Evening star., 1898-10-24
Suit for Foreclosure of B. and O. Con-
solidated Mortgage.
STATEMENT BY ]. P. MORGAN & CO.
Case Pending in the United States
Supreme Court.
NOR DISPROV WE'D

The hearing of the suit for the foreclosure
Of the consolidated mortgage bonds of the
Baltimore and Ohio Railroad Company
which was set for Friday last has been
postponed until Monday next, at which
time the most important proceedings rea-
tive to the control of the road will be be-
gun in the United States district court at
Baltimore. Whatever the decision of the
lower court may be, it is almost certain
that the case will reach the United States
Supreme Court, as neither party will feel
entirely satisfied until the court of highest
resort shall have passed upon it. There are
so many suits pending in various courts
against the b. and O., or the company and
the receivers, that authorized state
ment by J. p. Morgan e Co. in reference
to the consolidated mortgage bonds is of
especial interest.
Messrs. Morgan & Co say: Since the aD-
pointment of receivers for the Baltimore
and Ohio Railroad Company, in February
1896, W. have endeaVOred TO watch careful
ly and to take all steps necessary to pro-
tect. the rights of the . per cent conSoi-
dated bOndhulders. Almost Immediately af-
ter their appointment the receivers OK
pressed the opinion that, if allowed to issue
$5,0o0,0OO receivers certificates, to be used
for discharginS accumulated supply bills
and for making some needed additions to
the property, they could thereafter regu-
ltiiS meet the lHttEtSt Oh tHt SSNSE3i issues
of bonds for which the Baltimore and Ohio
Railroad Company was directly RESPONSE
BILE, and which constituted liens on the
principal railroads of the system
Issue of Certificates.
Recognizing the advantages likely to ac-
crue from holding together all properties
and also understanding that the greater
part of the $5,ooo,00o certificates were to be
used to discharge supply bills, which would
probably be held by the court to be prefer
entail liens, we, with others interested in
the consolidated bonds, favored the issue
of such certificates.
''Of late the receivers have been unable to
fulfill their expectations, and defaults have
takel place on several of the lines impOr
tant to the integrity of the system. Since
these defaults we have 1eit that, the object
of the original issue having failed. no fur
ther issue of certificates for any purpose
should be made by the receivers and there
fore We have opposed all such further is
sues.
In the spring of 1897 the Johns Hopkins
University filed in court an application ask
ing that the 81 9Ou oul first pteferred stock
of the Baltimore and ONO Railroad Com
pany should be declaredL4 libn on the in
come of the property ahead M the consol-
dated mortgage bonds. 9iie trustee of the
consolidated mortgage flied an answer.
which was deemed ADEQUATE to set forth
the rights Of the bondholderS. A few days
before this application was to be heard by
the court, we learned that this answer ha3
been withdrawn by the trustee, and that III
its stead there had been flied another an
swer, merely formal in character stating
that the trustee had no views in the mat
ter and leaving the determination Of tn"
question to the court. The reason for this
sudden change can perhaps be given best
by the trustee, who, on inquiry. Informed
one of us that it tthe answer differed de-
cidedy With us in regard to the Balti-
more and Ohio preferred stock, and that
this was no new idea with it; that
it had held this opinion for many
years, long before it accepted the trust nf
The consolidated mort gage and that the
purpose of the company in amending its
answer was to remain in a neutral posi-