The Washington times., 1901-10-12


a further step toward the rehabilitation
of the Washington Traction and Electric
Company system was taken yesterday in
the District Supreme Court in the appoint
ment of Allan C McDermott receiver for
the City and Suburban Railway on the
application of the syndicate interests. The
CITY and Suburban is one of the constit-
uent concerns OF the syndicate and has
been running behind in its business. The
syndicate recently obtained several judg-
ments against the company for sums
loaned TO it, and on these applied for the
receiver in Judgment creditors bill. Mr..
| McDermott is a syndicate man He was
originally President of the Washington
Traction and of the constituent concerns
as wei. Later he was appointed receiver
for the Washington Traction, but is still
holding his position as president of each
of the minor companies. His new ap-
pointmeut is q recognition by the court
of the right of the syndicate to have its
representative in charge Of the affairs of
the City and Suburban as against the
claims OF any conflicting interests.
The appointment of the receiver for the
! City and Suburban is understood TO mean
that this line viii be foreclosed and
. bought in by the syndicate. If this is
/ done the minority stockholders will re-
/ ceive nothing apparently, as there is not
| likely to be any other bidder than the
syndicate and as it is not customary in
such cases for the purchaser to pay any
more than is necessary.
The Washington Traction affairs are
coming rapidly to head. Today is the
! last day in which the bonds of the com
/ pauy may be deposited by holders with
the bondholders reorganization commit
| tee. Next Tuesday is the last day set by
! the Virginia court in which action can
/ be taken by any interest TO prevent the
! foreclosure of the Washington Traction
| by its receiver and the carrying out of the
| reorganization plan. 1t is thought to be
! ton plan, in its present shape, and the
| fate of the syndicate as the controlling in
/ terest in the Washington street railways
! viii be decided in the near future.
As far as can be learned the reOrgani-
| zation committee has made no changes
! in it's plan as outlined in The Times re-
/ Gently. This plan contemplates the fore
/ closure of the Washington Traction and
/ the purchase by the committee OF the Sc
curities of the constituent concerns held
/ by it The committee, under the plan, will
1 then form new company, merging all
| the minor concerns into it under the law
! passed by Congress a year or more ago.
/ New securities will be issued and the old
| Washington Traction and Electric securi-
| ties will go out of existence. 1t is under
! stood that the plan also contemplates the
purchase of the small minority stock
| holdings in the constituent companies, so
that the new company VIII then own the
railway system outright except for the
underlying bonds of the different constit-
uent companies.
authority. however. that there will be an
important opposition to this plan devel-
oped either before or at tie hearing OF the
case in the Virginia court at Norfolk next
week The stockholders of the Washing
ton Traction and Electric Company, who
own nearly 81. 100000 Of stock, as lien
on the company after the bonds, DO not
acquiesce in the plan proposed by the
bondholders. They state that the plan is
not an equitable one to them and not in
accordance with promises made 10 them
by the bondholders committee. Attempts
have been made by the stockholders 10
have some change made in the plan that
would give them larger interest In the
proposed new concern, but these attempts
have not met with success and ii is now
said that the stockholders viii appeal 10
the Virginia court TO prevent the lore
closure of the company in the manner
proposed. one important ana powerful
interest at least is allied with the stock
holders and the statement Is MADE that
they are hopeful Of securing some COR
cession from the court
The City and Suburban case came up
before Justice. Bradley in Equity Court
No. 2 yesterday, rule on the company
TO show cause why a receiver shoulu not
be appointed being returnable yesterday.
Attorney ]. ]. Darlington representing
the company, offered no objection 10 the
appointment, and. despite the protest OF
the minority stockholders, Justice Brad
ley rendered his decision. and made Mr.
McDermott receiver. There was some
question at first as to the. amount OF
the bond and the sum of $2o0UD was at
first suggested. The sum liked on fina!ly
was $4,000. The new receiver dld nos
qualify Yesterday, but IL was understood
that he will probably do SO this morn
ing, and Immediately take charge OF the
affairs of the company as an ofncer OF
the court.
The nominal applicants for the receiver
were the United States Mortgage and
Trust Company. which Is the trustee or
Company, and has been largely interest
ed in the affairs Of the syndicate from
the beginning, and the United states
Electric Light Company, the Anacosua |
and Potomac River Railway Company,
and the Columbia Railway Company. all !
constituent concerns of the Washing
ton Traction syndicate. These companies |
during the past year or more have loan |
ed TO the City and Suburban, to make up |
for its deficits in earnings, sums aggre- |
eating 1921. COO and have received from II |
were not paid and suits were brought on |
them several weeks ago, and judgment |
obtained by the companies; Proceedings
We're then instituted in equity on 1udg-
ment creditors bill. to declare the com |
pany insolvent and for the appointment |
of receiver.
the receiver yesterday came from a num-
Der of minority stockholders Of the COM
pany. who also had an application Tor |
receiver, and who believed that the ap- |
pointment should be made on their ap- |
plication. A bill was filed by them some |
weeks before the syndicate's bill was
filed, and II was alleged by them that |
the syndicate was attempting TO wreck |
the company by diverting business from |
It to other lines controlled by the syndi-
These interests were represented yes
terday in the proceedings by Messrs. /
Hamilton & Colbert and Leon Tobrincr. |
1t was asked by them that the appoint |
ment be deferred until next Tuesday in |
order that they might have time to pre-
sent their side of the case and argue for |
the appointment Of a receiver chosen by |
them instead OF by the syndicate. The |
question was argued by both sides. Mr.. |
McKenney for the syndicate stating that |
as the petition of the minority interest |
had been filed for some weeks. and as |
nothing had been done by them in the |
matter he saw no reason why there |
should be further delay Justice Bradley |
acquiesced in this view Of the matter. |
saving that as both parties allege that |
the company is insolvent and both desire |
a receiver, and as the claim Of 1udg- |
ment creditor is a prior one to that of |
the stockholders, there could not be any |
Injustice in making the appointment on |
the application of the syndicate. He |
stated that the minority interests Will be |
able TO take further action If they so de- |
sire when the receiver acts in the matter |
Nothing could be learned yesterday as |
TO the future plans of the minority IN
terests. The bill filed by them originally |
represented the stock OF only three stock |
holders. but since that time practically |
the entire minority stock, about 1000 |
shares. has been Joined 20 theirs in the I
EFFORT to obtain some recognition from |
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