Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1896-03-27
RECEIVERS APPOINTED
For the Central Vermont Rail-
road Company.
The Action Brought About by the Grand
Trunk COmpany---H Balance of s4I5,-
900 Said 90 he Due the Plaintiff

the United States courts of Vermont Massacbu.
sets and New York to place the Central Vermont
railroad company in the hands of a receiver. c.
NJ. Hays, general manager of the Grand Trunk
railroad and +. c. Smith, president Of the Cen.
tral Vermont railroad company have been named
as receivers Their appointments are in the
equity suit brought by the Grand Trunk railroad
against the Central Vermont to settle difference
in traffic balances. Bonds were fixed at $4,000
The action in this case grows out OF the filing of
a complaint in the United States circuit court of
the district Of Vermont, in which the plaintiff
company seeks fore closure of an equitable lien
upon the gross earnings of the defendant com.
pany 1t is claimed that since 1884 the defendant
corporation assumed control by lease from the
Consolidated railroad company of Vermont and
other corporations Of the Vermont and Cana a
and a number of other railroads COMPOSING the
vermont Central system, and that it now has
about S2S,JOOOJO worth Of bonds outstanding
upon which no interest has been paid. The bal
ance due plaintiff on March I, 1896, under its par
ticular lien, is alleged to be SIlJ112
In its answer the defendant company admits
the validity of the lien, but asks that the plaintiff
be required to furnish proof as to amounts due
lhe Grand Trunk railway files an exhibit in
which 1t alleges that the Central Vermont railroad
company Is IN such financial condition as to he
unable to meet It's just obligations as they mature
during the next 30 days. The Grand Trunk al
leges that the Central Vermont is its debtor 10 The
extent of Silj a. for traffic charges and that
while il has had at all times since ,IuIy lsql sufi
cient money, the Central Vermont railroad has
refused 10 pay the same, and has wrongfully an.
propriated the money for other uses Sainst the
protest of the Grand Trunk railway. The Grand
Trunk also alleges that through mismanagement
the Central Vermont has incurred an unsecured
debt. amounting to more than S2,OO0O 900, which
the Central Vermont is unable TO pay as il ma
tures and becomes due. Another allegation is
that the interest on bonds Of 500 tOO held by the
Grand Trunk railway, becomes due July l. 1896
and the orator claims the defendant will not be
able % meet the same, owing 70 the depreciation
OF market values
With the papers in the case is a very long docu.
ment entitled exhibit, which recites the relations
of the Central Vermont and the Grand Trunk IL
says, ia brief: The Central Vermont railroad was
constructed from Burlington TO Windsor in 1850
The Vermont and Canada railroad was construct
ed from Essex junction to Rouses Point n Y,
at about the same time, and was leased to the
Central Vermont II perpetuity. In 1855 both
roads were placed in the hands of receivers by
the court of cbancery Of Vermont, and were ope-
rated under direction of the court until 1888.
During this time a most protracted and vrulent
litigation was carried on, and enormous expenses
were incurred by the receivers in the administra-
tion of the property In 1888 litigation was
Drought To close by compromise. and a tore
closure Of the first mortgage was had. new
company was organized under the laws of the
state ot Vermont, known as the Consolidated
railroad company of Vermont, and it thereupon
became vested with all the rights of the Central
Vermont and the Vermont and Canada.
On June :, 1873. the Consolidated railroad com
pany mortgaged both roads to the American Loan
and Trust company in Boston for s.. 600 OJO for 80
years, with interest at five per cent. ON June 80
property for 90 years, agreeing to assume and
meet all liabilities. Ou June /. 1856 the Consoli.
dated railroad took a lease of the Ogdensburg
ard Lake Champain railroad, extending from
Rouses Point 10 Ogdensburg, distance of lis
miles, for period OF 20 years. on June 10. 1886
the Consolidated railroad assigned the ea, to the
Central Vermont railroad On June 30 lSSS the
Central Vermont took a lease of the Misssquoi
Valley railroad, from st. Albans to Richford, a
rental of $4,000.
On May l, 1889, the Central Vermont took
lease OF the Burlington and Lamoie Valley rail
road, extending from Burlington to Cambridge, a
distance OF "a miles, for % years at an annual
rental of $4,000. On July ]. 1857 the Central
Vermont took lease of the Montreal and Yer
mont junction railroad, extending from Vermont
Junction to within two miles OF St Johns p. o.
for y years, at an annual rental OF $4,000. ON
October Il, 1891, the Consolidated railroad took
lease OF the New London and Northern railroad,
extending from Brattleboro through Massachu
setts to New London, Conn, and including the
Brattle6oro and Whitehall railroad, total dis |
tance of 51 miles, for 90 years for S2lOOOO This
also included the line Of steamboats, between New
London and New York city On December O 1891
the Consolidated leased the same to the Central !
