Wheeling register. [volume] (Wheeling, W. Va.) 1878-1935, 1897-11-08

! ctlar explaining their latest move to
! secure control of the Baltimore &
| Ohio Railroad property, which, if sue
cessful, will give Morgan and his
friends control of every trunk line en-
| tering the metropolis, with a single
exception, and shippers in the South
will be at the mercy of the Morgan
! people, in the matter of rates or other
! lows:
| Since the appointment of receivers
| for the Baltimore & Ohio Railroad
Company, in February, 1896, we have
| endeavored to watch carefully, and to
| take all steps necessary to protect, the
| rights of the Five Per Cent Consoli-
/ dated Bondholders.
Almost Immediately after their ap-
! pointment, the receivers expressed the
| opinion that if allowed to issue S5,-
| 0O0,0O0 Receivers Certificates, to be
| used for Gischarging accumulated sup
ply bills and for making some needed
| additions to the property, they could
on the several issues of bonds for
which the B. & o. Railroad Company
was directly responsible, and which
| roads of the system.
Recognizing the advantages likely
| to accrue from holding together all the
/ properties, and also understanding
| that the greater part of the 100000
certificates were to be used to dis
charge supply bills which would prob
ably be held by the Court to be pref
erential liens, we, with others inter-
ested in the Consolidated bonds, favor
| the issue of such certificates.
"Of late the receivers have been I'M
| able to fulfill 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 orig
inal issue having failed, no further is
| sue Of certificates for any purpose
| should be made by the receivers, and
| therefore we have opposed all sucn
| further issues
In the spring of 1897 the Johns Hop
! kins University filed in court an appli-
/ cation asking that the $4,000 first
I preferred stock of the B. & o. r. R.
| Co. should be declared lien on the
! income of the property ahead of the
! consolidated mortgage bonds. The
! trustee of the consolidated mortgage
! filed an answer which was deemed
/ adequate to set forth the rights of the
| bOndholders. A few days before the
| 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 been withdrawn by the trustee, and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
/ another 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. The reason for this sudden
! change can perhaps be given best by
| the trustee, who, on inquiry, informed
| one of us that it differed decidedly
with us in regard to the B. & O. pre-
| ferred stock, and that this was no new
| idea with it; that it had held this
! opinion for many years, long before
| it accepted the trust of the CONSOLE
dated mortgage. and that the purpose
Of the company in amending its an
| sWer was to remain in a neutral posi-
| ton
! Immediately upon hearing of the
changed and 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 large bondhOlders, and
took steps for an Independent inter-
vention in their behalf, and in behalf
of all other bondhOlders. Although
subjected to great pressure in the
preparation of papers, the case was
| fully presented by our counsel, and
we are happy to say that (nOtwith-
standing the views of the trustee) the
court has decided in favor of the con-
solidated mortgage, and has denied the
application of the university. We do
not know whether the university will
take an appeal from this decision, but
if so, we shall continue our opposi-
| ton.
More recetly the Trustee of the Pitts
| burg and Connelsville Five Per Cent.
| Consolidated Mortgage has filed a pc
titiOn, of which the granting would
in effect be a declaration that its mort
gage has a lien equal with yours on
the main line of the B. & O. r. r. We
are now vigorously opposing this appli-
cation.
I'VE mention these matters simply
to give the holders of the Five Per cent.
I Consolidated Bonds some idea of the
| unusual phases which matters are TAX
ing. 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 th2t the Receivers will
default in the payment of interest ex-
| cent under most dire necessity; and so
| long as there is no default in the pay
ment of interest on your bonds, or in
| the performance of the other undertake
ings of the mortgage, there would not.
| under ordinary conditions. be any cause
for anxiety. But the very unusual at
lacks on the integrity Of your mortgage,
apart from any default. and the comp!i-
cations Of the present receivership, as
well as the novel suggestion of 'NEtr-
| TRIAL TRUSTEESHIP indicate neces-
sitv for constant watchfulness and Wig
orous action.
at seems to us important, therefore,
that the bondholders unite with US to
| protect their interests: and, according
~. we have prepared Bondholders'
Agreement, which. among other
things. provides for the deposit Of