New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-11-13
Financial.
New-Yovk. November l. is6
TO THE HOLDERS OF
C0NS0LlrA Ed N RTCAGE
FIVE PER CENT. l0-D BONDS
Of THE
Baltimore G Chic
Railroad Company.
(OUZ 1881
IOUG 1881


and Ohio Railroad Company in February. 1890 have
erdeavorrd watch carefully and to take all
ssry to pro,et the ris Of the Five Per Cent Console
Gated Bondhold-rs
Almost Immediately af'f their appointment the Re-
ceivers expressed the opinion that allowed to issue
$ooo0o0 Receivers, Certificates be used FOR di.chsrs
Ing accumulated supply bills and for making needed
additions to the property they could thereafter regularly
meet the interest tie several Issues OF bonds Tor
which the 3. O. II. n. Co. directly responsible.
and which constituted liens the principal railroads ee
the system
Recognising the ADVANTAGES likely 10 from hold
Ing together all the properties ami also understanding
that the part Of the 100000 certificates were to
be used to discharge bills which would probably
be held by the Court to be preferential lens we with
others interested in the Consolidated bonds favored the
Issue Of such certificates
OF late tho Receivers have been unable fuln their
expectation and defaults taken several OF
the lines important, the integrity OF the system Since
these defaults have felt the object OF the original
issue having failed further issue Of certificates for any
purpose should be made by the Receivers and therefore
we have opposed all such further issues.
In the Spring Of 1897 the Johns Hopkins University
filed in court application asking that the ssooooW
hrs preferred stock of the b. q o. II. r. Co should b
declared lien on the Income OF the property ahead q
the Consolidated Mortgage Bonds The Trustee OF the
Consolidated Mortgage filed which was deemed
adequate TO forth the rights Of the bondhodsrG
few days before this application to be heard oy u
Court learned that this had been Withdrawn
by the Trustee and that there had been asd
another answer merely formal In character stating that
the Trustee had views In the and leaving the
determination cf the Court. The reasoa
for this sudden change perhaps best by the
Trustee. who. inquiry. Informed OF that n
differed decidedly with In regard to the 3. & Q. pre-
"ferred stock. and that this idea with IT,
that had held this opinion for long before
1T accepted the trust OF the Consolidated Mortgage an1
that the purpose Of the Company In amending ~ an
'swsr was to remain In a neutral position"
Immediately upon hearing Of the changed and ''nsu-
traI attitude Of the Trustee whom had been rely
Ing for the protection OF rights of bondhoder
We communicated with OF the large bondhodsrS
ana took steps for independent IN their
behalf and In behalf Of all other bondhodes ALTHOUGH
subjected to great In the preparation Of papers
the case was fully presented by counsel and
happy to say thst Notwithstanding the Views Of the
TRUSTED the Court has decided In favor OF the Console
dated Mortgage and has denied the application Of the
University. We 40 know whether the University will
take appeal from this deci.ion but II %. shall
continue opposition.
More recently the Trustee Of Pittsburgh and Con-
nelsvlie Five Per Cen, Consolidated Mortgage has nsa
q petition. OF which the granting would In effect b
declaration that it has lien equal with youfs
en- the main line OF the b. o. r. r. We are now vtg
ely opposing this application.
We mention these matters simply 70 give the holders Of
the Five Per Cent Consolidated Bonds idea Of tbs
unusual phases which matters taking On questions
other than that Of the First Preferred Stock the Trustee
communicated with and. und'r Indemnity nom
U.s. has allowed Its counsel to cooperate with ours We
do believe that me Receivers will default In the pay
OF except dire necessity and
long there Is default In the payment Of interest
your bonds In tn performance Of the other undertake
ings Of the mortgage there would not under ordinary
conditions. be any or anxiety. But the IN
usual attacks the integrity Of your mortgage apart
from default and the complications OF the present re-
Ownership. as well suggestion OF . "neu-
troll" Trusteesh,p. Indicate necessity for constant
watohfuIess and vigorous action
important. therefore. that the bond
unite with 70 protect their interests and ac-
eordngy we have prepared a Dondholders Agreement.
which among Other things provides FOR the deposit Of
tonds with Messrs J. r. Morgan Co.. and gives us all
ecessary power that bondholiers represented
In all matters In court well power to press FORE
closure proceedings in case OF default.
IL these purposes commend themselves will you
be rood enough % jsposs your bonds with Messrs J. p
Morgan Co O, or before January g 1885, receiving In
exchange therefor OF deposit for which quo
taton IN due time will be asked from the New York
Stock Exchange These certificates are Tor $1,000 each
and corresponding 20 the coupons
maturing on the bonds for five years A. fast
as coupons are collected T. p. Morgan Co will pay the
amount thereof on surrender Of the corresponding
rants.
We cannot undertake represent bonds which shall
been deposited on or before the date above ind
Gated.
There may be obtained at Offices statement FUR
nished by the Receivers showing the earnings and fixed
charges OF the property by the Consolidated Mort
sage We believe this statement will be resssurtnG to
bondhoders bat also that vii! show them the necessity
OF allowing additional liens To be imposed on the
property covered BY mortgage in priority thereto -
on equality Herewith.
j. r. MORGAN q co.