Rock Island Argus., 1908-11-05
RECEIVERS FOR
PHONE COMPANY
Action is Started in Circuit Court by
American Trust and Savings
Bank, Chicago.
BASED ON TRUST DEED
Complaint Alleges Default on Interest
and Deposits - n. n. Bratt and
L. j. Wolfe Named.

Application was made in the circuit
court today before Judge w. H. Gest
for a receiyership for the Union Elec-
trio Telephone & Telegraph company,
and was granted. Judge Gest named
II. H. Bratt, present general manager
of the telephone company, and Leroy
j. Wolfe of Davenport as joint re-
ceivers. Their bond was lixed in the
sum of $4,000, and was furnished this
Afternoon.
The bill was filed by the American
Trust & Savings bank of Chicago,
which holds trust deed to cover all
tri-city property of the telephone COM
pany. This trust deed was given as
being $50 of these bonds, $50 of par
value of $1,000, and 100 of a par value
|of $500 The bonds were issued and
the trust deed given Aug. 1, 1902, soon
after the organization of the telephone
company. The bonds were to mature
in August, 1922.
Default ON Interest.
According to the bill, the telephone
company has defaulted in the payment
|of interest and other money which was
to be paid over under the terms of
the trust deed given it as underwater
for the bonds. The bill sets up that
the telephone company was to pay the
interest, keep up insurance. and pre-
serve its franchise rights. 1t was also
to eXpend 5 per cent of its gross earn
imgs each year in improvements, and
was to deposit 10 per cent of its gross
earnings TO be invested as sinking
| fund to meet the bonds when they be-
came due.
The bill alleges that the company
| has failed in all of these obligations,
and that as a result the deed should
be foreclosed. The trust deed provides
for this action under these circum-
! stances.
| To Operate or Sell.
The bill asks for the appointment of
a receiver to take charge of the prop
erty of the company. and TO either op-
crate or sell the plant under foreclos-
| urc proceedings The receiver is to
maintain possession of the property
pending the termination of the fore
closure suit.
The complainants were represented
in the court by Charles L. Bailey, Jr.,
and Defrees, Buckingham, Ritter &
Campbell. all Chicago attorneys.
The telephone company was net rep
resented in court today. but will prob
ably enter an appearance later when
the case develops further.
Due to Inadequate Rates.
That the company would eventually be
forced into receivership has been long
claimed by the operating officials of
the telephone company. 1t was to
prevent this that the company applied
for new franchises in each of the tri-
cities. it being shown that the exist.
I ing rates of the company are not suft
cient to meet the cost of operation.
Davenport and Rock Island have given
the company the new franchise ii
sought, but the delay in Moline has
been so great that the company has
been unable to fight off the action for
q receivership longer.
For the present the plant will be
loperated under the receivers direc
ton What action will be taken later
remains to be seen. The management
Iof the company has heretofore stated
that if the plant could be reduced tC
junk the proceeds would nearly equal
the original investment 1t is likely
however that no action looking to
ward the sale of the property will be
taken soon.
Capital is $i,5O,0O0.
The Union Electric company is capi
talized at $550,000 It's officers are
Harrisburg, Pa, men. the presiden
being George b. Sucker and the sec
retary and treasurer J. w. Morrison