The times., 1898-07-31
REORGANIZERS ENJOINED.
Holders of 3D. & o. First Preferred
stock Make a Fight

The holders Of the first preferred stock
of the Baltimore and Ohio Railroad Com
pany have called a halt upon the syndi-
cate of New York bankers which has
undertaken TO reorganize the road.
1t is thought that with this ponderous
obstacle in the. way considerable dill
Guilty will be experienced in carrying out
the original plan of reorganization with
out modification.
AS it is the matter can hardly be set
tied without long litigation.
The obstruction was placed by the op-
position people among the first preferred
stockholders. when. through their action.
Judge Morris of the United States Cir
cult Court. at Baltimore, issued an order
requiring the interests representing the
bondholders concerned in the reOrganiza-
ton of the property to show cause why
an Injunction should not be issued re-
straining the carrying into effect of the
plan of rganization- An answer must
be filed before September 10Th next.
This is the first legal attack made upon
the new plan and IT now dawns upon the
minds of the reorganizers that they will
encounter all kinds of difficulties in car
rying the proposition into effect.
The action is the outcome of the dis
satisfaction caused by the terms which
were offered 10 the holders of the first
preferred stock. Under these terms each
share Of first preferred stock was to be
assessed g. and $50 per cent of new
preferred stock, and % per cent of new
common stock were 20 be given in ex-
chang4
TIE first preferred stocx used TO pay a
per cent dividend regularly. When the
receivers of the road were appointed
however. they took the stand that they
had no authority TO pay a dividend. and
the stockholders have since been losing.
The stock was regarded as a particularly
strong security as il was pretty generally
believed that 1t was a perpetual lien upon
the gross receipts of the company The
obligation to pay per cent interest was
also part of the original contraOts upon
which the stock was disposed Of
The total issue of this stock is s.. 900. .010
and of this amount Johns Hopkins Uni
versity. which has done 50 much for Bal
timore n educational and scientific ways
owns about 81. 900 900. The action of the
court is of the utmost Importance TO the
university. for upon ii the very existence
of the great institution may depend The
university is dependent in a large meas
ure upon the income from these holdings.
and when the receivers refused to pay
the usual dividend. the university was
placed in dire financial straights. which
necessitated the raising of $230. 900 by the
citizens of Baltimore.
The petition before Judge Morris repre-
sents about 5000 shares of stock of the
first preferred class. When originally is
sued the first preferred stock went TO the
State of Maryland for its subscription to
aid in the construction of the road. The
State later disposed of all It's holdings
with the exception of 1.1S1 shares. which
belong to the school fund On account of
these holdings the State joins in the in
junction petition.
The city of Baltimore also held a large
proportion of the first preferred stock.
but disposed of it during the regime of
Mayor Davidson several years ago.
Papers are now being prepared for the
sale of the Baltimore and Ohio Railroad
under a foreclosure of the mortgages
and unless the first preferred stockhold-
ers deposited their holdings by tomorrow
the suggestion was made that they would
have been frozen out so they secured
the injunction.