Vermont phÅ“nix. [volume] (Brattleboro, Vt.) 1834-1955, 1897-10-08
A FIGHT Is ON.
Central Vermont OrganiZa-
ton.

stormy Meeting OF the Creditors In
Boston---a vigorous Kick Against the
Reorganization Plan which Prscti-
ca1y Turns. the Central system over
to the Grand Trunk.
The bondholders of the Central Yer
mont railroad, at a meeting in Boston
Tuesday afternoon, discussed the reorgan-
ization plan with good deal of spirit, and
adjourned without action TO Oct. II, next
Tuesday.
Inc question was practically whether
the consolidated bondhol1ers, by accepting
the recommendations of the committee,
should allow the Central Vermont TO pass
into the practical control of the Grand
Trunk rail way of Canada. 1t appeared
that the meeting was about evenly divided
between those favoring the Grand Trunk
alliance aud those who favored seeing the
Central Vermont system pass into the
hands of the Boston & Maine road.
Mr.. Storey explained that when the
committee was first appointed it sent to
the Boston & Maine, Canadian Pacific, the
| Fitchburg, and other roads and sounded
| them as to whether under certain condi-
lions they would be willing TO take the
| Central Vermont and operate it. All Of
these roads paid no attention TO the over
ture. He said the only encouragement
the committee received was from Banker
| f. II. Prince of Boston, who made an offer
which ii did not lind expedent to accept.
Chairman Hills read protest from the
| Cottug-Olney interests. Lawyer Lewis
| Dabney vigorously denounced the plan
| Messrs. Day and Baker of the committee
were asked regarding the statement. They
answered that they approved of the plan
Mr.. D4bney then wanted to know if there
was TO be any priority between series A
and series b bonds; whether the financial
claims Of the Grand Trunk against the
| Central Vermont were legitimate; who is
to get the new stock which it is proposed
to issue also if it is proposed 10 pay the
! Grand Trunk the claim in full, and whether
the latter proposes TO III Ike anything out
of this new deal. He also wanted to know
| if the Grand Trunk was in the thing mere
ly for charitable purpose.
1t was brought out in the protests that
the trustees do not approve of the proposed
reorganization scheme. They gave their
objections at length. The plan follows
the ordinary reorganization scheme In
many particulars. The grave defect of the
plan is the fact that the bonds are only
guaranteed by the Grand Trunk in case 30
per cent of the gross receipts from traffic
nterchanged is earned. The value OF this
guarantee depends on traffic earning which
the Grand Trunk would be able TO make
greater or smaller at its pleasure. The
protest concluded by stating the standing
Of the Grand Trunk railway securities in
the London stock market and the fact that
many of them are selling below par
Henry X. Day Of the committee defend
| 81 H. har iutp lly
posed to the plan, but after careful study
of it believed it to be the only logical solu-
ton of the difficulties in which the Central
Vermont is placed. He said TO refuse TO
accept this compromise now would mean
the enmity Of the Grand Trunk instead of
its support and possibly the i'll will Of the
Smith interest, which is largely represent
ed in the Junior securit es, and also that of
the Boston and Maine. Under foreclosure,
it could be months and years perhaps be
fore the bondholders would get control of
their property again.
The Grand Trunk he said, was the nat
ural ally of the Central Vermont and he
thought would ably protect the interests of
the bondholders. Mr.. Day closed his re-
marks by saying he regretted he could not
present minority report favoring an ALI
ance with the Boston and Maine. This
expression was received with applause.
John c. Coombs took the floor. He was
assisted in his remarks by specially pre-
pared map hung in front of the rostrum,
showing the physical and geographical ia
cilities of the Central Vermont. This
map, he said, proved that the natural al
lies of the Central Vermont on the one
side were first the Boston and Maine, sec
ond the Fitchburg and third the Delaware
and Hudson roads. Its strongest compel
itor is the Rutland, which has gone out OF
the Central Vermont system. On the west
the road has two important connections,
the Ogdensburg and Lake Champlain for
water borne traffic and the Grand Trunk.
Mr.. Coombs declared himself opposed to
the Grand Trunk road and its financial
policy, especially in its methods toward
the small lines controlled by it. II was a
question of annual deficits rather than
SURPRISES so far as these small roads were
concerned. This was taken as an intima-
ton that the Central Vermont would be
added to these small roads in this respect.
He characterized the 1928 900 600 which
the Grand Trunk has out in stocks, bonds,
notes and other obligations as STUFF and
said it was in such a wretched financial
condition itself that it could pay only Il
per cent per annum on its own capitalize
ton. 1t carefully conceals its annual bal
ance sheet from public view and its own
management does not pretend that the
road is worth within $4,000 900 of its out
standing securities. The amount of its
borrowed money, unpaid interest on de-
benture stock, current expenses and over
due pay roll is enormous. If a forced sale
was to be made today it would show the
company from $4,000, 600 to 100000 in
the hole.
At the conclusion of his very vigorous
remarks he sprung a motion to adjourn
the meeting for further consideration OF
the matter and that the three gentlemen,
representing the dissenting bondholders
be meanwhile added to the committee.