The sun. [volume] (New York [N.Y.]) 1833-1916, 1897-11-15

KEW xoRE. Sov,nb.r 4. isss !
tn Tnn HOLDERS 90
CONSOLIDATED MORTGAGE
FIVE PER CENT. GOLD BONDS
Baltimore & Ohio
Railroad Company.
DUE 1891

since the appointment OF Receivers for the naiti-
moro and Ohio Railroad Company in February, lso0,
we have cndeavorod 70 watch carefully. and to take
all steps necessary 10 protect the rights. OF the Five
Per Cent. Consolidated Bondholdern.
Almost Immediately after their appointment the
Rcceivers expressed the opinion that, n allowed to
Issue ob,ooo,O 900 Rsosivep' Certificates, to 10 used
for disoharging accumulated supply bills ana for
making some needed additions 70 tho property, they
could thereafter regularly meet the interest on the
several issues OF bonds for which the d. 4 o. R, r. Co.
was directly responsible, and which constituted liens
on the principal railroads Of the system.
Recognising the advantages likely to accrue from
holding together all the properties, and also undcr.
standing that the greater part Of tho sS, 900. 900 GER
tincates were to DO used TO discharge supply bills
which would probably DO held by the Court to be
preferential liens, we, with others interested In the
Consolidated bonds, favored the issue Of such certin.
Gates.
or late the Receivers have been unable to fulnl
their expectation, and defaults have taken place on
several OF tho lines important 20 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 be made
by tho Receiver, and therefore wo have opposed all
such further issues.
, In tho Spring Of 1897 the Johns Hopkins Uniyer.
sity Hled in court an application asking that the
%, 900, 900 frat preferred stock of the b. L o. r. Il.
Co. should be declared n lien on thu income Of the
property ahead of the Consolidated Mortgage Bonds.
The Trustee OF the Consolid ated MORTGAGE hled
an answer which was deemed ADEQUATE to set forth
tho rights OF the bondholders, 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learned that this answer had been withdrawn BY the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 filed an.
| other answer. merely formal in character. stating
that the Trustee had no views in tho matter. and
leaving the determination of the question TO the
Court. The reason for this sudden change can per.
haps be given best by the Trustee, who, on inquiry,
informed one of US that 1T differed decidedly with US
in regard to tho D. O. preferred stock, and that this
.was no new idea with IT.; that It had held this
..opinion for many Year,, long before Il accepted the
trust OF the Consolidated Mortgage" and that 1.-THE
.purpose Of the Company in amending its answer
I. was to remain in n neutral position"
Immediately upon the hearing Of changed and
"neutrai" attitude OF the Trustee, on whom we had
been relying for the protection of the rights Of tho
bopdholders. we communicated with some Of tho
large bondholders. and took steps for an independents
Intervention in their behalf, and in behalf OF all
other bondhoiders. Although subjected to great
pressure In the preparation of papers. the case was
fully presented by our counsel, and we are happy to
aay that notwithstanding the views OF the Trustee)
the Court has decided in favor Of tho Consolidated
Mortgage, and has denied the application of the Uni.
yersity. We do not know whether the University
will take nm appcal from this decision, but II so, wo
shall continue our oppositlon.
More recently tho Trustee OF the Pittsburgh and
Connellsyille Five Per Cent. Consolidated Mortgage
has fled a petition, OF which the granting would
I'm eject be a declaration that It's mortgage has q
lien equal with yours ON the main line Of the b.
and O. r. r. We are now vigorously opposing the up.
%plication.
We mention these matters simply to give the hold.
err of the Five Per Cent. Consolidated Bonds some
idea of the unusual phases which matters are 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
70 cooperate with ours. We do not believe that tho
Receivers will default In the payment Of interest ex.
cent under most dire necessity; and so long as there
ia no default in the payment of interest on your bonds
or in the performance OF the other undertaking. OF
the MORTGAGE. there would not, under ordinary con
ditions, be any cause for anxiety. But the very un
usual attacks on the integrity Of your mortgage apart
from any default and the complications OF the pres
ent receivership. as well as the novel suggestion of g
''neutr"l" Tru"tecahip. indicate necessity for con
slant watehfuin, IS ana vigorous action.