Evening star. [volume] (Washington, D.C.) 1854-1972, 1898-06-03
B. AND 0. AFFAIRS
Prospect Of Defaults on Due and Over
due Interest.
PLAN ADOPTED FOR REORGANIZATION
Schedule Of the Outstanding Obi
cations of the Company.
TOTAL OF S145, OOO, 900

Suit for the foreclosure of the bonds of
tie Chicago division of the Baltimore and
| Ohio railroad was instituted at Chicago
yesterday by Mr.. Charles H. Coster of the
firm of ]. p. Morgan & Co. of New York
and Mr.. James Sloan, IT, of Baltimore, the
latter representing, it is believed the Bal
timore reorganization committee of the
Baltimore and Ohio Railroad Company
This action is in pursuance of permits
sion granted to MesSrs. ]. P. Morgan &
Co. by the United States court at Balti-
more several months ago, shortly after
Receiver Cowen and Murray We're appoint
ed to take charge of and operate the rail
| road company. 1t is believed in well-in-
formed circles that the action of Messrs.
Coster ard Sloan yesterday is the fore
runner of other proceedings on the part of
Messrs. Morgan G Co., which will eventuate
in the sale by foreclosure of the great
property and its passing to the manage
ment of Morgan & Co., to be added to the
list of the many lines already controlled by
that house
The suit is based on the claim that the
plaintiffs hold all the bonds issued when
the road was build, in 1877. and that the
baltimore and Ohio Railroad Company,
which is named as codefendant. refused
to pay the interest due in December last.
The Chicago division IS 21S miles long and
extends from Chicago Junction to Chicago,
and 1t is the only way by which the Balti-
more and Ohio trains from the east reach
Chicago except through what privileges
nave recently been gained by the receivers
through traffic arrangements with the Gin
cinnat Hamilton and Dayton and the
Monon route, both running north out of
Cincinnati.
A Baltimore and Ohio official said that
even If the outcome of the suit was in favor
OF Morgan & Co., they could not operate
1t, because the Chicago division does not
own any rolling stock, but in other quar-
tiers this view is looked upon as erroneous,
as 1t will hardly be denied that there are
many equipment concerns in the United
states whose owners would be glad to fur
nlsh j. Pterpont Morgan his representa-
tlVes with everything in that line that
they might wish.
Fear of Further Defaults
Though carrying, according to well-n-
formed authorities, twice as much traffic
last month as at any period in its history,
officials of the Baltimore and Ohio Railroad
Company assert that it did not make
money, and it is feared there will be fur
Their defaults made in the near future on
due and overdue interest
1t Is stated by persons who have hereto
fore been regarded as possessing positive
Knowledge of what is going on in inside
circles of the Baltimore and Ohio-in fact
1t Is semi-officially announced-that a plan
Tor the reorganization of the company has
been agreed upon by committee having
the matter in charge, and approved by
parties in interest. 1t is also stated that
the scheme has been underwrtten by a
syndicate of bankers. and that the plan
Will be announced at an opportune time
winch Will be when reasonable assurance
is given that there will be no complications
affecting the money market to be expected
from the war with Spain.
Continuing, The Star reporters informant
said:
This does not mean as 1 understand,
that the announcement of the plan will be
withheld until peace has been secured, but
that 1t may be brought out when any decid-
ed victory may be obtained and there shall
be no probability Of further foreign com
p1cations. No one outside of those having
the plan In charge knows what is the exact
nature OF the proposal, but it is now admit
tea tnat a foreclosure of the property and
new deal all around is absolutely neces-
sary.
This will necessitate a foreclosure of all
the divisional mortgages. Without pre-
tending 10 nave any knowledge of the plan
OF reorganization, we anticipate that 1t will
follow the usual custom of scaling the in
terest on the prior-lien bonds and both in
terest and principal on bonds which are
secured by properties which are not self
supporting.
First Preferred Stockholders.
1t will be interesting to know what the
reorganization plan will offer the present
first preferred stockholders. The case of
the first preferred stockholders is now
pending in the Supreme Court of the United
States The question is, whether this stock
is a lien prior to the mortgages
Another important matter for considera-
ton with those who hold Central Ohio
stock, which is operated and controlled by
the Baltimore and Ohio, is how this road
will be treated in the Baltimore and Ohio
reorganization.
Tho Belt railroad bonds likewise present
a question of great Importance | have al
ways claimed that probably the worst
which could happen to those bonds was a
reduction of the interest to per cent and
1t is to be presumed that something will be
given for the past due coupons.
1T is not, of course, certain that the
plan as at first presented will be accepted
There are many conflicting interests to be
considered, but by mutual concessions an
agreement must be ultimately reached
The sooner the better.
Table of Securities.
1.-THE following table will show the securi.
ties to be dealt with when the reorganiza-
ton is perfected:
Loan of 1858 estimated at per cent and
maturing at WILL $3.50 900: fixed charges,
$14 ,4lO Loan of 1853 extended at per
cent, maturing 1885, $1,66O,5OO; fixed
charges, $67, $50. Bonds of city of BaIti-
more per purchase of Pittsburg and Con-
nellsvile Railroad Company, & per cent,
S2OO,O fixed charges, $4,000. Loan of
lSIZ, Serllng 6S, maturing 1902, 50 $50 600:
fixed charges, $3.50 800 Loan of 1874 ster-
ling SIS, maturing 1910, $9.6SO,OO0; fixed
charges. $3.50, $40. Loan of 1877, Baltimore
and Chic and Chicago SIS, maturing 1927,
S7,14i 900; fixed charges, 1887 200. Loan Of
1879. Parkersburg branch SIS, maturing
1919, $3,OOOOOO; fixed charges $3.50 600.
Bonds of Northwestern Virginia SIS. ma
turing 1902, $132 900; fixed charges. Sc. $50
Loan Of 1888, Philadelphia division 41bs
maturing 1893, $11 .616, 600; fixed charges.
$50, 20. Loan of 1855, second consolidated
Pittsburg and Connellsville SIS, maturing
1925, $1O,OOO,OOO; fixed charges, $500. coo.
Loan of 1883, consolidated mortgage SIS.
maturing 1888, $11 .9SS 600; fixed charges
S593, 400. Baltimore and Ohio car trusts.
extended SIS, $2JO,O00 fixed charges, Sill
S75. Pittsburg and ConneMsville trust rs.
extended at per cent, maturing 1898, $4,-
OO0OO; fixed charges, S2S0OOO. Pittsbure
and Connellsville first consolidated IS. ma
turing 1925, $6,64S, pa; fixed charges, $685.
1914. Loan Of 1894, terminal AVS, matur-
ing 1884, Sc, sol, 900: fixed charges, $3.50 800.
Receivers certificates per cent maturing
1869. SIS 600. 900; fixed charges $500, 600 Re-
ceivers' certificates. Maryland Construc-
ton Company 6's, maturing 1899 1922 900:
fixed charges, $27 1888. Receivers certifi.
Gates, Pittsburg and Connellsville railroad
SIS, maturing 1900, $3.50, 900; fixed charges.
S416,25O. Receivers certificates, car floats
SIS, maturing 1900 500 600; fixed charges.
~ &00 RecpivarS' eorfif3co foa