New-York tribune., 1908-03-06
MEET INTEREST
IN RECEIVER'S HANDS.
The Western Maryland, Gould
Road, Short of Money.
TBy Telegraph to The Tribune.

Baltimore March 5-The Western Maryland
Railroad, the Gould tidewater line in the pro-
posed transcontinental system, admittedly un-
able to meet payment Of the coupons on its
bonds due on April l, tonight passed into the
hands of receiver.
Judge Morris, of the United States Circuit
Court, signed the order. upon the application of
York
B F. Bush president Of the railroad
pany was appointed receiver. The papers were
signed in the office of Cans & Haman. who,
with Thompson. Nanderpool q Freedman, OF
New York, are solicitors for the complainant
The Western Maryland has outstanding loans
maturing April /, 1908, 10 the amount of $3.-
77675O. secured by the pledge of s5,o37ooO Of
It's first mortgage bonds.
The company is unable to meet these loans or
to provide additional collateral to secure their
extension In this situation it was naturally
unable to borrow the money necessary to meet
the mortgage interest due on April /.
Mr. Bush succeeded Winslow S. Pierce as
president of the road about year ago. The
proceedings came as surprise, not the slightest
intination that they would be taken having
reached financial legal circles during the day.
The Western Maryland was purchased in l9O@
by what was known as the Fuller Syndicate,
acting for the Gould interests, the price paid
being SS,O00.OO0. At that time the road was
indebted to the city of Baltimore on account Of
mortgages and accrued interest to the extent OF
S12OOOOOO Then the line from Baltimore
TO Cherry Run, about sixty miles from Cumber-
land At Cherry Run it connected with the
Baltimore & Ohio. Since that time the Western
Maryland has been extended to Cumberland 20
connect with the West Virginia Central Rail-
road previously acquired by the Gould inter
thrs rich coal territory.
There has also been built line about six miles
long from the northwestern suburbs of this city
to Port Covington on the Patapsco River, thus
bringing the Western Maryland to tidewater.
An official statement, in part follows. was
given out in this city tonight by the board Of
directors of the Western Maryland Railroad
Company
The institution of proceedings under the general
lien and convertible mortgage of the Western
for appointment of receiver. We're S due to action
of the board OF directors Of the copany at t,o1
of President B. F. Bush to the board. The COM
muncation and action stim6qe are as 5G0Ws Mrch 1903
ITO the board of directors of the Western Mary
Il have asked for this session of the board in
order IN Iey before il a statement of the inpor-
tant nhsses Of the company's financial and bust
ness situation and to express my own views and
The gross revenues of the railway for the six
months ended December 81 lsTa % 1nfreased % ss4V
the company increased S3oo.l'b IL, or 5OzZ4 per
cent e over oSe @ ith resulting sirpius over ali
fxed charges, including the abnormally high cost
The company is not CONFRONTED ed, with any fall
even including those of the extraordinary char
acter last mentioned, and its business has main
snrance of continued development. 1t has. how
ever, maturing obligations arising out OF Its tenn
it must early date encounter the problem
presented by the commodity clause of the fed
The company has been unable to permanently
undertaken in the development of the property
and earnings. and since justified in all of their
results except as their wisdom be tested by
the abnormal conditions OF the present money
and security market.
"As ,ou are aware, this company has outstand-
ing loans maturing April l. 1908 in II The amount
first mortgage bends. The market price OF these
as TO promise considerable surplus applicable TO
the reimbursement of the treasury for capital oX
stantai Increase in the gross and net revenue Of
the company, shrunk TO level below the face or
TT has now become apparent that the company
Will be unable 10 niee' ] t%ai xteosnn In
this situation the company itself VIII, OF course
mortgage interest falling due on the first OF April
This immediate inability TO meet the April in
terest requirements will affect the first mortgage
an and in the view in which make the subjoined
recommendations not at az IIe TInsic vdoe @ OF
pany's loans must in any event. remain much
above the level Of their amounts, and with just
solution OF the questions under the commodity
clause their market value should be restored.
..Tbe company should aCQuesce in the appoint
mant of a receiver under any proceeding which
may be Instituted by the trustee to protect and
enforce its security as we'll as In such application
az ma be made 10 the court for authority 10 the
receiver 10 provide Tor ana pay tae Anrh interest
on the first mortgage.
President Bush gave a bond receiver in
800 600 the bond being signed by the Fidelity
and Depcsit Company.