Evening star. [volume] (Washington, D.C.) 1854-1972, 1898-03-07
Opinion Of Bill to Reincorporate Bal
timore and Ohio Railroad.
VIEWS OF MEMBER OF The COMMITTEE
Discussion of the Effects of the
Proposed Legislation.
THE OUTSTANDING BONDS

financial circles that the introduction of the
bill in the Maryland legislature for the re-
incorporation of the Baltimore and Ohio
Railroad Company is a practical declara-
ton of war between Messrs. Speyer & Co
and their associates on the one hand, and
]. p. Morgan & Co. Of New York and the
Baltimore reorganization committee on the
other. 1t is certain that one of the re-
ceivers. Mr.. John X. Cowen, is heartily in
sympathy with Speyer & Co., and it is be-
lieved that Mr.. Oscar G. Murray, the other
receiver, also favors them. The position
of the latter is. however, somewhat in
doubt. owing to the anticipation, it is said
that should Messrs. Morgan & Co. reor-
ganze the road, Mr.. Murray will be desig.
mated as president.
One effect of the steps taken in the direc-
ton of reorganization of the road has
been to advance B. and o. first preferred
stock % per cent. This has for some time
past sold at $40 per share. but at the close
of last week on the Baltimore stock ex-
change. brokers who were known to be
acting in Speyer & Co.'S interest were Of
fering $50 for it. A member of the reor.
ganzaIion committee tolG a Star reporter
that it was impossible to secure any infor.
nation as to what was really meant by the
bill above referred to. The only definite in
formation that could be secured was that
it was drawn in the office of Mr.. John X.
Cowen. who is not only president of the
company and one of the receivers, but also
the general counsel
Object in View.
Continuing, this gentleman said that "tIe
object Of the proposed act appears to be
the formation of new corporation to ac-
quire and own all the property of the Bal
timore and Ohio company, and the infer
fn he dra ;,,tro =,
that Mr.. Cowen and his New York friends
have about reached the conclusion that 1t
will be impossible to reorganiZe the COM
pany except through the drastic process of
foreclosure. This has always been nv
opinion. and l think it reasonable one
1t is based upon the belief that the volun-
tary consent of bond and stockholders to
make the necessary sacrifices to relieve the
b. and y. from its embarrassments cannot
be obtained. and that it will require fore
closure proceedings to compel such con-
cessions.
'Of course / may be mistaken. but it
seems to me in conflict with human nature
10 expect such willing and voluntary sacri-
flee as will be necessary. l understand
ard believe 1t to be a fact, that Messrs.
Speyer q Co and their associates have pre-
pared plan of reorganization of the B.
and o. company. Speyer & Co.'S is very
strong house. and able to do and perform
anything 1t may undertake in the way of
whether the bOndholders can be persuaded
to make concessions in principal and inter-
est and the stockholders to paw large as
sessments. Judging from the fact that ]
r. Morgan & Co. control the consolidated
mortgage bonds. and are supposed to be
behind the bonds of the Chicago division
the Parkersburg branch and the first con-
solidated mortgage bonds of the Pittsburg
and Connellsville Railroad Company / pre-
sumo Messrs. Speyer & Co.'S plans will
he
tage OF the rev proposed charter is that of
Mr.. Cowen and his associates do reorganize
the B. and o. company they will be in po-
sition to control it and name it's officials
A Proposed Amendment
1t is said that when the company's re-
organization bill comes up in the senate of
Maryland it is the intention of Mr. Croth-
ers, the member from Cecil county, to pro-
pose amendment which, if adopted. will
make the bill imperative until the COM
pany shall have surrendered Its charter
rights to exemption from taxation. This is
done to make sure that there shall be no
escape from the provision of the constitu-
ton governing amendatory legislation. The
freedom from taxation, which is now en-
Joyed by the Baltimore and Ohio, is part
of the original charter of the company,
granted over seventy years ago, when such
a grant was not prohibited by the consti-
ing to an estimate. from $3.50, 900 to 5000, 900
a year. In the event of foreclosure this
concession would be lost as it would be
necessary to reorganiZe under a new char
ter.
There has been an effort made in the leg
islature for years to subject the Baltimore
and Ohio railroad to taxation. To this end
an amendment to the state constitution
was adopted which prohibits the general
assembly from amending the charter of
any corporation except upon condition that
such corporation shall surrender all claim
for exemption from taxation. 1t is also
provided in the constitution that any cor
poration chartered by the state which shall
accept. use, enjoy in any wise avail it
self of any rights, privileges or advantages
that may be granted or conferred by any
general or special act, shall be conclusive
ly presumed to have thereby surrendered
any exemption from taxation to which it
may be entitled under it's charter and
shall be thereafter subject to taxation as
if no such exemption had been granted in
its charter.
No Advantage Given.
The belief in financial circles is that the
bill does not give any advantage so far as
the reorganization of the property is con-
cerred to any set of men. To maintain the
company as Maryland corporation and to
secure the absolute retention of the general
offices in Baltimore charter would have
to be procured from the Maryland legisla-
ture, but the successful reorganization OF
the company does not depend upon getting
the charter from that state A charter
given needed authority might be obtained
In another state by maintaining headquar-
tiers in that state.
Much interest is felt in the personnel OF
the incOrporators. These are Louis FitZ-
gerald. Henry Bulge. Eugene Delano and
Edward r Bacon all OF New York and
,Inrc of hn yorly