Evening star. [volume] (Washington, D.C.) 1854-1972, 1898-03-04
New Equipment Secured Under Au-
thority of the Court.
DlSC0URAGING VIEW OF TIE OUTLOOK
Opinion Expressed That Compan,
is Drifting Into Insolvency.
CONFLICTING INTERESTS

Under authority recently granted by
| Judges Con and Morris OF the United
| States circuit court of Baltimore the Bal
| timore and Ohio Railroad Company has Sc
| cured a large amount of new equipment,
| and II is expected by the receivers that
| the receipts Of the company will soon show
| a marked increase.
1t is said by those I'm a position TO know
! that owing to shortage in freight cars
the road has lost a large share In the
traffic which the steady revival In bus
mess is developing. The present arrange
| ment is to add 5000 additional cars but
1T is estimated that the company needs at
least 1o.UV Lew freight cars alone Under
present conditions il Is believed the COM
pany Is losing business because Of the lack
| OF cars TO handle that which Is being Of
| fered. 1t is said that during the last six
months there has been a loss from this
cause OF at least $2tD, 900 a month and the
amount II Is shown. is getting larger each
| mohtn. IN this estimate no account Is
| taken OF business which could he secured
Tor the road from having constantly at
hand full complement OF cars.
| IL Is fact well recognized among rail-
| road men that the road with a surplus OF
| cars attracts traffic which may naturally
| oeiong TO competitor. II is said that most
OF the trunk lines get a big help in this
| direction from the lines forming the west
| ern outlets. but the roads which make an
| the Baltimore and OhIo's western line are
| wlthout equipment. and must depend upon
the rolling stock of the main stem
The Doabters.
In spite of the fact that the receivers re-
Gently asked for the additional equipment
referred to- there are some persons who do
rot believe that its acquisition will be the
| means Of adding much net revenue to the
company. member of the reorga nizat,on
committee is authority for the stater,snt
| that the company is gradually but surely
| drifting into a state OF hopeless Insolvency.
| and that reorganization OF the company
] closure.
This official said to a Star reporter.
rake Tor instance, the report OF the COM
pany Tor the year ending June 80 1897. and
WI, wna. does II show? A deficiency OF s1.l17,-
| II, to which must be added at least geo
Wo Tor deferred car trusts equIpments ana
| Wheeiage payments. and cash sinking fund
! requirements an increase of $5O0OOO In
oiis payable and loans, not counting the
| Item of $I,290000 Baltimore Belt railroad
| notes, which for the first time found It's
| way into the Baltimore and Ohio balance
sheet and an increase of s50O.ooo in fixed
] charges. In addition to this there was
| charged to construction, 81 ,S95 498 81. and
| IL Is questionable whether at least 81 OO0 -
wv should not have gone in to operative
| expenses.
| Coal Trade Demoralf.ed.
So much for last year. Now what do we
| "'iu 'his year! Nearly every road Ia the
country showing very largely increased
| earnings except the b. and o., which, from
| the extraordinarily meager reports made lie
showing very little gain in gross and from
| the failure to mention net earnings prob
| ebly showing no increase over last year
Again, the coal trade, which is the class of
| business upon which the b. and o. is large
dependent. is fearfully demoral allied and
| rates are decidedly lower than last year
which were considered suicidal Further
| the receivers are going on creating new OBJ
| hgations. and. although they have purchas-
ca snousands OF cars, are stil trying for
more, and are attributfng the bad business
OF the road to a lack Of equipment. In ad-
dition tc the miserably poor rates for coal.
| the b. and o. has lost this year. as / am
creaioiy INFORMED, a large portion Of it's coal
trade Again. the obligations of the COM
pany are increasing all the time. Begin
ming with July next the company must
pay as fixed charge for three years $2Oc-
Oo per annIm to retire the 1854 coo b. and
o. main line receivers certificates. issued
Tor the purchase of steel rails and the car
contract obligations authorized by the court
impose annual fixed charges running for
years.
Conflicting Interests.
There are several conflicting and antag-
onistic interests which must be reconciled
sc mehow. either through compromise or
by fight to the finish and a survival OF
the fttest j. T. Morgan & Co. are back
ing the holders of the consolidated mort
gage, the Chicago division Parkersburg
branch and Pittsburg and Connellsvile first
consolidated bonds; Speyer & Company are
supporting and backing the interest OF the
Pittsburg and Connellsville second consoli-
dated mortgage, and Brown Bros end
others are looking after the eight million
IA per cent bonds. the six million Cleve-
debt secured by collaterals, and other
claims. Then We have the Central Ohio
people to deal with; also the Sa1dusky
Mansfield and Newark. Columbus and Gin
stockholders, including the state of Mary
land AID the holders OF b. and o. first and
second preferred stock. are to be consid-
cred when the time of settlement arrives.
Foreclosure q Necessity.
Nov, whit will be required to close I'D
this multiplied conglomeration? Foreclos-
ure and reorganization. And what will
reorganization require? First the raising
Of fresh capital, say, from sc, 200 900 TO
$s5. O00.O 600. to pay OFF the receivers certif-
Gates and car and equipment obligations.
which must be retired. to redeem certain
securities hypothecated, to secure borrowed
money, the consolidation coal stock the
stock of the Philadelphia branch, Central
Ohio and other stocks ard bonds row held
to secure borrowed money, must be recov-
cred, as the B. and o. cannot afford TO lose
control of the properties represented, and
must complete the reha utilization of the
property and pay the expenses OF reorgan-
ization.
Second must come readjustment Of the
present securities of the company by a
scale of interest all around and by tho
scaling OF principal where required, the
basis of such readjustment being the indi-
vidual earning capacity of the several and
individual properties in the system. No
other basis of reorganization lis possible.
Third will come a provision whereby the
B. and o. company will be supplied with
working capital, upon which to draw for
future requirements. 1t win take a smart
head and a long purse to work out the
problem"
GOLD WILL NOT PAY FOR LIFE.