The evening times., 1898-09-21

be paid out of the income, and unless
some plan for the reorganization of the
company's affairs be speedily adopted and
consummated, the interests Of the stock
holders will be altogether destroyed by
the accumulation of debt"
The proceedings threatened by. bond
holders before the reorganization was
agreed upon, the answer also states,
would result not only in sacrifice and
loss to the Stockholders and the disrup-
tion of the railroad system, but there
would be a decree in each foreclosure
suit for large sum, aggregating not
less than SIS 00e. .000"
The petitioners, the answer states, hold
stock TO the aggregate amount of 81 977-
955. 20. "As such. it continues. 'they do
not seek to enforce any claim against
the company or its property in the Gus
tody of the court, but TO prevent the
owners of the other SOS, ,022 03i 80 capital
stock, az well as the holders of the COM
panys bonds and other obligations, from
olsposing of their respective holdings
The injunction asked hY the petition
ers' II is asserted, would so interfere
with the property rights ef the holders
of the company's stocks and bonds as to
deprive them OF their property. The acts
sought 10 be restrained are acts which
every owner of property has the right to
do by virtue of his ownership
IL ! MED in the answer that there is
every sonable expectation that the
hearing of tha.Jshns Hopkins University
suit, involving the status of the first pre-
ferred stock, Hilt"be advanced in the Su-
preme Court of the United States III
advanced" the answer states, 1.-THE case
cannot be heard before February or
March, 1899
The appoirtrnpnt of the Baltimore and
~
the financial obligations assumed by
them under the courts order are recited
in the answer. Figures are also given to
show the improved conditions of the
property under the receiverShip. The
| gross earnings have increased from $23,-
! 9i.I6 for the year ended June so. 1885,
| and S25 $50 I22 for the year ended June 3D.
| 1897. to 81, I'D. $50 for the year ended June
/ 80, 1895 The earnings over operating ex-
| penses were $7,4 6s2 last year. against
| s. $40 G2S in 1886 and 81. 36l. .361 In 1896. On
! June 30, 1898. the company owed S.. 1854. .652
| for overdue coupons and interest and for
rentals of leased lines. This indebted
ness, the answer states. is constantly in
creasing in amount.
The reorganization plan is treated in more
| detail in answers filed by the Mercantile
! Trust Company of New York and j. Pier
! pont Morgan and others. OF New York.
These answers start out by asserting
/ that the court has never had jurisdiction
! and control over all questions relating to
I or affecting the personal rights of the
bondholders, particularly in connection
with the carrying out and consummation
! of the plan Of reorganization. They state
that the court has full power and juris-
( diction to decree a sale of the property
4 and assets of the Baltimore and Ohio. in
case IL should be right and proper to sell
the road. In case of such sale. the an
/ swers also state, the claim, If any, of the
holders of the first preferred stock may be
/ reserved and protected in the decree of
/ the court.
Under the plan and agreement of reor-
ganization, the answers state. ii may be-
! come necessary 10 provide for the sale of
/ the property and franchises of the Balti-
more and Ohio Railroad under foreclosure
Of the mortgages on the property. 1t is
| denied that the reorganization plan under
/ takes 10 provide for the settlement of the
pri3rities of the various interests in the
railroad property and franchises or sets
any arbitrary or other valuation on those
! respective interests. On this point the
answers state:
] The terms proposed in the reorganiza-
ton plan and agreement TO the holders of
the different liens and claims against the
Baltimore and Ohio Railroad Company
and its property and franchises are just
and equitable. They have been assented
10 by over 9S per cent in amount of the
holders of bonds secured by mortgages
upon the property and by the holders of
over 80 per cent of the second preferred
and common stocks of the Baltimore and
Ohio and also by nearly 10 per cent of the
holders OF the first preferred stock. No
/ objection has been made to the provisions
Of the reorganization plan by any holders
of the securities of the Baltimore and
Ohio except the petitioners.
The reorganization plan and agreement
were prepared after the decree of the
court filed July Il. 1886, dismissing the
petition Of the Johns Hopkins University
and in accordance with the determination
Of the court as shown by the decree. that
1 the holders Of the first preferred stock
were not entitled to any first charge or
lien on the gross profits of the Baltimore
and Ohio. That determination and decree
Of the court are still unreversed and re-
main in full force and effect. The reor-
ganization plan and agreement could not
have been properly based upon any other
estimate valuation or consideration OF
the first preferred stock