Evening star., 1898-09-20
The Real Meaning of the Foreclo-
sure Suit Brought Yesterday.
TO GUST THE PRESENT RECEIVERS
Effect Of the Move on Improve
ments Promised Here.
NO MONEY FOR THEM


the Baltimore and Ohio Railroad Company
The Star of last evening, and special dis
| patch to The Star from Baltimore stated
| that the Mercantile Trust and Deposit
Company of Baltimore, as trustees of the
consolidated mortgage, yesterday brought
suit in the United States circuit court of
Baltimore for the foreclosure of that mort
gage. the reason given being that the COM
pany had defaulted on the interest since
the 1st instant.
This proceeding has struck some persons
as being rather unusual, as most mort
cages issued by the Baltimore anl Ohio
Railroad Company contain a provision that
suit may not be entered for foreclosure
until after there shall have been a default
| in interest of at least three months. This
consolidated mortgage, which, as hereto
fore stated in The Star, amounts (. S29,
GG000O, was issued under peculiar crcum-
stances. and contains unusual provisions.
Previous to the date of the mortgage The
president of the Baltimore and Ohio rail-
road found that the road was in such les
perate straits for money that unless d very
large sum was raised Immediately the read
would be forced into the hands of receiv-
ers. In this dilemma the president of the
company appealed to j. p. Morgan &
Co, who had on a previous occasion
come to the company's assistance inan-
cially, to again help to bridge over the
difficulties. Mr.. Morgan responded favor
ably the threatened disaster was averted
and the consolidat led mort gage was issued.
The entire amount was taken, as hcreto-
fore stated in The Star by j. L. Morgan
& Co., and the proceeds were used to
pay off a vast amount of accrued in
debtedness, which threatened the destruc-
ton of the Baltimore and Ohio system.
Effect of Foreclosure.
This mortgage was executed during De-
cember 1887, anl covered the entire line
of railroad of the Baltimore and Ohio, with
all lands and tenements on the line of the
railroad. except those occupied in Balti
more as general Offices, and which 10 not
belong to the Baltimore and Ohio COM
pany. 1t also covered the rolling stock,
tools and implements of the Baltimore and
Ohio, also the first mortgage bonds of the
Wheeling, Pitlsburg and Baltimore Rail
1cad Company. and rentals, tolls and
profits to be derived. While the object OF
the suit filed yesterday was to authorize
the foreclosure of the road it is not be-
lieVed that foreclosure will be resorted to
except as the last resort. In the event of
foreclosure, the Baltimore and Ohio COM
p2ny viii by existing law he compelled to
surrender the old charter, which contains
tax exemption which of itself is esti-
ated to be worth at least 5000 900.
The amount claimed to be due and for
which suit for foreclosure was brought
is but $47O90O, a mere trifle to men with
the money at their command that the
Speyer syndicate are known to have.
and it is believed in some quarters that
the object is more to demonstrate the
power of Mr.. Morgan in the matter than
desire to collect the overdue interest at this
time Those entering the suit also asked
for the appoin tment of receivers, which, If
granted by Judge Morris, will cause the
moval of the present receivers, Messrs.
Cowen and Murray, and this, it is believed
in some quarters, is but another evidence
that the day is not far distant when Mr..
Morgan's will be the guiding spirit in Bal
timore and Ohio affairs
Already there is talk in influential and
usually well-informed quarters that there
is to be formed a great combination, COM
posed of the Southern railway, the Balti-
more and Ohio, Reading, Jersey Central
and Great Northern. All these roads with
the exception of the Baltimore and Ohio,
have been reorganiZed by Mr.. Morgan, and
through them his trains reach almost every
important city on the shores of the great
lakes, several equally important cities on
the Pacific coast and every large city along
the Atlantic seaboard from the southern
point of Florida to Boston. Mr.. Morgan
is at this time largely intereS ted in the
Great Northern road, of which Mr.. J. j.
Hill is president, and who it is believed
in some quarters, is to have voice in the
future management of the Baltimore and
Ohio. The Great Northern extends from
Seattle, on the Pacific coast, to st. Paul,
Mimi, and from the latter city its trains
joys leased privileges. In some quarters
there seems to be an opinion that there is
sort of gap in the operations of the Great
Northern between Chicago and st. Paul,
but the fact is that the Wisconsin Central,
which not long since was also reorganized
by Mr.. Morgan, and in which it is said
both Mr. Hill and Mr.. Morgan are largely
interested, is prepared to accommodate all
the traffic which the Great Northern could
give it for long time to come.
A combination of the Southern, Jersey
Central, Reading, Baltimore and Ohio and
Great Northern, connected with which the
w NlSconsin Central would stand, to some
extent, in the relation of a leased line
would afford an outlet for the traffic of the
great northwest whose benefits are almost
inconceivable, and, it is believed, would re-
suit in benefiting the export and import
trade at Newport News and New York
with the possibility of aiding Baltimore to
some extent.
Mr.. MOrGan's Probable Intention.
The action of Mr.. Morgan, as indicated
in the suit filed yesterday, is also taken in
some quarters to mean that he not only
intends to force the present receivers out
of office if it be possible for him to do 50,
but to bring about the retirement of Mr..
Cowen from the presidency of the company
1t is open secret that shortly before the
Baltimore and Ohio went into the hands of
receivers application was made to Mr.. Nor
gan for financial assistance for the COM
pany. A very thorough examination was
made of all the Baltimore and Ohio COM
pany's affairs by parties in whom Mr. Nor
gan had confidence, and as a result Mir.
Morgan declined to come to the re5cue un-
less four men then prominently connected
with the Baltimore and Ohio snoui re-
tire from executive control. These were
Thomas NJ. King, second vice president;
VIM. F. Frick, a member of the board of
directors and father-in-law of Robert Gar
rett, now deceased; John X. Cowen, then
general counsel of the road, and E. r.
Bacon. member of the board of directors
and now president of the Baltimore and
Ohio Southwestern Railroad Company The
change Of circumstances in the Baltimore
and Ohio company's affairs months ago
retired Messrs. King and Frick; Mr.. E. r
Bacon is still a member of the board
which. however, has no duties to perform
and Mr.. Cowen is, as everybody knows
president and one of the receivers. 1t is
believed that Mr.. Morgan would not even
now take any steps to assert his power In
the affairs of the Baltimore and Ohio were
1t not that he, 1t is thought. considers that
the time has arrived wien 1t is necessary
for him to protect his interests In the COM
pany through the medium of the courts
The fact should not be lost sight of that
more than year ago Mr.. Morgan secured
permission from the United States court at