Vermont On June l. 1889, the Ogdensburg and |
Lake Champlain road took a lease of the Moira |
and St Lawrence railroad for a term of 800 years
for $4,000 and the Central Vermont took pos
session of it,
About 1882 the Central Vermont became the |
owner OF all the capital stock and substantially |
all OF the bonds of the Stanstead Shefford and |
Chamblay railroad company, extending from St |
Johns p. O., to Waterloo, =. O., distance of 43 |
nually interest amounting to S175l.S 50. In 1888 |
the Central Vermont became possessed of the |
Ogdens.69vIg % v ira transit company; with capital
stock OF $4,000. On January p 1893, the Central
Vermont executed chatte mortgage to William |
Seward Webb trustee to secure S5OOOOO of |
bonds of the company, all Of which bonds are
contains provision permitting the mortgage to |
seize the property Of the Central Vermont in de-
contracted with the National Car company for |
the use OF nearly 1000 cars, paying mileage COM
pei sation monthly, and in default thereof, the |
National Car company may withdraw the cars, |
thereby deprving the Central Vermont company |
OF large part OF its source of revenue The Cen
tral Vermont company has also similar contract |
with the Wagner Car company.
All leases contain clauses for reentry for nom |
payment, whereby forfeiture would be occasioaed |
IL payment is not made according to lease The |
Grand Trunk railway alleges that it is a creditor
of the Central Vermont TO a very large amount |
That it holds about 100000 in bonds of the Con-
solidated railroad, the interest which becomes
due July !, 1896 and of which the Grand Trunk |
has used $4,000 as collateral for its floating |
debt, TO be returned July !, 1896 That 1t holds |
81 100000 Of per cent mortgage bonds of the |
Central Vermont, dated December l, 1892 as col |
lateral security for $4,000 bonds of the Consoli-
dated railroad and also a lien on the net income |
OF the earnings of the Central Vermont, after
payment of interest on the S. 900 900 bonds of the
Consolidated railroad company.
That there are balances due IL by the Central |
Vermont, which amounted on July /, 1894, to $40
900, in the ordinary exchange of traffic that the
balance constantly increased against the protest |
q
amounted to $685. 4SO, that since January the |
balance has still further increased till March l. |
1896, 1t amounted TO S4157l2, wholly due and un.
paid. The Grand Trunk alleges that the Central |
Vermont has had at all times since July /, 1894, |
gross earnings sufficient TO pay the balances and
has neglected and refused to appropriate the |
sum for payment of them, and has wrongfully |
appropriated the same to other uses and pur- |
poses. That the Grand Trunk holds promissory |
note of the Central Vermont railroad, payable |
April g. 1896, in the sum of $l14775. That the |
Grand Trunk holds about 100000 of per cent |
bonds of the Central Vermont, to which the ora |
tor is entitled, but which have not vet been de- |
lyered by the defendant.
The Grand Trunk alleges that go per cent of |
the through trafic of the Central Vermont is |
reached by the Grand Trunk That the suspen- |
sion of traffic connection between the two roads |
would intiict great injury on the business of the |
defendant and imperil the integrity of the sys- |
TEN as going concern, but that unless the traf- |
hc balances accrued and accruing in favor of the |
orator are paid, and said lien upon the gross |
earnings is enforced for the orators protection, |
such suspension of traffic connection is inevita-
BILE. The orator believes that large unsecured |
debt has been incurred by the Central Vermont |
on account of the Hartford bridge accident, the |
double tracking of portions of the road the |
building OF many iron bridges, etc. and the ora |
tor believes that the debt amounts to $1,000 900, |
and the orator also believes that the defendant is
unable TO pay the same as it natures and be- |
comes due.
The orator asserts that it has been informed |
that some of the creditors to whom the defend |
ants are liable for large amounts pressing for
immediate payment and apprehends that some |
will bring suit and levy attachments on the roll |
ing stock and funds Of the corporation; that a |
large part of the trafic the road consists of
the transfer Of grain from Chicago TO Boston, the
that by far the larger part Of this freight money
Is collected in Boston; that large sums accumu-