The evening times. [volume] (Washington, D.C.) 1895-1902, 1901-06-04
TO PROTECT BONDHOLDBRS
The First Step Toward Reorganiz
ing the Traction Company.

The appointment of n Receiver Il
Precautionary SIeaSure TO Prevent
the blocking of Plans TO Pat the
Corporation on a Paying BASIS.
The Washington Traction and Electric
Company Committee of Reorganization
has taken the first important step deCid-
ed on by having Il receiver appointed for
the company. Judge Nathan Go&, Of the
United States Court for the Eastern dis
trict of Virginia. yesterday appointed Al
Ian !. McDermott receiver for the com
pany. on the application of the United
States Mortgage and Trust Company, Of
New York. one OF the chief owners of
the bonds Of the company and one of the
interests chiefly concerned in the reor-
ganization- AIr- AIcDermott has been the
President Of the Washington Traction
Company up to this time
The appointment Of a receiver is not un-
derstood to mean that the concern is to
20 ont of existence. The measure IS q
temporary one, d precautionary step to
prevent the blocking of the plans Of the
friends of the company by any interest
inimical 10 It
The committee OF five appointed last Fri
day represents the five largest holders Of
the DJlltS % liz A'fll4lleAaASs va '''--N-- 49,
interest payment was defauIted on Sat
urday- This committee has been working
on 4 thorough plan Of reorganization,
which. it is believed, Will give the company
a new lease of life on a paying basis 1t
is understood that this plan Contem-
plates the carrying out Of the law
passed by Congress more than a year ago
fer the consolidation Of all the cGnsttU-
ent concerns of the company into one
Whether this plan viii be pushed at once
or allowed to wait for a time until the
Washington Traction Company is on a
safer basis is not known TO the outside
world The appointment of a receiver,
however, leads many 10 believe that the
consolidation scheme Will be carried out
at once
One of the rUmors in the Street today
was that the appointment of the receiver
was decided on hurriedly only yesterday,
and that the reason of this action was the
discovery that an interest inimicaI to the
bondhoIders has become possessor Of the
controlling interest Of the stock Of the
company.
Several weeks ago there were iTHpoT-
tant purchases Of this stock and the price
of the issue was advanced by this demand
from around nothing 70 around 3 and s.
a share. 1t was whispered at that time and
later that the control of the stock, and IT
this way OF the company, had passed
into new hands This was hardly thought
to be possible as the stock was supposed
10 be held by She bondholders aImcst eX-
clusiveIy- Now however, hints Of fine
coup on tn part Of the supposed new in
terest are heard The bondhoIders Sre al
legged to have been outEeneraIed into sell
ing out their stock while they held the
bonds.
If there Is any truth in this story 1t
viii be seen that the new interest would
have & powerful position IN the affairs OF
the company and that in the ordinary
course of events it would be able to block
any reorganization plan that did not meet
with its views One Of the features Of the
bondholders' plan was supposed to be the
assessment Of the stock Of the company
This. quite reasonably might be supposed
TO be contrary TO the views Of the new
controlling interest in the stock
The gossipers that discuss this phase
OF the situation state that the TeceiveTshiI
Is a counter-move on the part Of the bend
holders, even CleveTer than the Sc
curing Of the control OF the company By
the purchase Of its worthless stock It j.
suggested that in putting the company
into the hands Of a receiver the stool
Immediately becomes OF no value even IOl
control purposes The effect OF 2. receiver
ship IS TO give everything first to thf
bondholdsrs TO satisfy their claims fol
their full face value. II is considered Il
be conClusiveIy demonstrated that theT'
would be nothing left over after paying
the bonds off al par for the stockholders
Business men familiar with the affair
Of the company are Of the opinion that j
ra- he made 2 having concern in the YER
near future If the proper methods are de
vised- It IS suggested that in the reoTgan3
cation a thorough oveThauIiag Of the En-
tire mana cement of the concern VIII b.
made in all probability The running o.
the different subsidiary lines scparatel,
instead Of as one has IN itself been ~
important item Of. extra expense Their
have been seven power stations instead o.
one. and il IS said that one central power
house Is entirely feasible. Many other Re
forms are pointed outasp possible The belle
is expressed by experienced street railway
men Of the District and Of other cite.
that the operating expenses could be Gu
down from $4,000 10 Sz5a.00 a year. and
the gross earnings largely increased a
the same time.
The Washington Traction bonds wcT'
strong and III demand on the local *
change today. Several thousand dollar.
were bought at SIS and that price was bio
at the close