The Washington herald., 1908-03-06

Baltimore. March because Of the
provision Of the Hepburn rate law. which
goes into effect on May l, and forbids
coal-carrying railroad to transport coal
mined by it. the Western Maryland Rail-
road Company. a Gould line and a heavy
coal-carrying road. has gone into the
hands Of its president as receiver.
In effect, the railroad puts it up to the
court 10 devise a means Of successfully
operating coal-carrying road under the
restrictions of the Hepburn law
The application was made by the Bowl
ing Green Trust Company. of New York.
trustee Of the S1OcooOOO general lien and
convertible mortgage.
Judge Morris. of the United States Dis
trict Court. tonight signed the order
making President B. F. Bush receiver.
Confessed inability on the part of the
railroad company to meet maturing obI-
cations is the formal basis for the ap-
plication.
Papers Are signed.
The papers were signed tonight in the
Office Of Cans q Haman who. with
Thompson. VanderpoeI and Freedman.
of New York, are solicitors for the Pc
titioners.
There is no contention that the railroad
is not in position to surmount any ordi-
nary difficulties if it We're not for. the
Hepburn law. Ia a statement n8adt. 30
the directors OF the road. President Bush
says that the company is not confronted
with any failures Of its revenues to cover
its ful xed charges. but it must at an
early date encounter the problem pre-
sented by the commodity clause of the
Federal rate law.
The net revenues for the road for the
last six months OF 1907 increased $3.50, To-
with resulting surplus over all fixed
charges, including the abnormally high
cost of temporary loan and renewals, but
the company has been unable permanently
TO finance Improvements, equipments. and
additions.
Prices of Bonds Shrink.
The company has outstanding loans ma
turing April 1 amounting 70 S3.O7s. 80. Sc
cured by s5.O37OoO first mortgage bonds.
The market price Of the bonds. originally
in excess Of the loans. has shrunk far be-
low the face Of the loans President Bush
told the directors that the company would
have to provide additional collateral to
secure their extension.
Its coal properties are a material part
Of the security for the company's mort
gagees. President Bush says, and the reve-
nues from its coal business cannot be
sacrificed or diminished without seriously
affecting the income OF the company.
There has been no charge of improper
methods employed by the company. de-
spite invitation for complaints extended
by the Federal commission.
WOuId Be Sacrificed.
The Hepburn law. says President Bush,
cannot be generally observed in the ex-
treme construction of which it is sus-
cepuble without wholesale marketing of
coal lands at appalling loss or restriction
Of production, entailing vast loss of reve-
nue..
In this extreme construction of the law.
any other than the course adopted by
the read would be adjudged an evasion,
bringing about extreme penalties for in
fractions Of the law
Under the proceedings taken, President
Bush SAYS, it is safe to assume that the
receiver will ask the court for instruc-
tions as to the course TO be. taken 10
protect the coal business and revenues of
the company as affected by the Hepburn
law. Thereby n timely construction OF
tie law viii be obtained. President Bush
says. and the property rights of the COM
pany guarded.
Mr.. Bush is the coal expert of the
GOu.l system.