Evening star. [volume] (Washington, D.C.) 1854-1972, 1899-07-27
PAPER BY J.K. COWEN
B. and 0. Recsivership Before Amer
lean Bar Association.
GREAT RESULTS ACCOMPLISHED
Monument to the Capabilities of
American Jurisprudence.
FULL DETAILS PRESENTED

OCEAN CITY. Md, July 27.-The feature
of the second days session of the conven-
ton of the Maryland Bar Association was
the paper on THE Baltimore and Ohio Re
cevership." read by President John X.
Cowen. The hall was filed with attentive
listeners. many of whom were ladies' and
the paper was well received.
Mr.. Cowen reviewed the receivership,
step by step, from the time the property
was thrown into the courts. on February
%, 1896 AT that time the company owed
for material and supplies and for operating
Indebtedness generally S4,325 Al.
The receivers found the property, he said,
notably its equipment and track, greatly in
need of repairs. There being no money with
which to make these repairs, the courts, on
May p, 1886 authorized the issue of So
100000 receivers certificates. The effect of
the issue of these certificates. he said, was
to prevent a further disastrous decline in
the price of the company's mortgage bonds
and to enable the receivers to make the
repairs and improvements to track and
equipment essential to take care of the
business. and at the same time pay off
some Indebtedness to shippers along the
line OF the road who had furnished material
TO the company. On the same date May
Il, 1896, the receivers asked and received
authority to issue 81 4oltHN equipment
bonds, with which to pay for seventy-five
locomotives and 5oo1 freight cars.
This arrangement, he continued. secured
fer the road large addition to its equip
ment without requiring any cash payment.
Belt Line and Terminals.
Mr. Cowen reviewed the work of the
Belt Line Railroad Company. which built
the rail connection between the main line
of the Baltimore and Ohio and the Phila-
delphia branch at Bay View including the
tunnel under Baltimore city. In order to
complete this connecting link, receivers
certificates for $3.50. 900 We're issued on De-
cember 1, 1896, secured by a special lien
upon the properties of the Maryland Con-
struction Company, including a portion of
Camden station. The Pittsburg and Con-
nelisville railroad, extending from Cumher-
land Md, to Pittsburg, Pa, with several
branches. is one of the leased lines If the
Baltimore and Ohio. The receivers found
II necessary TO issue 5000. 600 receivers Ger
tlflcates, secured specially upon the Pitts
burg and Connelsville, for the purpose of
completing certain terminals at i5iltsburg
and to improve the roadway and tracklge
receivers certificates We're issued on July
/, 1897, Tor SOSo,Oje, to pay for 10000 tons OF
new rails, and for 81 :is3 $50, with which 10
acquire 5000 box cars, 100 hopper gCndola
cars and forty locomotives. In January
iSs'S, the receivers We're given authority to
cars and 1900 coal cars.
Under date of June %, 1885, said Mr.
Cowen, the various parties in interest
agreed upon a plan for the reorganization
OF the Baltimore and Ohio Railroad Com
pany, and since that date the receivers
have acquired under car trust leases made
by the railroad company, to which the re-
CeiVerS Were parties only to the extent of
agreeing to comply during the receivership.
All OF these arrangements Were made
under authority of the court, and, of course.
without any opposition, but with the APP
proVal oil all parties in interest. The
amount of the equipment so acquired was
5000 box cars, 300 coal cars, 5000 steel
coal cars and 50 locomotives
There We're sundry other orders of court
authorizing the acquisition of small lots of
passenger, freight and marine equipment
which l have not thought it necessary 10
go into the details of.
Earnings of the Road
During the receivership of three years
and four months the railroad earned
$92 500 545.S9, including So, 121 So7. ga, misce-
laneous income, and there was spent for
operating expenses. including large extra
ordinary OUTLAWS for maintenance of road
and equipment, SOS 162 5S3. 80, leaving a net
balance of s24, 1913 $3.50
In addition to the extraordinary sums
spent for maintenance and charged to OPP
Grating expenses, there We're improvements
and additions made to the road costing
S4,01S,652S5. These improvements We're
paid for as follows:
From the terminal mortgage fund which
was a sum in bank, the proceeds of sale of
terminal mortgage bonds, 81 ,0S1. 400. 81; from
receivers certificates, S4S3, 565.05; from
earning of receivers and assets in their
hands, 81, Ass, CTS 43.
The receivers acquired for the company
the following equipment: 221 engines, b
passenger cars 30,103 freight and service
re ha 1nf1 ting az Il
marine equipment costing StiS5, 504.0S.
1T will thus be seen, first. that the re-
ceivers and companys obligations, whether
in the form of receivers certificates OF ear
trust warrants, whose payment was secured
by the receivers agreements, amount to
S25 936,345.
Second. that equipment costing about
100000 was secured for the estate while
the receivers obligations in addition to the
S3,400,O0o equipment company bonds, were
for only $995,370, and for the payment dur
ing the receivershiD of the usual mileage
rental, which is paid for the use of equip
ment, when hired from other lines.
Third, that the improvements made in
the line, including the additional equip
ment, which were paid for out of earn
ings or by the issue of obligations, L have
discovered, would today cost more than
S6000,0e0 in excess of what the receivers
paid
Result of the Administrations.
and now what have been the results
of this administration of great trust
by the United States circuit court for the
district of Maryland?
I'D Every bondholder of the Baltimore
Railroad Company has received new Sc
curities, which substantially pay. his full
debt In other words, the bondholders
have been paid in full.
''(2) The floating debt creditors have re-
ceived every cent of their indebtedness.
''(3) The first preferred stockholders have
received in cash 10 per cent of the par
value of their stock, the court overruling
their claim Of preference over the bond
holders and creditors. The second prefer
red stockholders have received securities
which, after payment of this assessment
net about $40 per share, at the present
market, and at times over $50 net could
have been realized.
80 The common stockholders, instead