The Worcester spy. [volume] (Worcester, Mass.) 1898-1904, 1899-08-11
So Says Hon. Richard
Olney Of the B.
q A. Lease.
THAT 1000 YEAR GUARANTEE.
New York Central May
Lose It's Value In
Is Years.

mere Is the text of the circular thoE
the protective committee will soma ~
an the Boston & Albany stockhoIders
ana other interested parties TODAY The
op'Nion Is unusually interesting. oon,-
ins' as 1t does, from the former seo-
ie'sry OF state, Hon. Richard oInev.
10 the Stockholders Of the Boston ant
Albany Railroad:
The protective COMMITTEES of a.
ton and Albany stockholders during ~,
past -FOUR weeks have been n,a1,i,,o-
thorough and careful inves+tga IT, -
the railroad situation and the otber
questions involved in the lease ~ A..
NV tSem ork Central, and they are con-
sar,,o5 mat not only the rental re-
sI,fF 81 49,, uh S the proposed lease. is in
Io 11ticl sl IN amount, but also that tba
tease itself utterly falls to nrotenf p ello
'on ana Albany stockholders.
upon the Questions of the neoa,so.
1eoeAilCiuers vote, and the form of tba
otSt, t1e committee have sought and
opIalned the best legal advice in s Az
Ipoil1Wlng opinion given by the Hon
Richard Olney: Aioii-
Messrs. Charles cor.
,nit,ol ana others. Protective Com
Inlttee of Boston and Albany stenil
nolders: Gentlemen:-
Inc answer to your first ;ro,,,,,.
uoes not seem to me to adroi+ 20 -.
1Ious doubt. According to the 1aw -
New YORK as now existing the So
called contract of lease between ~.
boston and Albany and the New vorl-
central and Hudson river railroad
and p tts1 IS wholly imperative unless
~ ulitll approved by two-thirds In
INTEREST OF the stockholders of aoet-
corporation represented and v,otipe a
ouly notified meetings of the two rorr
poratlons. Further, the directors vote
Upon the lease by their own ter,,os,
make the operation of the CONTRACT 10.
pendent upon the same approvai Nv
sIocKnoIders, as is prescribed bv ths.
New York statutes
Renee, that an approval OF the lease
~ q majority in interest of the stock-
holders of the two corporations mo-,
nave the effect of vitaHzing the lease
thefe must be not only new New Yorl,
Ieslskatlon, but new and appropriata az
tlon by the directors Of the respecti,T,
companies. 90 pSStlNe
your second inquiry, as 1 understand
~, Is Whether-without regard to fba
amount of the lessons annual rental.
, the position of the lessor under he
a
seous one, and whether there are not
omdtted from the lease various nrovis.
IONS ordinarily and properly deemed es-
sehtlal 70 the due protection of tha In
tefests OF the lessor. 1t is clear fbi,,Ir
1hat TINS inquiry must be an. ,eJ IN
the affirmative. -
In the circular of the Boston and All
pany directors to stockholders conf
Gently recommending the pronosa7
lease occurs the following:
The New York Central and Hudso,,
River Railroad Company is among tbe
oest OF guarantors, and the sharehold-
ers VIII have security which Is ona
Oh the safest in the land, a. sec1l,,ty
which will be relieved Of all risk ~
loss from physical disasters and from
commercial depression, and thew are
assured their regular dividends as long
az the tease endures together with such
the Ioar millions Of dollars retained for
their benefit"
Nothing could better demonstrate the
pervading spirit and underlying prfnci-
pie of the entire lease than does this
extract. That the lessee's Continued
stability and prosperity Tor a thousand
years should be taken for granted Nv
the directors and owners of the New
York Central, can be understood That
by the directors of the Boston and All
oany Is more surprising, while, that It
should actually be made the basis OF
business bargain respecting property
on which the Boston and Albany d.
rectore are practically trustees, is quite
tnexplicable The vicissitudes of the
future and of tolerably near future.
can not be discounted in any such alb
solute fashion. 1t is not inconceivable.
afffn
that before the proposed lease has run
d quarter of century or even a much
shorter time, the New York Central
may have wholly lost it's character and
value as a railroad property. The
wealthy and conservative owners. who
now do so much for it's standing and
prestige, may have sold out-hostile
legislation, business depression and
panics, competitions, foreign wars. and
other causes impossible to anticpiate.
may have seriously impaired its earn
ing capacity-and its present stable
and prosperous condition NAV have
given place to insolvency, with all lts
consequences to creditors and stock
holders 1t can not be doubted. there
fore, that, If the lease puts the lessor
as a possible creditor in an unusually
disadvantageous relation to the lessee's
assets, and II the lease fails to provide
those safeguards for the lessons in
terests. which are generally considered
essential in the like cases, the lease
ought not and can not be expected to
commend itself to the Boston and Al
bany stockholders. Yet that such is the
character Of the lease, seems to be
clear.
1. For example, why should all the
lessons claims under this lease be xnada
subject to the prior charge ana due
payment of the bonds described in Ar
ticle 10th? Ordinarily, If a lessee de-
faults under lease. the lessor can not
only recover the leased premises, but
can also claim or prove against the les
sors estate pari passu with all other
unsecured creditors There is no ex-
planation-so far as / know-of this
against the lessor in the
proposed lease. Nor can the matter be
dismissed as of little consequence. II
the lease were broken and the lessor
reinstated after the lessee has been In
possession FOR any considerable length
of time, the just claims of the lessor on
account of arrears of rent, unpaid In
terest on bonds, deterioration of the
leased property and other breaches OF
contract, would be likely to amount to
q very large sum.