New-York tribune., 1908-02-27
GOULD LINE RECEIVER
ACTION is UNEXPECTED.
Mercantile Trust Against Interna-
tiOnaI and Great Northern.
IBv Telegraph TO The Tribune. ]


Fort Worth, Tex, Feb. 26.-On application
made in behalf of the Mercantile Trust Com
pany, of New York, before Judge Edward r.
Meek. of the federal court for the northern dis
trict of Texas, this afternoon. alleging default
of the interest on a bond issue of 1892. T. j.
Freeman. of New Orleans. named receiver
for the International Great Northern Rail-
road Surety will be executed and the receiver
will probably qualify to take over the property
tomorrow.
Mt Freeman is general solicitor for the Texas
g. Pacific Railroad and high in the councils Of
the Gould lines He left Fort Worth for Dallas
this afternoon.
The International & Great Northern is a Gould
trunk line. one of the most important in Texas
and the largest line entering Mexico. The road
apparently has been in good financial condition
and has been doing a large business. Recently
George Gould removed many officials. replacing
them with men from Eastern lines.
The receivership caused general surprise in
railroad circles, and it is asserted by some that
it is a influence legislation
George ]. Gould. the president of the road. said
night:
.-The rsceivership of the International & Great
Northern Railroad should cause surprise. and
is due TO conditions and reasons almost entireV
local While there has been an almost unprece-
falling off in revenues. due to the business
depression prevailing in Texas and elsewhere and
affecting every branch of business this alone would
not have caused the action taken. AT time
when the revenues leanest and business is at
the lowest ebb the company is called upon by the
state commission to make additions and improve
ments TO fixed and rolling plant and re-
visions of its property involving the expenditure
of several millions of dollars and tos proceed with
these expenditures upon a schedule prescribed by
the commission without regard 10 current revenues
or the ability of the company 10 secure funds 10
meet the expenditures.
These orders have coI-e top of decrease in
the gross earnings for the last four months of
1899 go a decrease at the rate of nearly $""-
600 a year. It has been impossible to reduce ex-
penditures anywhere near propOrtionately Even
were the earnings as large formerly they would
not provide these expensive and immediate out
lays. And the laws of Texas do not admit, even
if the financial market did, the issue and sale OF
securities to do the work required OF the company
The orders of the commission have the effect OF
unless aside by the courts and the require
nents now placed on the company for these great
and immediate outays without the revenues the
credit the securities the markets 10 provide the
money mean such insolvency as would under the
laws of Texas empower the state authorities TO
apply for a recaivershp. In view of the foregoing
it if for the conservation of all interests
II was necessary to seek protection Of the court
where all interests be properly represented and
protected and which justly determine all ques-
tons issue.
What / have said is intended criti-
cisn1 of the Texas authorities of their action
merely state the situation and have every conf
dence that the best results will be accomplished
and that the interests of the public and securities
holders will fairly adjusted and properly and
permanently protected by the course that has been
pursued"
The Intarna tionaI & Great Northern Railroad has
a total mileage of 1.159. Its lines extend south
westerly from Longview. Tex, Houston and
Galveston and also to Laredo, Tex. on the Mexi-
can National Railroad and thence from Spring
northerly Fort Worth
The road recognized in 1892 without fore
closure Its authorized stock issue is S25-0eoOoO,
outstanding of which is $9,755,ooO Its bonds bear
interest at per cent, but IN of default the
rate reverts back to s per cent. formerly On
June l. 1897. trust notes and bonds were
S627 .65s.
The last annual report of the International &
Great Northern showed that its gross earnings from
July TO November 81. 1907. S3ie1.1$ as
against 81 iS35,OO4 1896 The roads earnings
for the wear f9O6-'07 sSs26.95T. earnings.
81 95OOeS: income from other $3.50 charges
and so forth 81. 7s0.S11; balance. sl73.i2 In the
year 1865 06 gross earnings So 1873; net
oO1: charges and forth S1S1.6e6; deficit. s92es6
The charges include interest debt of 81 2s.