
noiders without prejudice to the IawfnI
rights of creditors of the comnanvm
The answer also adopts as a part of its
owh the statement made TO the court by the
RECEIVERS several weeks ago. that during
.he iast SIX months of the fiscal wear end
Ing June 30 the expenses of the Raitimnr.
ana Onlo company, including the fxed
charges were nearly 81 400 600 greater than
ene receipts, and that consequently there
couid De no profits during the period for
which the Johns Hopkins University truS
tees asked that dividend be paid on their
stock in the road e'
An answer precisely like that of the Mer
cshtile trust Company was filed on the mart
OF the corporation of the Baltimore and
Ohio Railroad Company.
Notwithstanding the heavy falling off in
the receipts of the company. as stated by
the receivers, those officials have made
provision for the protection Of the follow
ing securities, whose semi-annual interest
falls due tomorrow: Morgan sterling loan
payable in London. s2a3. 900: Baltimore and
Chic equipment. series b, payable in Phil
adelphia, $4,000; Confluence and Oakland.
payable in Philadelphia, 5000: Baltimore
and New York, payable in New York
ST, S25: Baltimore Belt railroad. first mort
gage per cent bonds. coupon amounting
to about s15o,OO0 payable at the office of
Brown Brothers & Co., in New York