Evening star., 1897-01-22
History of the B. and O. and the Cen
trail Ohio.
DEFAULFOF RENFALOFOR MANY YEARS
Suit Begun to Make the Receivers
Responsible.
LARGE AMOUNT INVOLVED

Ohio Railroad Company, which. as here
tofore stated in The Star. has been under
lease for he past thirty years to the Bal
timore and Ohio Railroad Company, but
the rental for which has been withheld by
the latter for several years, have deter
miEed, it is understood. to at once bring 10
an issue the question as to whether the
receivers of the latter are responsible for
the agreement entered into between the
late John W. Garrett as president of the
Baltimore and Ohio and the Central Ohio
directors in 1865. and will apply to the
proper court In Baltimore to compel the
receivers to pay them almost one million
dollars alleged to be due without further
delay.
In conversation with a Star reporter
day or two since. a Baltimore banker said:
There are some disagreeable and alarm
ing complications for Central Ohio stock
holders in the lease and guarantee of the
Columbus and Cincinnati Midland and the
Sandusky, Mansfield and Newark rail-
roads by the Central Ohio ard Baltimore
and Ohio companies conformity
a suit begun.
The prediction came true sooner than
was anticipated by the speaker, for on the
same afternoon Mr. W. f. Case, resident
of Scipio. n. V. filed a petition in the
that the receivers of the Baltimore and
Ohio railroad be required to present a full
account of the earnings of the Central
Ohio and Cincinnati Midland railroad COM
panies since January ]. 1895.
Mr. Case also asked for a detailed state
ment of how these earnings were expended
especially what portion Of the 30 per cent
of the profits of the Central Ohio has been
applied TO the payment of the interest on
the bonded debt.
The DefitiOn further asked
appear. as IS charged, that 81 per cent of
the gross earnings of the Central Ohio
Railroad Company are sufficient alone. or
when added to the net earnings of the CO.
IuTnbus and Cincinnati Midland Railroad
company. tG pay the installments due July
J. lS~, and January !. 1897, on the pre-
ferred stock. the receivers may be directed
TO pay the sane TO holders of this stock
The petition also claims that i'm so far ms
TIE central Ohio was concerned. the Balti-
more and Ohio, upon getting possession of
the property in 1859, guaranteed that the
earnings TO be paid to the Central Ohio
should be at least s166oo0. and if there
was a deficiency, the Baltimore ard Ohio
would pay 1t.
Effect the stock
The banker above quoted. in speaking of
the controversy between the Central Ohio
and Baltimore and Ohio companies. said:
Inc stockholders of the Central Ohio
company are bee orling restiye at the fall
ure OF the receivers of the Baltimore and
Ohio company to pay the rental of the
central Ohio railroad. the same being thir-
ty-tive per cent of gross earnings In CON
sequence of this default the holders Of rhe
SNss:kn preferred and common stock of
ne company are without dividends and
lhe preferred stock. which used TO sell a
''' and common at ~. is quoted al about 3o
It he terms under which The RaItinore
and ohio leased the Central Ohio Railroad
arr rental of thirty-five per cent of gross
e&rnass. the Baltimore and Ohio TO pay
ell expenses of maintenance of way ana
equipment. the rental TO be net 20 security
hcldeTs without deduction. except that the
bdllnlor" and Ohio is not to pay more
thdn Si-,.'~p taxes In any year
The last annual report of The Baltimore
Tor the year OF the Central Ohio Amounted
10 about S1.sH.Gn. which makes the rental
Stl't'-'6" As the interest on the 81 100 900
4 l. percent bonds of the conpany
amounts to s112-sg Ghe mortgage ia for
s2S-ItHn. hut orly s2,JD.p1 are issueD
ana say s15.vy) excess of taxes, in
all, Sfsa'htLs there should have been appli-
cable 10 dividends on Central Ohio stock
last Year S2<2 lOa71 Tne dividends due
July. 1895. and January. 1897. on Central
Ohio preferred and common stock were
passed. and there does not appear to be
any reason TO expect that under present
conditions they will be shortly resumed
The holders of Central Ohio stock. or a
minority of such holders the majority
kaEing heretofore acted with the Baltimore
and Ohio management, contend that the
receivers OF the Baltimore and Ohio COM
pany should pay the rental of the Central
Ohio into the treasury of the Central Ohio
company, and that the same should be dis
hursed by the Central Ohio company's
OWE officials
From the Little Report.
TIL. report of Mr.. Little shows that the
Baltimore and Ohio company owes the
Central Ohio sI56G4s9s This represents
the accumulation Of rentals during a series
OF years over the amount disbursed In pay
ing the per cent dividends on Central
Ohio stock. and is supposed to belong to
the stockholders Whether they will ever
get II or any part of II remains 10 be seen
The baltimore and Ohio statement for
the year ending June 80. 1886 showed that
loss OF S3DOD was made in operating
the Central Ohio division. In explanation
of this II was shown that il cost 50 per
cent or gross earnings to operate the Cen
trail Ohio road.
What IL cost TO operate the property or
what amounts were or being spent on
the read for maintenance of way, etc.
IL a matter of no personal interest TO the
nOIders or central Ohio stock. In the
lease to the Baltimore and Ohio IL is pro-
vided that such expenses would be borne
by the Baltimore and Ohio company
The Central Ohio.
Some OF the heaviest stockholders of the
Central Ohio Railroad Company are not
satisfied with the view taken by the re-
ceiveTs Of the Baltimore and Ohio regard
ing the claim Of the former for rentals. az
gregating nearly one million dollars allee-
ed 10 be due from the B. and o. for the use
of the property, and in conversation on the
subject a day or two since, Mr.. Joseph III
Rieman OF Baltimore. a member of tie
board Of directors Of the Central Ohio said !:
The report coming to from the re-
ceivers office Is not at all satisfactory. The
baltimore and Ohio owes US large
amount OF back rental. and we think II is
tIne we should be getting IL. The Central
Ohio was leased 10 the Baltimore and
Ohio at rental Of 81 per cent of the gross
earnings. For about six years none Of II
has been paid II the receivers do NOT ar
range the matter for an early settlement
We Will likely call another meeting to de-
termine upon further action"
One OF the Oldest stockholders of the Cen
trail Ohio company said yesterday: Il am
informed that so well was the Central
Ohio railroad thought of by the late John
W Garrett that in enc Of his yearly re-
ports he used these words: 1T Is expected
that the commanding position and rela-
tions of this road viii not only. as hereto
fore, add largely to the trade OF Baltimore.
hut yield satisfactory results in connection
with the traffic of the Baltimore and Ohio
Railroad Company