The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-11-05
Etmnrixf.
NEW YORK. November i. 1897.
TO Tlup or
CONSOLIDATED MORTGAGE
FIVE PER CENT. GOLD BONDS
Baltimore & Ohio
Railroad Company.
DUE Ioee.)

s,,,. m. sppointment OF Receivers for the Baitt d.
ror, and Ohio Railroad Company In February, 1870
We have endeavorcd to watch carefully, and TO take
ali stepa necessary to protect tho rights, OF the Five
Per Cant. Console ated Bondholdera.
Almoat Immediately after their appointment the
Receivera EXPRESSED the opinion that, II allowed TO
i.sue $4,000. 600 Receivers Certificates. TO DO used
for di.oharginR accumulated supply billa ana foE
making some needed additions to the property, they
could thorenfter regularly meet tho interest on the
eeveral issues of bonds for which the n. q o. n. II. 90.
was directly responsible. and which constituted liens
on tho principal railroads OF the system. 4
Recognising the advantages likely to accrue from
holding together all the properties. and also under
stsudinR that the greater part OF tho 100000 GER
tiBcntea were 70 be used to discharge supply bills
which would probably be held by tho Court to 30
preferential liens, we, with others interested in the
Consolidated bonds, favored tho Issue OF such certtn
Gates.
or late the Receivers have been unable to fulfil
their expectation, and defaults have taken place on
several OF the lines important to the integrity OF the
system. Since these defaults we have felt that, the
object OF the original issue having failed, no further
issue OF certificates for any purpose should DO made
by the Receivers, and therefore we have opposed all
such further issues.
In the Spring OF 1897 tho Johns Hopkins Univer~
sity aled in court an application asking that the
o5, ooo. 900 nrst preferred stock of the b. & o. r. n
Co. should be declared q lien on the income of the
property ahead OF the Consolidated Mortgage Bonds.
Tho Trustee of the Consolidated Mortgage filed
an answer which was deemed adequate to set forth
the rights Of the boudhoiders. A few days before
this application was to be heard by the Court, we
learned that this answer had been withdrawn by the
Trustee, and that in its stead there had been nled an.
other answer, merely formal in character. stating
that the Trustee had no views In the matter. and
leaving the determination OF the question to the
Court. Tho reason for this sudden change can per
haps be given best by the Trustee, who. on inquiry,
informed ono OF us that " It differed decidedly with N
"in regard to the D. so preferred stock, and that this
.was no now idea with It; that &c had held this
''opinion for many years. long before IL accepted tho
trust of the Consolidated Mortgage" and that "tho
"purpose Of the Company in amending its answer
=" was to remain In a neutral position" . 3.
Immediately upon hearing of the changed end
'neutral" attitude of the Trustee. on whom we had
been relying for the protection of the rights Of the
bondholders. we communicated with some of the
largo bondholders. and took steps for an independent
Intervention in their behalf, and in behalf Of ali
other bondholders. Although subjected to great
pressure in the preparation Of papers. the case was
fully presented by our counsel. and We ara happy TO
say that Notwithstanding the views Of tho Trustse)
the Court has decided in favor Of the Consolidated
Mortgage. and has denied tho application Of the Uni
yersity. We do not know whether the University
will take an appeal from this decision, but II 90, we
shall continue our opposition.
Moro recently tho Trustee Of the Pittsburgh ana
connellsville Five Per Cent. Consolidated Mortgage
has nled q petition. of which the granting would
in effect be q declaration that its mortgage has Q
lien equal with yours on tho main line of the d.
and o. r. r. We are now vigorously opposing the APP
plication.
We mention these matters simply to give the hold
ors of the Five Per Cent. Consolidated Bonds some
idea of the unusual phases which matters arc taking.
On questions other than that Of the First Preferred
Stock. the Trustee has communicated with us. and,
under an indemnity from US, has allowed its counsel
to cooperate with ours. We do not believe that the
Receivers will default in tho payment OF interest or.
oept under most dire necessity; and 90 long as there
10 no default in the payment of interest on your bonds.
or in tho performance of the other undertaking. OF
the mortgage. there would not. under ordinary con.
ditions. be any cause for anxiety. But the very I'M
usual attacks on tho integrity Of your mortgage apart
from any default and the complications of the pres.
ent receivership. a. well a. tho novel suggestion of Q
.heu'ral" Irastoeship' Indicate necessity Tor CON
I..s"a. ~ =. -. = . r.so.ou. aouon. $3.50