New-York tribune., 1909-05-30
B. & O. TO GET CONTROL
C.. III. & d. -READJUSTAIENT.
Agreement ~Made sgith Morgan and
Committee of N0teholderS.

Following several months of negotiation between
the Baltimore & Ohio Railroad Company, ]. P Nor
gan & Co and the committee representing the S15,-
100000 AZ per cent collateral notes Of the Cincn-
natl. Hamilton & Dayton Railway Company formal
announcement was made yesterday of the conclu-
sion of an agreement under which the Baltimore &
Ohio is to acquire the controlling interest In the
stock of the Cincinnati, Hamilton & Dayton. The
plan of readjustment OF the finances Of the latter
property, which has for years been in a receiver
ship, also made public
Under the agreement between the Baltimore &
Ohio and J. P Morgan & Co, in whose hands is the
present stock control, the ownership of the Gin
cinnat Hamilton & Dayton majority stock is to
be acquired by the Baltimore & Ohio at the end of
seven years from July l, 1909, price then TO
fixed by arbtrators; the control of this stock be
vested during the seven-year period in three vot-
ing trustees of whom is to be the president of
the Baltimore & Ohio.
The plan of readjustment provides for the pay
ment or adjustment of the receivers certificates.
demand loans and other obligations of the receiver
the preferred claims and past due interest upon
the underlying bonds. the purchase money notes of
1913 and The 1904 refunding mortgage bonds. and
Tor the payment, adjustment extinguishment of
the floating debt the raising of funds to meet the
cost OF necessary additions and improvements by
the use of new securities their proceeds and pro-
visions designed to increase the companys earnings.
The plan also contemplates the cancellation of
SI151425 par value Of preferred stock, which
purchased by the company about 1904 and is now
part of the collateral for the s15 AZ per
notes; q readjustment of the company's Indebted
ness either with without judicial sale; the
early raising Of the receivership and the ultimate
termination or discontnusnce of all pending judicial
proceedings
TWO MORTGAGES TO BE CREATED.
The new plan provides for the creation of two
mortgages, both dated July l, 1909 first and
refunding mortgage of S75 100000 and a general
mortgage of $50, 100000. The bonds to be issued
undo
Per cent interest and 10 mature in fifty years OF
these bonds 600 TO be issued at present,
as follows: For payment or adjustment of the
company's Indebtedness both due and accrued,
sI,5o0,000 this amount including the payment made
by the noteholders' committee for coupons of the
refunding bonds purchase money notes due July
/, 1919; for Improvements now needed, $1,000 600;
for necessary working capital. 81 100000; and for
collateral for the $11,557 600 per cent notes of
1913 which the Baltimore & Ohio is TO guarantee
s13,o00,00O- Upon the guaranty of these notes the
present refunding mortgage bonds OF 1904 10
be cancelled.
The bonds to be issued for Improvements and for
working capital and S., 500 900 Of the bonds TO be
issued for liQuidating the company's Indebtedness
are 10 be guaranteed by the Baltimore & Ohio. or
the total $40, ,OO0 O00 there be reserved for
future use $23,714.0O0 for additions improvements
ard betterments and S23.7s6000 for refunding I'M
derlying bonds.
The general mortgage Of $50 600. .Oo0 will secure
total issue Of equal amount of bonds maturing
July l, 1899, and viii cover after the lien of the
first and refunding mortgage all the property
time subject 10 the lien Of that mortgage and all
other property acquired by use Of the bonds OF
either class. The general mortgage bonds 10
draw interest OF ! y per cent dependent upon in
come until july l. 1911; per cent fixed and =
per cent dependent upon income from that date 10
June so 1914; per cent fixed and = per cent de
pendent upon income until July l. 1915 and the fun
~ per cent absolutely each year thereafter.
The holders Of the N5.ooooo notes due on Sep
tembeT J. 1903, TO receive FOR each $i.o,o note
and its coupons SEQ I'm cash and new general
mortgage bond for 81 co.
BALTIMORE & OHIO TO PURCHASE BONDS.
The Baltimore & Ohio will in July. ls6-or. In
case II shall acquire the controlling stock Of the
Dayton road prior to that time in the month OF
July following the month In which such acqusi-
tion shall be made-purchase a. s. and interest the
bonds originally to be issued under the general
mortgage or. at its option, give IN exchange for
them per cent coupon bonds maturing in
1899 secured b,- the same general mortgage and
guaranteed by the Baltimore & Ohio. In considera-
ton OF these undertakings OF the Baltimore
Ohio the original general mortgage bonds are 10
be subject 10 call on any july prior 10 July l,
1916, for exchange for the per cent bonds.
The original bonds are also 10 be subject 10 call
FOR payment at par and accrued interest and the
4 per cent guaranteed bonds al 103 any January
/ July l.
The Indebtedness payable includes Gl4.0o0 Of
receivers certificates demand notes and unpaid
vouchers interest past due on bonds, H046.oo; de-
mand notes for money borrowed In 1905. %tIb25io,
secured by $4,000 Of consolidated general mort
gage bonds; claims for materials and supplies sold
to the company prior to the receivership and now
involved In court proceedings, t10S2.000; demand
notes for money borrowed in 1905 unsecured SSg2
622; unpaid Judgments $4,000; amount duo the
Pere Marquette. S364,00O; advances I'm connection
witt, the Ashland & Ironton Bridge Company and
the Toledo Terminal Railroad Company, $4,000.
The foreclosure suit pending is upon the con-
solidated mortgage Of 1905. under which N7JO,0O
of bonds were issued of which $15OOoOOO held as
security for the $15O00OOo notes due September 1.
1903 and s21O00O are security for demand notes
for 81 SO given in 1905 for borrowed money.
The Baltimore & Ohio. which has lines running
east and west through the upper and lower parts
OF the State of Ohio. WILL in acquiring the Gin
cinnau Hamilton & Dayton, get a system con-
Meeting with it's lines at Cincinnati and at
various points between Toledo and Ironton. which
are ioined by a north and south line through the
state and will also obtain direct line into Indian
apols.
In july 1904, announcement made that a
syndicate had bought a controlling interest In the
Cincinnati Hamilton * Dayton, the Pere Mar
ouette Railroad and the Chicago. Cincinnati &
Louisville Railway, and planned 10 bring about a
merger Of the three properties. In September 1S5
H B. HoIlins s. Co, who several months previously
had bought the larger part of the syndicate's
holdings of the common stock of the Dayton road,
thus obtaining the control. sold TO J. p. Morgan az
Co the shares controlled by them. comprising
30 900 Of the 5000 shares held by the syndicate the
total amount OF stock outstanding being S0,000
shares The holdings sold to the Morgan firm
ried with them the control OF the Pere Marquette
and the Chicago. Cincinnati & Louisville.
In the sano month announcement made that
the Erie Railroad Company had purchased the
control of the Cincinnati, Hamilton Dayton from