Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1908-01-09
President of Road and Charles H
Smith Take Charge.
COMPANY DEEPLY IN DEBT
Short Time Notes Go to Protest and
Others Are Maturing.
STRIKE GIVEN AS ONE CAUSE
Losses Due TO BniIermaker-' WaIkout
and Decrease In Earnings ReauIt
In Dehcit-EnEIish stock
holders Meet.

ST PAUL MINI. Jan S.-JudEe Walter
Il. sanborn of the United States circuit
court this afternoon appointed A. r. stick
ney and Charles r. F. smith. both resi-
dents Of s.. Paul receivers FOR the CHI
cago Great Western railroad. A B stick
ney is now the president Of the road. The
firm Of Kellogg a Severance Of st Paul
was appointed attorneys for the receivers.
The appointment or receivers followed
inability Of the company 90 meet obliga-
tions falling due In laW ana the failure
70 secure an extension Of the obligations
Loss as a result Of the boilermakers'
strike OF last fall is given as a partial
cause for the financial straits Of the road
u was also pointed out IN the proceedings
this afternoon that during the last ten
years the road has spent slsOn0o in re-
construction
The petition for a rpceivership was filed
on behalf Of the stockholders and the
finance committee by John A. HumberE or
Minnesota. George p Meyer OF New York
and Ward Cummings and Alex wallace 81
Great Britain. As soon as the petition for
the cOmpiainants had been filed an answer
was filed on behalf Of the board OF direc-
tors who met this afternoon and voted 70
become party 70 the receivership proceed
ings.
Company Deeply In Debt.
In asking for the appointment OF receiv-
ers. Mr.. Kellogg said.
The capital OF the Chicago Great West
b ern consists OF four classes OF stocks. but
two OF which need be- considered in the re
ceivership proceedings. These are the pre-
ferred a and the debenture stock. each
OF which represented 81 per cent OF the
original first mortgage bonds.
The preference OF these two classes Of
stock are secured by a trust deed to the
Manhattan Trust company Of New York.
There will be default in the payment %
these obligations January Is
Further outlining the condition OF the
road, Mr.. Kellogg said that the Great
Western owes Io.6s3. =. nov due or
falling due within the next four years. Of
which notes "a the amount Of S545.e0a have
gone % protest
The sum exceo,IiRg Xl0n08Oea" contin-
ued Mr Keilogg- 'is part or the Sl9Wo6o'
spent by the Great Western In the last
ten years and for the most pdrt in the
last five years I'm rebuilding the road. New
steel has been laid double tracks have
been built. grades have been reduced and
new bridges and termiuu 's have been con-
structed- There was due last month notes
to the amount OF c5oooo sterling and will
be due during the rest Of January notes
szgregating ES3.og sterling, with total
amount or obligations due during 1913 OF
s33s2.J45. s5.'
M kellogg further said that the Great
Western. which is an Illinois corporation,
owns in fee without mortgage, lines of
railroad .n Illinois. Iowa, Minnesota, kan
sas and Missouri. II also owns terminal
lease Of line from It. Paul to AinnS-
apoIis
Subsidiary Lines Owned.
In addition the Great Western owns al
rhe stock Of and operates the Mason city
q Fort Dodge railroad. a line about Oo
miles long. This line is mortgaged for Sl2,-
1u.v11 - per cent Of its cost The Great
Western also has q lease Of this line by
the terms OF which the Great Western is
90 guarantee the interest on the bonds
The Chicago Great Western places I'm a
trust fund ~ per cent OF the joint earnings
bt the Great Western and the Mason City
& Fort Dodge roads and out OF this trust
fund the Great Western pays the operating
. expenses of the Mason city road. the bal
8uce of the trust fund going to guarantee
the future interest Of the yl1ulIJ8 bonds.
The Great Western, however has the use
OF this accgmulat.ug interest fund and
there is now in tile trust fund 81 x 6z3. -.
' rhe ownership OF the Mason city road
Mr. Kellogg pointed ont, is thus 20 the
advantage Of the Great Western. The
Great Western also owns stock under sim
liar condition OF the Wisconsin. Mime
sofa a. Pacific. which is bonded to the ex-
tent OF SSH gph Fifty per cent uf the
joint earnings Of this road g1 into the
. trust fInd iu which there rs nov available
$40 - o. The Great Western also owns
tne stock n the DeKaIb & Great Western.
capitalized at $1,000
To Prevent Attachments.
lI-. Kellogg said that under the laws OF
r-e states in which the Great Western 0p-
crates creditors might secure an attach
ment on It's property. thus wrecking the
road and preventing De- from fulfilling Is
obligations 20 the public.
. Primarily ou this ground the possibility
. rnar it might be- prevented from perform
.nR its functions as a common carrier.
Judge SanbUrn issued the order for the
appointment OF the receivers. He also
gave as an additional ground the fact that
a Judgment 1f $1,000 had already been
secured against the road
stiekney in London.
LONDON. Jan. s--The expected meeting
of the noteholders Of the Chicago Great
Western with A. g. suckney, president OF
the company. was held this afternoon. II
was decided ~ appoint "A receiver Tor the
. company. 20 maintain the statu quo during
the time necessary 10 prepare a first mort
gage bond covering all the Indebtedness
of the road and 10 obtain a vote Of the
stockholders on this measure
There were many notehOIders az tie
. meeting.
| Application tor the creation of tenn
porary receivership viii be made In the cir
ruit court In the United States without de-
lay
statement OF security H0Iders.
Subsequent 70 the meeting the follow. .ng
notification was issued By the London