Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-04-20
Millions of B. and O. Funds Said to
Have Disappeared.
SENSATIONAL DISCOVERY OF COMMITTEE
Consolidation ofB. andO and South
ern Roads a Foregone Conclusion.
ROADS FINANCIAL CONDITION

What has become of SO, coo belonging
to the Baltimore and Ohio Railroad Com
pany is the problem which confronts the
reorganization committee of that great cor
pCrat:on, and until the mystery is cleared
UP no practical steps can be taken toward
getting the system out of the hands of the
receivers and the courts.
The information given IN Baltimore
yesterday 10 a Star reporter by a banker
who is on terms of closest business and
social intimacy with the Baltimore men-
bers of the reorganization committee that
the latter were appalled, by the discovery
made during the last few days that be-
tween 1883 and the time of the election of
President John X. CoweD at least 10000
COZ of Baltimore and Ohio securities were
disposed of in a manner that did not af-
ford proper returns to the treasury of the
company.
OF this amount the floating debt was in
creased, by cause yet nexplaned
from about s3,JJOOOO in 1SsS to about S16,-
Upo,O3o, a total of about S12.50U,Oa0 at the
date of the last annual report in 1S95
While regards the remaining $1,000 900 it
IS shown by the authorized statement below
that up to this time there has been moth
ing whatever learned as to what became of
a good portion thereof.
1t is alleged that from the total sum
great amount, probably s3,OO0,GGO, has been
taken from the company without giving
any value whatever therefor.
1t is also sand that so far there have been
discovered no records of these most i'm
portant transactions during the seven years
covered by the administration of Mr. May
er, and il is alleged that either no books
concerning them we're kept or that they
have been placed where the committee has
not been able to see them.
Upon learning this state Of affairs, the
menters OF the committee decided that the
whole truth must be brought out and thew
nave determined to sift the matter to the
bottom, let the blame fall where it may
Mr.. Mayer Not Accused.
It is stated that no one who is cognizant
of what the committees views on the mat
ter are believes that ex-President Nav
er profted to the extent of dollar
by what took place as the result of the
deals made or that he knew what really
was going on.
1t is not claimed that the twelve and
half millions of increase of floating debt
represents the loss of that amount by the
b. and O., but it is stated to be the opinion
OF the members of the reorganization COM
mittee as 1t is also alleged to be the belief
OF bankers who are conversant with B. and
o affairs. that in the neighborhood of
$',O6,oO has gone into the pockets of par
ties who were in no way entitled to 1t.
Preventing Disorgnnixa ton.
Despite reports to the effect that there is
a want OF harmony between the members
of the New York committee Of reorganiza-
ton and the members of the Baltimore COM
mittee. it can be stated that perfect under
standing exists between the two commit
tees, and the determination has been
reacned between them that the Baltimore
and Ohio system is too valuable property
TO be allowed to become dsintegrated, and
that 1t must be kept intact at all hazards.
1t is stated that there are a number of
hondholders of the road who would be glad
OF the opportunity 20 go into court fore
close their mortgages and compel the dis
solution of the system but as fast as the
coupons become due the payment is prompt
Iy met. The money for some of these cou-
Pons IS furnished by j. Pierpont Morgan
Il Co. but Brown Bros. & Co., Speyer Bros
and one Of the large trust companies all
located in New York, are also interested
ana e2ch takes its turn in coming forward
with the necessary funds.
y rev weeks ago there was an impression
that the Baltimore and Ohio receivers
could make some sort of deal by which
the Wabash road. through George Gould
would come to the relief of the Baltimore
and Ohio, but much as this plan would
nave pleased certain large holders OF Bal
umore and Ohio stock the idea has it is
SAID been abandoned. Although Mr.. Nor
gan has gone south for an indefinite stay
ana President Spencer of the Southern
Railway Company is announced as ohout
10 go TO Europe for three months stay
those who know what is taking place in
railway circles say, as was predicted in
ne star several months ago, that the
cohSoldatlon OF the Baltimore and Ohio
and Southern Railway companies is a fore
gone conclusion. and except that physical
means have not been provided for the
transfer of trains between the two lines
around Washington, the union of interests
fact
Every dollar needed to meet Indebtedness
the default of payment of which would
result in attempts being made to fore
close on the Baltimore and Ohio. is fur
nishcd either by the banking house of
j: fierpont Morgan & Co. or those who are
closely identified with that house in South
ern railway affairs, and Mr.. c. Morton
stewart: the great sugar importer of Bal
tlmore, is conceded to be Mr.. Morgan's per-
sonal representative on the Baltimore com
mittee of reorganization.
Underlying Causes.
y member of the latter committee stated
yesterday that ''the published reports since
1888 made to the stockholders of the Bal
un0re and Ohio Railroad Company do not
furnish much of the information that is
now requisite in order to devise a plan of
reorganization, which can be recommend-
ed as promising lasting benefit and as
Just TO the holders of bonus and stocks con-
cernlnS the operations of the company dur
ing me past seven years. and it is obvious
that II any plan were based upon the
present condition of. the company without
obtaining full and accurate KNOWLEDGE of
the causes which have been operating
finally resulted in the present disaster, such
plan would not only be rash and incom-
piete, but likely itself 10 misfortune in the
future.
The bare facts that from 1888 to 1s95 as
shown by the annGal reports of the COM
pany, the rolling equipment not Included
in the car equipment trusts decreased in
value Sl,S2O53; the engines decreased in
number from JSi to 502, and the cars of all
classes were in the aggregate 4,O9S less in
number in 1873 than they bad been in 1855
while during the same period the cost of
read only increased to the extent of about
S36o,GO0, are of themselves sufficiently i'm
portant and significant
But when they are considered in connec-
lon with the further facts-some of which
do not hnd place in the published reports
that between September 30, 1883 and
march l. 1885, the floating debt has increas-
ca from about S,J00.COO to about SIG OOO OOO
anu Jhe common stock has been increased
by the sale of 10000 shares producing
Ahout SlOnn ON. that s. zoo non % .as-...aI