Evening star. [volume] (Washington, D.C.) 1854-1972, 1898-07-28
B. AND o. REORGANIZATION
Second Conference of Preferred Stockholders
to Be Held August /.
Circular Letter to BE Issued by
Johns Hopkins Interest.

1t is understood that a second confer
ence of holders of the first preferred stock
of the Baltimore and Ohio railroad may be
held to discuss the Limitation fixed by the
reorganizing syndicate as to the time
when securities must be deposited in order
to participate in the reorganization of the
property. The date named is August l,
and after that date the managers of the
reorganization announce that they will re-
ceive stocks and bonds not deposited, if
at all, on terms named by themselves. A
circular letter is to be sent to the first
preferred stockholders by their special
committee, composed of Messrs. John Gill,
James L. McLane and John A. whitridge,
covering the situation in regard to the
stock
The Johns Hopkins University and other
holders, controlling about 24,0o0 shares of
stock, sued the receivers to enforce the
payment of the six per cent annual divi-
dend, on the contention that it a per-
petual lien that must be paid OUT of the
gross earnings of the property. This case
was taken to the United States Supreme
Court, but the limitation the time
of coming into the reorganizatio will ex-
pire before decision can be given.
individuals May Accept.
1t is stated that it is the purpose of the
trustees of the university to push Ills
suit, but individual holders who have be-
come parties thereto may, If they elect.
accept the terms offered by the reorganiza-
ton committee.
These terms provide that the pay
ment Of an assessment of 81 per share
the holders of the first preferred stock
will receive in exchange for each share
80 per cent in new preferred stock and
10 per cent in new common stock. As the
Johns Hopkins University owns about ST.
100000 of this stock, if the terms were &C
cepted the cash assessment to be paid
would amount to about $4,000
1t is believed that the Johns Hopkins
University has sold enough of its stock
to pay the assessment as above demanded,
in order to guard against any co2tingen-
cies that might arise growing out OF their
declination or neglect TO pay under the
present call.
Deposit of Securities.
1t is stated that within the past few
days Baltimore and Ohio securities have
been deposited in very large amounts with
the Mercantile Trust Company, New York,
urder the plan of reorganization, and
member of the Baltimore reorganization
committee has been informed mat enough
securities have already been turned in to
assure the success of the plan. This bank
er said:
The holders of bonds included in the
every inducement to accept the terms Of
fered. AS for the stockholders, considering
that the road will certainly be sold under
foreclosure, they must accept the terms
offered or sell their shares at current fig
ures. This, of course, does not apply to the
holders of the Baltimore and Ohio first pre-
ferred, who may elect to decline the terms
offered and stand on the chance Of obtain
ing a favorable decision in the case now
pending in the Supreme Court of the United
States. Unfortunately, if the first pre-
terred stockholders cannot substantiate
their claim, they may not receive as good
terms are now offered.
Il have been asked by many holders
whether it would be best to pay the as
sessment on Baltimore and Ohio second
preferred and common, or sell their present
holdings. My advice is to pay the assess
ment and see it out. l believe there will be
strong efforts to make the new preferred
stock dividend-payer, in which event the
new common stock, which is now selling at
equivalent to 2213, should, and probably
would, sell considerably higher
Rumored Change of Base.
There has been some interest shown in
financial circles in a report that credited
the interests reorganizing the Baltimore
and Ohio railroad with the intention to
move the headquarters of the company
from Baltimore to New York. This is the
story that has been revived periodically for
in the property became large. 1t is regard
ed abs. Ird by those familiar with the
railroad, as not only does its charter oper-
ate against such a project, but good bust
ness Judgment would not tolerate a propo-
sition TO move the machinery of operation
of the road away from the most important
city to a city that it does not even reach
over its own tracks.
1t is thought, however, a possibility of
the future that the management of the
Baltimore and Ohio may follow the ex-
ample of other big railroads and have the
executive head of the road stationed in
New York. The duties of the president OF
a big railroad are year by year becoming
closer to the financial interests that con-
troll the property, and this has caused The
location in New York of the offices of the
presidents of a number of lines In all such
cases the headquarters of the company arc
continued at some place on the line of the
road. AS an illustration of this, the South
ern railway, which IS one of the largest
railroad properties that has undergone
reorganization, maintains its headquarters
in Washington and has its president In
Vnrlr