Evening star. [volume] (Washington, D.C.) 1854-1972, 1896-09-02
How to Get Out of the Hands Of the
Receivers.
4 STOCK ASSESSMENT PROPOSED
Baltimore Committee May Want
More information.
ROAD IMPROV EMENTS

|
and Ohio Railroad Company out of the
| hands of the receivers and back again into
| those of its stockholders, so that it can be
| operated by a president and board of di-
rectors of their own choosing, is the opin-
ion of members of the reorganization COM
mittee of the company, as stated by one
| of those gentlemen last night to a Star re-
porter.
While" continued this gentleman, cit is
the intention of those most directly inter-
ested to prevent the publication of the con-
tents of the report of Mr.. Little, who
| made an expert examination of the books
OF the Baltimore and Ohio Railroad Com
pany, and thus keep the real facts from be-
coming known, New York bankers have
| learned some things connected with the
report which present a startling condition
of affairs, and l do not consider | am vio-
latinS any confidence to speak of them. The
fuli condition of the companys affairs will
not, 1t is probable, reach the light, unless
another examination of the books is made
this time at the inStigaton of the Balti-
more reorganization committee, who will, if
granted permission to do so, employ an
expert for the purpose. 1t is hardly prob
able that those at present in control of the
b. and o. affairs, especially it's financial
operations, will willingly consent to this
as it is very well understood in New York
that the Baltimore committee does not pro-
pose to be satisfied with anything short of
most exhaustive examination Of the
books and necessary papers of the Il. and
o.. and anticipate that the committee will
be refused when they request permission
from the receivers to do this. and will have
to get order from one of the courts
in order to carry out its purpose.
Encouragement Charged.
The report already submitted by Mr..
Little does not make any sensational
|
that previous to the election last fall of
MIR. John K. Cowen president of the
Baltimore and Ohio Company there was
gross nlismanagement of the company's
affairs. and that while it does not charge
criminal conduct on the part Of any one.
1t asserts that there were errors of man
&Sement, and declares that the books and
accounts were manipulated 50 that bet
ter showing of the Baltimore and Ohio's
business could be made than would have
been the case had the truth, the whole
truth and nothing but the truth oeen shown
by the books and accompanying papers.
1t Is well known that the firm of ) p.
Morgan Il Co. have often during the past
ten years, beginning with the period that
Mr.. Samuel Spencer was president of the
Baltimore and Ohio, come to the relief of
that company when it needed a friend with
a big bank account, but since Mr.. Morgan
was informed as to what MIR. Little dis
covered in his eXamina ton he has with
drawn his practical friendship. and the
Baltimore and Ohio when now in need of
funds gets its supply elsewhere.
Before deciding, however, to take this
step. and upon being, it is said. importuned
to stand by the Baltimore and Ohio as ne
had done SO frequently and ably before,
MIR. Morgan told the committee that for
him to comply with their request, it would
be necessary that four men. who are among
the highest officials of the road. and whom
he named, would have to retire from all
connection with the Baltimore and Ohio.
This was mis- ultimatum. The men namel
were invaluable to the large stockholders
ami most influential directors, and those
having the power to do so declined to take
UPON themselves the disagreed ole task of
removing the men. and Mr.. Morgan and his
firm declined to extend any further help to
the baltimore and Ohio.
so far, however, the receivers have ex-
ptrienced no trouble in negotiating certifi-
Gates issued by them, for these, bearing as
they do . per cent interest, payable in
gold. and constituting prior lien on the
entire road and its equipment are regard
ed by bankers everywhere as a gilt edge
Investment. and MIR. AIorgan's place was
taken by the Mercantile Trust Company of
New York.
Probable Issue of Certificates.
Financial men who are posted on Balti-
more and Ohio affairs say that although
there have already been issued s5cOOOOO of
receivers certificates and 100000 equip
ment bonds, making a total of SSOUO,UOU,
able in three years, but redeemable at the
pleasure of the receivers al the expiration of
enc year, there Will be no difficulty in nego-
tiatins at least s12G1o,G0 more of the
same sort of securities. and they say also
that it will be but short time until the
receivers will have to go into court and
ask for further relief of this sort.
ut is understood that portion of the
floating debt of the company, which
amounts to s16.OOO,OOO, has as yet been pro-
hal
of the amount is secured by good collater-
al. The rest. it is believed. will soon have
to be cared for in some way. Among this
Indebtedness is said to be the bill of the
General Electric Company for the equip
ment of the great Belt line tunnel with 4
system of electrical propulsion, amounting
to s1,"W,WD. and payable in one year from
the date of its completion, now long past,
ard other items of equal Importance, the
payment for which cannot be met out of
the earnings of the road for a good while
in the future.
'There will be no attempt to reorganize
the road until there is return to better
times. and it is doubtful if the stockhold-
ers who are able to do so would pay the
assessment necessary to put the road on it's
feet, unless it can clearly be shown to them
that this assessment would have the effect
of restoring the line to a dividend-paying
basis
What the assessment would be is prob
lem Impossible of solution at the present
time 1t will hardly be less than $40 a
share. and the 100000 shares of common
stock would, If all paid only raise s., 600 900
1t is said that there are other stocks, some
of which would bring about 5000, 900 more
than they already pledged for loans,
which could be sold and run the amount up
to s1OOOO,WO, but where the remainder
necessary could be gotten has not yet been
figured out. nor is 1T thought it could be
obtained in any other way than by making
a heavier assessment than that above men
toned.
''Of the $500 shares of common stock
10000 are held by the Garrett estate, which
would probably pay any assessment that
may be made. but much Of the balance is
in the hands of much smaller investors. as
Is shown by the fact that yesterday the
stock sold down to 10 81, and it is as
stunned that those who parted with their
holdings at that figure did so because they
were unable or did not care to lonper
carry it. ee'
Plans for the Future,
I'm addition to the common stock there
has been issued $1,000, 600 of first preferred
stock and s2.OOO.OOO OF second preferred
concerning which there is a question as to
Its being assessable. OF the first preferred
the Johns Hopkins University holds shares
amounting to s1,1OOOOO, and it is believed
to be doubtful if the trustees would nav
any such assessment If one could be legally
made. to enable them to come into the re-