Evening star., 1898-08-16
Statement as to the Washington
Branch B. and O. Stock.
ALL WENT TO GENERAL TREASURY
Lively Developments Looked For
This Week.
E X CHI NGE OF STOCK

ray Of the Baltimore and Ohio Railroad
Company In the suit recently instituted by
the state of Maryland and others for the
appointment of a receiver for the Washing
ton branch of the Baltimore and Ohio was
filsd in the United States court at Balti-
more Saturday, and in part is as follows:
AT no time was any special deposit made
or bank account opened for the purpose of
separating either the gross receipts or the
net earnings of the Washington branch
from tbs general corporate funds of the
Baltimore and Ohio Railroad Company.
The receipts went into the general treas
ury, and the expenditures were made out of
the general treasury, well as in connec-
ton with the Washington branch as in con-
nection with the main line and other
branches. When, on the closing of accounts
| for each fiscal year. a balance was found Of
receipts over expenditures, the amount of
Such balance was entered on the books OF
lhe company as a liability. When a dlvi-
dsnd was declared on the Washington
branch stock the amount was paid to each
slocknoider out of the treasury of the COM
pany and credit taken to the aggregate Of
| the amount so paid on the liability account
'Ihese receivers. on their appointment,
received from the Baltimore and Ohio Rail-
| road Comnany no moneys or deposits at all
| corresponding or equal to the amount shown
| by the books of account Of the railroad
company as due tha Washington branch.
Excluding the special deposits of the ter
minal mortgage, the total amount in bank
transferred by the Baltimore and Ohio
! Railroad Company to these receivers was
Sl6S,Sl1.5I, made up of balances of a few
thousand dollars each in the several banks
OF deposit used by the company from New
York to Chicago, and consisting almost
| tirely of deposits by agents of current reve-
nLe coming into their hands.
Nv hlle the books of account and reports
| OF the company Go not show the special ap-
plicatio made by the company of the sums
credited to the Washington branch, yet
these accounts and reports do furnish evil
dence tending to prove that such sums
| were not diverted for the benefit of the
| bondholders under the consolidated mort
gage OF the company or other mortgages on
| the main linz and branches of the Batf-
more and Ohio railroad, inasmuch as the
accounts and reports show that the profits
| from the operations of the main line and
branches gave balance, after paying all
| interest charges thereon, for each year
from 1873 to 1896 both Inclusive.
Dividends on the Branch stock.
THE dividends on Washington Branch
stock have always been declared for semi
annual periods. ending March 81 and Sep
tember 30 in each year. when the dividend
| period of March 81, 1896. arrived, shortly
after the appointment of these receivers
they notified the president and directors of
the company that the receivers would ad-
vance the money necessary to pay the GUS
tomary dividend of 8 per cent on the Wash
ington Branch stock for the six months
ending March 81. 1896 This they did in
expectation that their receipts from the op-
Grafton of the branch would speedily reim-
burse them in the amount paid out. and
in pursuance of their policy, approved by
the court and the parties in interest, of
avoiding as far as possible any default
which would cause unnecessary hardships
n hn1 lore of tt,o
son these receivers authorized a dividend
of 3 per cent on the Washington Branch
stock for the six months ending September
80, 1896. When the next dividend period
arrived, however, these receivers found
that. owing in part to heavy expenditures
required to place the roadway and track
of the branch in safe condition for the fast
passenger trains run thereon they had not
only paid out sums largely in excess of
their receipts from the Washington Branch,
but that there was no reasonable expecta-
| ton of reimbursing themselves from these
receipts If they paid more dividends
These receivers state as further rea-
son for their action in declining to pay
further dividends on the Washington
Branch stock that they were advised by
their counsel that the payment of such div
idends out of moneys coming into their
hands from sources other than their opera
tion of the Washington Branch stock a
preference in payment out of receivers in
come which had not been authorized by the
orders of court; and, further that these
receivers could not make such payments on
account Of the sum appearing by the books
of account of the Baltimore and Ohio Rail-
road Company due the Washington
Branch, because by such payment these re-
ceivers would divert the earnings of the
main stem and other lines in their charge
from the payment of mortgage and other
claims on the respective lines to which
under the order of the court, the earnings
OF each line We're primarily applicable) to
the payment Of the claim of the Washing
ton noh ctr khnt1
in favor of which no priority had ever been
adJudged by the court"
Developments Looked For
The present week is expected to de-
velop much of interest In the affairs of the
Baltimore and Ohio Railroad Company.
The time limit fer depositing stock under
the terms of the plan of the committee on
reorganiza ton expires Saturday next. As
has been announced by the reorganization
| committee, large majority of the bonds
eQualing 93l2 per cent, and 73 per cent of
the stock have been deposited and the
announcement made that the plan was
success. 1t is the intention as soon after
August 20 as practicable to foreciose the
property, and at the sale the road will be
bought In by the reorganization commit
tee, who will at once proceed to carry out
the reorganization plan.
After the expiration of the time limit
next Saturday the reorganization man
agers state that any securities not in by
that date will be admitted only under a
penalty. In this connection it can be
stated that any action taken by the first
preferred stockholders of over 10000
shares of this stock who have Joined the
pool and deposited their stock with the
Mercantile Stock and Trust Deposit Com
pany will be ignored by the managers. In
cluded In this pool is the first preferred
stock owned by the Johns Hopkins JTniver-
sity and the state Of Maryland. Yesterday
was the time limit for joining this pool.
The pooling is for one year, with the au-
thority vested in the committee to sell the
stock at figure to be- approved by the
finance committee Of the Johns Hopkins
University, which isesiven authority to de-
ternine the acceptable price
1t was rumored Saturday last that the
| holders of the preferred stock had offered
to sell their holdings to dhe reorganization
&C mmittee of the Baltimore and Ohio Rail-
road Company, but no authoritative state
ment could be obtained. Advices from
New York stated that a. block of preferred
stock of over z, 000 shares was offered from
Baltimore to the reorganization committee
managers at S6250 a share, but the offer
was declined.