Evening star., 1898-10-13
AN SWERS TO PETITION
Legal Proceedings in Matter of Foreclosure
on B. and O. Road.
Claim That Earnings of the Company
Have Always Paid Taxes
and Interest.


Ohio railroad affairs the filing, a day
or two since in Baltimore OF the answer of
the Mercantile Trust AMI Deposit Company
endeaVoring to prevent foreclosure of the
road The answer makes reference to a re-
cent official statement by Receivers CoWen
and Murray to the effect that it will be
impossible for them TO paw from the in
come OF the road the fixed charges and re-
celVers maturing obligations after paying
operating expenses, and claims that the
earnings of the road have always been suf-
Hclent to pay $2n0,ooO a year for taxes ana
me interest on the preferred stock so that
II the road should be sold under a foreclos-
ure and the exemption from taxation given
by its charter should thereby be extfnguish-
ed the petitioners would suffer no loss or
INJURY II their claims to 9 permanent lien
should be hereafter established. The bond
holders are enti led TO enforce the r1Ch. ;
given by the mortgage. and il is not mater
ial to the rights of the bondhoid- RS nd
trustees how the defaults occurred.
Consolidated Eond interest
1t will be remembered that reccntly c,,un
sci for the hoiIers Of Baltimore ana Obio
first preferred stock filed Il petition in court
asking that the receivers of the 3 9It.rlorc
and Ohio company be compelled to pay :he
interest Oh the consolidated mor gage bonds
claiming that the company had earned lie
interest on the same. and asking for a re
straining order to prevent fCreclns1Ire Of
the mortgage AMI sale of the properly. The
case is set for hearing the 21st instant
MeanWhlle efforts are being nlde TO IN
duce the holders of this stock to conprn-
mise their claims with the syndicate L. is
peheNed in some quarters that the first pre-
ferred stockholders would be much bet
ter OFF by agreeing to the terms of the syn
dlcate. for the reason, as alleged. that the
result of an unfavorable decision IN the Su-
preme Court of the United States would be
very disastrous. On the part of he first
preferred stockholders it is believed lhe Su-
preme Court will prote,: their full legal
rights and will require full pay men! % I've
made out of the proceeds of the sale Of the
property. provided the right of priOri.y can
be established. But The right OF priority
must be proved, and this can on'y be done
by a favorable decision by the supreme
Court of the United States.
Central Ohio REORGANIZATION.
Much interest continues to be felt in the
proposed reorganization of the Central
Chic system and its branch lines. all of
which are controlled by the Baltimore and
Ohio AS long as the Baltimore and Ohio
Company was solvent and able to pay the
rental of the Central Ohio Company, which
leased it many years ago. it is said. the
stockholders of the Central Ohio could de-
pend upon receiving dividends but as soon
as the Baltimore and Ohio passed into the
hands of receivers and the Central Ohio
vas thrown upon it's own resources being
obliged to supply the funds for improve
n,ents and betterments and for mainten-
arce of way and equipment. there was no
money left for dividends
Regarding the cash reuuirements and
provision therefor, and the condition of the
Baltimore and Ohio company as reorgan-
lied upon the consummation of the plan,
the reorganization committee says the
needs are as follows: Unpaid and accrued
interest on Sandusky, Mansfield and New
ark 4 per cent bonds, about $3.50 900: ex-
tensions, improvements and equipments,
about s3.Voooo; syndicate compensation
and expenses. about $3.50 600 or a total of
S3,S0o0o0. which is to be raised from the
sale of S4,OUO,0OO frst-mortage 31a per cent
bonds.
Condition After the Change.
Upon the completion of the reorganiza-
ton of the Baltimore and Ohio railroad
Company and the consummation of this
plan, the condition of the Baltimore and
Ohio company, as reOrganzed, will be as
follows: The net earnings from operation
together with earnings from miscellaneous
sources, for the year ending June 80, 1885
including net earnings of the Central Ohio
system and Pittsburg Junction Railway
COmpany-were SS.547 43:, From this will
have to be deducted the sum of S2J1 900
representing the decrease in the amount of
miscellaneous income which will be occa-
stoned by the prospective sale of securities
and the cancellation of sinking funds in
vestments, under the reorganization of the
Baltimore and Ohio Railroad Company,
dated June -, 1898. This leaves SS 2DG 433
From this must also be deducted the fol-
lowing fixed charges of the Baltimore and
Ohio: On $4,000 900 prior lien 3I2 per cents,
81 ,4JO, 900; on $4,000, 900 new 312 per cent
Pittsburg Junction and Middle Division
mortgage bonds
900 first mortgage 4 per cents. s.. 600 600;
estimated rental. including 4 per cent on
SG,OOO,OOO Belt Line railroad mortgage
bonds, and excluding rentals of Central
Ohio system about $500, ,OOO taxes S544
I9i: terminals, S202 900; ground rents and
mortgage interests, S75 900; total, ST, ,296, 1874
leaving surplus over fixed charges of
about 81 .Gt9 ,639. In case, however fore
closure shall be found necessary the ex-
emption from taxation under the charter
of the old company may be lost, and the
amount of annual taxes added to fixed
charges.
Combined Earnings.
The combined earnings of the Central
Ohio system and Pittsburg Junction Rail-
road Company, after deduction of taxes
are stated to be sT56, ,775. 81, and the interest
charges on $4,000 900 31a per cent Balti-
more and Ohio Railroad Company, as re-
organized; Pittsburg Junction and Middle
Division first mortgage bonds. which are
expected TO be ultimately a first and only
lien upon the railroads, or securities repre-
senting the same, of the Central Ohio sys-
TEN and the Pittsburg Junction Railroad
Company, is S525, 900. In any event. the
Baltimore and Ohio Railroad Company as
reorganiZed, 1t is claimed, WILL upon the
consummation OF this plan, show a sur
plus of net earnings over fixed charges of
nearly 81 100000 annually.
Few Bonds Presented for Payment.
Only $1,000 in Pacific railroad bonds have
been received for redemption at the Treas
ury Department within the last four days
The treasury made a favorable offer to in
duce the holders of these bonds to turn
them over to the government, but the in
ducement has not been sufficient The fact
that only few have been presented for
redemption is considered by treasury ofi-