New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1897-11-09
Gnanrial.
New-York. November !. 1877.
TO THE HOLDERS OF
CONSOLIDATED MORTGAGE
FIVE PER CENT. GOLD BONDS
Baltimore & Ohio
Railroad Company.
DUE 1897

Since the appointment of Receivers fc- the Baltimore
and Ohio Railroad Company in February 1895. We have
endeavored watch carefully. and 90 steps neces
sary protect the rights Of the Five Per cent conso'
dated Bondholders.
Almost Immediately after their Appointment the Re-
ceivers expressed the opinion that, u allowed TO Issue
s. 900 600 Receivers Certificates to b. used for discharg
ing accumulated supply bills and making some needed
additions the property. they could thereafter regularly
meet the Interest the several Issues OF bonds 'or
which the y. & o. Il. r. Co. directly responsible
and which constituted liens the principal railroads OK
the system.
Recognizing the advantages likely TO from hold
ing together all the properties and also understanding
that the part OF the 100000 certificates were TO
be used discharge supply bills which would probably
be held by the Court to he preferential liens, we with
others Interested the Consolidated bonds favored the
Issue Of such certificates.
OF late the Receivers have been unable TO fulfil their
expectation defaults have taken place on several OF
the lines important to the integrity OF She system since
these defaults felt that object Of the original
issue having failed further Of certificates for any
should be made by the Receivers ana therefore
have opposed all such further issues
In the Spring OF 1897 the Johns Hopkins University
flied in application asking that the 100000
first preferred stock Of the b. o. r. r. Co should be
declared lien the Income Of the property ahead OF
the Consolidated Mortgage Bonds. The Trustee OF the
Consolidated Mortgage filed answer which was deemed
adequate forth the rights OF the bondholders
few days before this application 10 be heard by the
Court learned that this had been withdrawn
by the Trustee Its stead there had been filed
another answer merely formal in character stating that
the Trustee had views In tho matter. and leaving the
determination OF the question the Court The reason
for this sudden change perhaps be given best BY the
Trustee. who on inquiry. Informed one Of US that III
differed decidedly with us in regard 10 the 3D. o. pre-
ferred stock. and that this Idea with Il;
that had held this opinion FOR years. long before
1T accepted the trust OF the Consolidated Mortgage and
tina. the purpose Of the Company In amending rs an
''swer was TO remain in a neutral position"
hmm. ltotaf 81. an1 tnan-
trail attitude Of the Trustee. whom had been rely
Ing for the protection Of the rights Of the bondho1ers
we communicated with some OF the large bondholders.
and took for independent Intervention in their
behalf and In behalf Of all other bondhoders Although
subjected TO great In the preparation Of papers
the case was fully presented by counsel and W. are
happy 10 say that notwithstanding the views OF the
Trusted the Court Ia. decided favor Of the Consoi
dated Mortgage and has denied the application OF the
University We 40 no, know whether the University will
take appeal from this decision. but II so. We shall
continue opposition.
More recently the Trustee Of the Pittsburgh and Con-
nellsvle Five Per Cen, Consolidated Mortgage has fled
petition. OF which the granting would in effect be
declaration that ia has lien equal with
On the main line II the u. & o. r. r. We are now Wig
Gro, sly opposing this application
We mention these matters simply 70 give the holders Of
the Five Per Consolidated idea OF the
unusual phases which taking On questions
other than that Of the First Preferred Stock the Trustee
has communicated with us. and. under indemnity from
has allowed lis counsel cooperate with We
do not that The Receivers will default In the
except under dire necessity; and
long there Is default In the payment Of Interest on
your bonds In performance OF the other undertake
lngs Of the mortgage there would not under ordinary
conditions. be COR anxiety. But the very I'M
usual attacks the integrity OF your mortgage apart
from default and the complications OF the present re-
csive-shp. as well the novel suggestion OF 'ncu.
trail" 1rusteeship. indicate necessity for constant
ea,chftness and Yisorous action.
Important Therefore that the bond
holders protect their and.
cordngy. have prepared Bondholders' Agreement
which among other things provides Cor the deposit Of
bond, with Aessrs. j. T. Morgan Co. and gives US all
necessary power that bondhoder represented
IN all matters In court well rs power TO press fore
closure proceedings IN case OF default.
II purposes commend themselves you will you
good enough iepo-. bonds With Messrs !. p
Morgan before January =. $685. receiving in
exchange therefor certificates % deposit for which quo
tatlon IN due time will be asked from the New York
These certificates for 81 90 each.
and bear interest warrants corresponding TO the coupons
maturing on bonds for the five years. As fast
a, coupon. are collected J. r. Morgan Co. will pay the
amount thereof surrender OF the corresponding war
rants.
deposited before the date above lndi
Gated.
There ma, be obtained Offices statement fur
nshed By the showing the earnings and fixed
charges property covered by the Consolidated Mort
gage We believe this statement Will be reassuring 10
bondholders bit also that II will show them the necessity
Of not allowing additional liens 20 be Imposed on the
property covered BY their mortgage IN priority thers' f
on equality herewith