New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-11-03
financial
New-York. November I. 1897
TO THE HOLDERS OF
CONSOLIDATED MORTGAGE
FIVE PER CENT. GOLD BONDS
Baltimore & Ohio
Railroad Company.
DUE l088,)

Since the APPOINT ent Of Receivers for the Baltimore
and Ohio Railroad Company in February 1896 we have
endeavored carefully and TO take all steps neces
eary project the rights OF the Five Per cent Conso
dated Bondhoders.
Almost Immediately after their appointment the Re-
ce,vers expressed opinion that " allowed 70 issue
IS Certificates 10 be used for dschaTg
ing accumulated supply bills and for making some needed
additions property. could thereafter regularly
meet the the several issues OF bonds Tor
which the g. & o. r. r. Co. directly Responsible
and which constituted liens the principal railroads OF
the system.
Recognizing the advantages likely 10 accrue from hold
ing together all the properties and also uhdefsa'"s
that the greater part the 100000 certificates were 70
be used discharge supply bills which would pfooaoy
be held by the Court TO be preferential liens We win
others interested in the Consolidated bonds iaVoeu e
issue Of such certificates.
late the Receivers have been unable TO rum ther
expectation and defaults taken place on several OF
lines important the integrity OF the system since
these defaults felt that the object OF the original
having failed further issue OF certificates TOT any
purpose should 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 s3."oo"
first preferred stock Of the b. o. r. r. Co should be
declared on income Of the property ahead OF
the Consolidated Mortgage Bonds. The Trustee OF the
Consolidated Mortgage filed an answer which was ceemed
adequate forth the rights Of the bondholders
few days before application to be heard by the
Court learned that this answer had been Withdrawn
by and that In its stead there had been filed
another answer merely formal In character stating that
the Trustee In the matter. and leaving the
determination Of the question TO the Court The reason
this sudden change perhaps be given best by the
Trustee who on inquiry Informed Of us that III
differed decidedly with in regard 10 the b. o. pre-
'ferred stock and that this new idea with II:
that had held this opinion for years long before
accepted the Of the Consolidated Mortgage and
the purpose Of the Company in amending It's an
'swer was TO remain in Il neutral position.
Immediately upon hearing Of the changed and neu-
trail attitude Trustee whom had been rely
for the protection OF rights Of the bondho.ders.
communicated with Of the large boniholders.
and took steps for independent Intervention In their
behalf and behalf Of all other bondholiers Although
subjected in the preparation of papers
the fully presented b. counsel and We are
happy 10 say that Notwithstanding the views OF the
Trusted the Court favor Of the Consoli
dated Mortgage and has denied the application OF the
University We 80 know whether the University will
take an appeal from this decision. but So we snail
continue our opposition.
More recently the Trustee Of the Pittsburgh and Con-
nellsv'e Five Per Cent Consolidated Mortgage has lied
a petition. of which the granting would in effect be a
declaration that It's mortgage has lien equal with yours
the line Of the r. o. r. r. We are now Wig
oro,sly opposing this application.
We mention these simply give the holders OF
the Five Per Cent Consolidated Bonds idea OF the
unusual phases which taking. On questions
that OF First Preferred Stock the Trustee
communicated with and und'r indemnity from
US. has allowed Its counsel TO cooperate with ours We
DO believe that the Receivers will default in the pay
Of interest except under dire necessity and 80
long defaul, the payment Of in;ere.
your bonds in the performance Of the other undertake
Of the mortgage there would not. under ordinary
conditions be any COR anxiety But the very IN
usual attacks the integrity OF your mortgage apart
any default and the comocaons Of the present re-
Ownership well the novel suggestion OF "neu-
trail" 1rustecship. indicate necessity for constant
watchfulness and Vigorous action.
TO most important therefore, that the bond
holders unite protect their interests; and.
oordingly. have prepared Boniholiers Agreement.
which. other things provides for the deposit OF
bonds with Messrs. J. p Morgan Co.. and gives all
necessary that bondhoders represented
all matters In court well power TO press fore.
closure proceedings In case Of default.
II these purposes commend themselves 10 YOU will you
be good enough iepos. bonds with Messrs p.
Morgan Co on or before January 1893 receiving In
exchange therefor certificates Of deposit for which
tation in due Will be asked from the New York
Stock Exchangs7 These certificates for 81 900 each
and Interest corresponding TO the coupons
maturing the bonds for the next 1--WE years. As fast
az coupons are collected. T. p Morgan Co. will pay the
amount thereof surrender Of the corresponding
rants.
cannot undertake represent bonds which shall
not have deposited before the date above ind
Gated.
There may BE- obtained a, ofnces statement fur
by the Receivers showing the earnings and fixed
charges OF the property covered by the Consolidated Mort
gage. We believe this statement will be reassuring TO
bondhoders but also that will show them the necessity
Of not allowing additional liens TO be imposed the
property by their IN priority thereto 'r
an equality herewith
p. MORGAN Il co.
BROWN BROTHERS Il co.
Barring, MAGOUN 4 co.