Evening star., 1898-03-25
M ORGAN PROPOSAL
qEiH
Purchase Of Maryland Interest in B.
and 0.Railroad.
SHARES IN WASHINGTON BRANCH
Rivalry Between, Morgan & Co.
and Spesel Syndicate.
EXPERT EXAMINING BOOKS

1t Is reported in usually well informed
quarters that ]. P. Morgan & Co., or what
Is more properly known as the Morgan
syndicate, is about to submit a PROPOSE
ton to the state Of Maryland for the Dur
chase Of its interest in the Washington
branch of the Baltimore and Ohio railroad
This interest amounts to $50 shares. or
one-third Of the total number issued and
with other securities cost the state about
sJOO,OOo. 1t is now believed to be worth
1uny million dollars, although no inter-
est has been paid on 1t for about a wear
The ownership of this stock would not
give the Southern Railway Company.
which, as Is we'll known, Mr.. Morgan owns.
a right to enter the city Of Baltimore over
would undoubtedly place the latter in a
position to obtain with Mr. Morgan's in
huence all the privileges in that direction
that 1t might ask for. 1t is believed nv
some that If Mr. Morgan SERIOUSLY con-
templates acquiring the stock in question
II Is part OF his plan to eventually con-
troll the entire Baltimore and Ohio system.
1t Is no longer a secret that both the Nor
gan syndicate and the Speyer & Com
pany syndicate are anxious to reorganize
the Baltimore and Ohio railroad, for, apart
from every other consideration, the party
who shall be able to do this will make a
gOod-sized fortune out of it,
AT the present time Speyer & Company
seem to be taking the most active stems
IN that direction and are having an ex-
pert examination made Of the books and
accounts of the road by the well known
accountant, Mr.. Stephen Little who .xam
ined the affairs of the Baltimore and Ohio
company after the appointment of receiy-
ers.
Purpose Made Manifest,
The purpose of the Morgan syndicate to
prevent the Speyer syndicate from securing
any legal advantage over the former was
made manifest al Annapolis yesterday af-
ternoon Mr.. James l.. McLane a member
OF the Baltimore reorganization committee
OF the Baltimore and Ohio, appeared before
the Judiciary committee of the MARYLAND
legislature. and. after stating that he rep
resented the Morgan interests asked an
amendment to the bill for the reorgani-
zation of the system which has been al
ready passed by the house of delegates So
as to read that Nothing in this act shall
purchasers from organizing under the gen
eraf law
The amendment was at once antaponized
by the attorney for the speyer syndicate,
put the Judiciary committee. assured Mr.
McLane that his suggestion would receive
careful consideration
Increase of business
MIR. Little Is said to be endeavoring to
ascertain whether there is good ground for
the claim that the business of the Ralti
more and Ohio road has increased SO much
since the receivers 1ave took hold of it as
70 justify the tmmense expenditure which
mas oeen made during that period. 1t will
oe remembered that MI. Little in a prc-
vlous report accused the manaeemsnf of
the Baltimore and Ohio company that is
tnose IN control before the receivers wera
placed IN charge) of falsifying the books
To nf
and f1gures, and he intimated that sxceot
Tor the payment Of unearned dividends
the Baltimore and. Ohio. company would
nave been solvent. '-G. =.
The last statement of the b and q cnu1.
pany shows quite an Improvement in net
earnings. For the eight months ending
February % the figures given out show
gross earnings Of, SIS, s,O16.2s4; operating ex-
penses. Sl3, 1908; net earnings, 81 $50 TIL
Ihis Is an increase Of 1860 $40 over the
same period last year. If the same ratio
or increase in net earnings is maintained
during the balance of the year the Balti-
more and Ohio company will. It is believed
earn about $1,00O,OO increase over last
year.
AT the time of Mr.. Little's report last re-
1erred to 1t was stated on his authority
that there was in the treasury of the Balto-
more and Ohio Railroad Company over
$1,oOO. .oOO to the credit of the Washington
branch, OF which sum the state of Mary
land was entitled to one-third Notwith-
standing this large balance on hand. the
company has defaulted in the payment of
the last dividend to the state, as a result
CT which the public school fund has been
seriously embarrassed 1t Is further as
serted that. so far as can be ascertained.
no effort has been made upon the part of
the railroad company to account TO the
credit of over 100000, or proper reason
given for its failure to pay to the state its
regular dividend on the stock.
Before the Lesislature.
In consequence of this state of affairs, a
Dill has been introduced into the legislature
OF Maryland directing the attorney general
to take such proceedings in the case now
pending in the circuit court of the United
States for the Maryland district, in which
more and Ohio Railroad Company. as shall
De adequate and proper for the fullest as
sertion and protection of all the rights of
the state OF Maryland in respect to its own
ersn1p IN the stock Of the Washington
branch OF the company, whether by way Of
dividend or otherwise
Ihe future ownership and control of the
baitimore and Ohio railroad is involved in
time that there is no probability that the
system Will be dismembered, and yet the
PONDS OF one part of the line are in the
hands OF one syndicate and the bonds of
another portion controlled by another syn-
dicate each of which is bitterly antagonis-
tic to the other The bonds of the Chicago
alViSloh, the Pttsburg and COnnelisville or
Pfttsburg division, the Parkersburg branch
ana what Is known as the consolidated
mortgage OF 1888 are In the hands Of the
Morgan people, while other issues are con-
troiied by the speyer syndicate. II each
OF these syndicates should foreclose on its
holdings 1t would 1t is believed, be almost
impossible to prevent division Of the sys-
tenn
Chance for the Southern.
Should the Morgan syndicate buy the
state Of Maryland's interest in the WASH
ington branch. itiwould. 1t is believed, be
made use Of to siye the Southern Railway
Company direct and Independent line
from Washington to- the north. and the
lack OF a link between Washington and
Baltimore is all that prevents the South
ern from running its own trains from New
Orleans through to New York. Mr.. Nor
gan being practically in control of the
bonds Of the Philadelphia division of the
Baltimore and Ohio, the owner of the
Philadelphia and Reading and having
great weight in the management of the
Jersey Central. The last two-named roads
form the route over which the Baltimore
ana Ohio trains are run between Phila-
delphia and New York
There are some persons who are posted
as to the financial history Of the Balti-
more and Ohio, Railroad Company who
say that the present management of the