The Black Hills union. [volume] (Rapid City, Pennington County, Dakota [S.D.]) 1889-1904, 1903-05-01

confessed insolvency Of the Union
1iacuen company yesterday, involving
many millions, a financial authority
says:
On the surface an admission of de-
ieat n financial ruin, the r~eceivership
IS really a substantial and sweeping
victory for the traction interests, be-
cause 1t compels the settlement of the
disputed rights of the city and the
pan under the 99-year act in the
FEDERAL instead Of the state courts. Sew
eral old but not exceptionally strong
houses are likely to fall as a result of
the play in Chicago"
Chicago Is wondering whether the re-
ownership is part of a plan to take ad-
vantage of h city in the present fran
chlse fight. The traction companies
have always claimed rights under the
99-year franchises OF about forty years
ago, and there has been no final test
OF these rights. The receivership, by
taking this whole matter into federal
chance to establish their claims under
the 99-year act. The question asked is
whether the companies are trying to
turn some such coup as this.
Union fractions Troubles.
The organization is burdened with.
contracts with the underlying COM
panies that were not onerous had the
management of the constituent COM
panies been Of a conservative order,
which has characterized the
ment of the Chicago City Railway
company; but extraordinary eXtrav-
gances-not to use a harsher term
marred the properties to the time these
were taken over by the Union Traction.
Equipment n repairs were allowed to
go by the board, particularly in the
case of the West Chicago Street rail-
way, in order to make a favorable front
financially. LaSalle street was always
in line when the annual statements
were made up. The result was not
realized by the present controllers until
rectification became difficult.
A Philadelphia syndicate made up
OF Messrs. Elkins, Widener and Ryan,
together with several Chicago capital
lists, took over the holdings of c. Il.
Yerkes and then issued SIP, 900 900 pre-
ferred 5 per cent. cumulative shares
and $4,000, 900 Of common, all of which
would be practically invalidated in the
hands of the receiver. About a year
and a half ago 1t was thought that the
good offices Of ]. P. Morgan might res
cue the organization and, pursuant to
this idea, the firm bought a large block
of the. shares.
The Receivership.
Upon default of interest on five note
aggregating $1,154.1S3, the Chicago
Union Traction company, the North
Chicago Street Railroad and
the West Chicago Street Railroad com
pany passed into the hands Of receiy-
ers.
Suits for the collection of the interest
money were filed in the United States
circuit court Of appeals by the Guaran-
tee Trust company Of New York, and
the traction companies admitting the
default, Judge Grosscup at once enter
ed Judgment. Demands were then made
upon the t~reasurers Of the resDective
companies, and upon their return un-
satisfied three receivers were appointed
as follows:
In behalf Of the trust r.. r
Gown, Of New York; for the traction
company, James H. Eckels of Chicago.
and as special adviser of the court,
Marshal e. Sampsel!, clerk Of the
court.
The application for a receivership set
forth he facts that notes for s565, O52
against the North Chicago
for S270,44 against the West Chicago
company, and for 1918, $50 against the
Union Traction company were due. and
with interest were unpaid.
The insolvency of all three OF the
companies was alleged; that the rolling
stock of the corporations was heavily
m~ortgaged, and that stocks and other
assets of the company could not be
reached by a judgment creditor.
Attorney w. w. Gurely for the trac-
ton companies filed a plea in each case.
admitting the claims of the COMPLAIN
ant were roper, and offered no objec-
ton to the appointment of the receivers.