Evening star., 1898-10-27
THE B. AND O. CASE
Separate Answer of Trustees to In
junction Application.
DON'T REPRESENT BOND OWNERS
Plan Of Reorganization Has No
Connection With Title.
R A T TE-CUTTING RGES

Inc separate answer of William F. Burns
and William keyser. trustees, to the ap-
pl,cation for an injunction made by the
state of Maryland and the johns Hopkins
University to restrain the foreclosure of
the mortgage on the Baltimore ana Ohio
court at Baltimore yesterday by ex-Judge
William A. Fisher, the counsel of the
trustees.
In their answer the trustees say they
are advised by counsel that the owners of
the ponds OF the road, the payment of the
Irlncipal and interest whereof is secured
by the mortgage are in no way represented
by the trustees
Inc plan of reorganization, they say and
the acceptance or rejection Of it by the
pondholders, has connection with the
tltie held by them or with the performance
Oh any duties. The offers made under the
Eian. 1t is claimed, are in no legal sense
coercive ubor the bondhoders, and are
not within the cogniZance OF the court
'lnasmuch, however," SAYS the answer
as one of the aVerments of the petition
hled on July % is that the plan of reor-
sahlzat1cn is unduly favorable to the said
bCndholders, they deem it to be their duty
IN protection of their rights as trustees and
OF those of the bondholders, to answer so
much OF the petition as relates to such in
terests
Their Denials.
They deny the allegation in the petition
lhat the court has acquired jurisdiction
over all questions relative to or affecting
the personal rights of all the bondholders
under the several mortgages executed by
the company, and say that such iurisdic-
ton, with respect to the bondholders. re-
lates solely to the proceedings for the en-
fcrcement of the mortgage and to the dis
trlDutlon OF the money to be derived from
the mortgaged property by sale or other
wise.
1t Is a so dered in the answer that the
plan Of reorganization is unduly favorable
to the bondholders under the mort pases
and especially to the holders of the bonds
issued under the terms of the mortgage
executed to the trustees or that 1t is unjust
In any respect. They have no connection
with the holders of the bonds, the petition
ers allese, and are not informed regarding
the motives which actuated them in FORM
ing the plan. They are of the opinion, how
ever, that it was the exercise of proper
business prudence to cause the reduction
in the fixed charges at the earliest period
practicable, and in putting the plan IN
operation. to take advantage of monetary
conditions favorable at the time, but liza
bic to be affected by unforeseen contin-
gencics.''
The trustees further answer. upon ad
vice of counsel, that If it were necessary
that the status of the capital stock, issued
by the company under the act of 1885
should be ascertained it has been already
stated in a decree signed by the court
Regarding the default in the payment Of
interest, the petitioners are referred 10
the answer of the receivers.
''Whatever may have been the causes
which led to the default" says the answer,
lit is their right to declare the prinCi-
pal to be due. in accordance with the terms
of the mortgage of the debtors and they
submit that no injunction should be issued
to prevent the full and untrammeled ex-
ercise by them of this power conferred
upon them by the mortgage
The Rate-Cutting Case.
There promise to be interesting develop
ments in the in which the Baltimore
and Ohio company has been charged be-
fore the interstate commerce commission by
the Southwestern Traffic Association with
the cutting of rates. Almost all Of the lead
ing Baltimore and Ohio traffic officials il
the east and west, il is stated, have been
subpOenaed to appear before the commission
at its meeting in st. Louis on November l.
and they may be relied upon to hit back at
their accusers.
This is the first case since the passage of
the interstate commerce law in which q
railroad official has laid before the COM
mission what he considers evidence of rate
cutting on the part of Il railroad. The pen
atty, in case of conviction, is a heavy fine,
prisonment. Present prospects that the
inquiry will be an exceedingly far-reaching
one. for, 1t is said, the officials of the de-
fendant road have promised to Law before
the commission all evidence they may have
of Illegal transactions the part of lines
belonging to the Southwestern Traffic AS
sociation. The membership includes all of
the lines doing business in Texas. The Bal
timore and Ohio Railroad Company is not a
member of the association and did not sub
scribe 20 the agreement which 1t is charged
81, til.
fact the Baltimore and Ohio officials say,
they will make things lively for Mr.. Camp
bell. the chairman of the association who
filed the charges
When the Southwestern Traffic Associa-
ton was formed much comment induc-
ed by clause in the agreement obigating
the chairman to lay before the interstate
commerce commission or national or state
courts any evidence he might have of H.
legal transactions the part of any mem
Der of the association.
Provisions of the Compact.
This compact also provides that the
chairman of the conference committee shall
begin proceedings before the Interstate com
merce commission or the courts against
any connecting line found guilty of illegal
practices, and that all traffic relations be-
tween such connecting line and members
of the association shall at once be suspend
ed.
The Baltimore and Ohio officials who have
indignant at the course pursued and have
promised that they will present to the COM
mission all correspondence referring to Tex
as triffic that has passed between them and
the Southwestern association. 1t is declar-
ed that some of this correspondence will
prove decidedly interesting.
Officials of lines belonging to the organ
ization of which Mr. Campbell is chairman
are indignant over the proceedings They
declare they were fully in earnest when
they adopted the agreement and, had the
tpxt
them, there would be no reason for COM
plant against the chairman. But that he
should have picked out connecting line,
one which did not sign the agreement pro-
viding for prosecution, the first to feel
the effects of the compact was ill-advised. =
A NefariOus Plot.
From Puck.
Sam-"Ef yo's gwine ter be de candidate
colonel. 1 kin Iut yo' on ter some queer