The Washington herald., 1909-02-21
B. & 0. MAY TAKE
C.. 4. RAILROAD
Several Plans Discussed by
Directors in Baltimore.
IT INVOLVES NO FINANCING
Relation Between Systems such that
Trunk Line Could Absorb Middle
West Road and Operate 20 Better
Advantage Than Any Other-HoS
Merger Gould Be Effected.

Baltimore. Feb. 2o.-There is little doubt
that the Baltimore and Ohio Railroad
viii play an important part in the re-
organization OF the Cincinnati, Hamilton
and Dayton Railroad. and eventually viii
absorb that system.
Directors OF the Baltimore and Ohio
have discussed several plans looking TO
the operation Of the Cincinnati. HsInil-
ton and Dayton by the former. but
reached no definite conclusion. The plan
which seems most likely 10 be adopted
is the creation Of voting trust TO hold
the common stock Of the Cincinnati.
Hamilton and Dayton, the trustees OF
the voting trust 10 consist Of a represen-
tative OF the Morgan interests. another
Of the Baltimore and Ohio, and these
two 10 appoint a third.
Can Best Develop Lines.
The lines Of the Baltimore and Ohio
and Of the Cincinnati. Hamilton and
Dayton in the Middle West are so sit
uated that the Baltimore and Ohio is
in a better position than any other sys-
TEN to develop the Cincinnati. Hamilton
and Dayton properly. Under the fore
going plan the Baltimore and Ohio could
manage and operate the Cincinnati. Ham
ilton and Dayton. and II. as in all proba-
bility would be the case. the Baltimore
and Ohio develops the Cincinnati. Ham
jIton and Dayton and expands its earn
ing power. It could exercise Al option Sc
cured az the time of the establishment
# the voting trust TO purchase the COM
mon stock Of the Cincinnati. Hamilton
and Dayton
The plan - unique. Il would involve
the necessity Of no financing. Il would
not js0pardize the right Of the security
holders Of the Cincinnati, Hamilton and
Dayton. but. on the contrary. by the op-
Grafton Of the property during the four or
I've years which the voting trust would
extend, should give the security holders
of the Cincinnati, Hamilton and DAYTON
everything 70 gain and nothing 10 lose
Would Involve Reorganization.
The plan would. Of course. involve
kind Of Reorganization Of the Cincinnati
Hamilton and Dayton. which would be
simple in character
The position Of the Cincinnati. Hamil-
ton and Dayton IS roughly this: 50. .0o0O00
underlying bonds; SlI,s00o9o per cent
notes. maturing IN 1913; s15.c00.O00 ~ per
cent collateral notes, $780, 600 (apprOxi-
rnately) receivers certificates. various
claims, &C.
The principal bone OF contention has
been between the reOrganizers Of the
Cincinnati, Hamilton and Dayton and the
holders Of the ooO Az per cent notes
in default
These notehOlders have nearly all Of
the SS.000ol9 preferred stock OF the COM
pany. together with ~ per cent consoH-
dated bonds, deposited as collateral HE
Cincinnati. Hamilton and Dayton cannot
possibly work out its salvation alone.
The interest OF these noteholders Is the
last claim on the income OF the company.
and Il is probable that noteholders VIII
exchange their notes for income bonds Of
the Cincinnati, Hamilton and Dayton.
WOuId Lead to Mortgage Trust.
Beyond this, the reorganization plan
would involve the creation OF a mort
gage Of perhaps S5aoo0.oo3 to S75.0c0,O0O to
provide for the funding Of all the COM
pany's underlying obligations as they
mature and for the new capital for the
Cincinnati. Hamilton and Dayton. FOR AL
Improvement and betterment, year BY
year as requirements demand
To begin with, the sale Of s.. ,000 Of
these bonds would be required 10 pro-
vide for immediate improvements. which
would call for s4o0o,oo0 or $5.o90-000 Of
cash. and leave a balance OF 100000 or
50 in the comp2ny's treasury
The Cincinnati. Hamilton and Dayton
holds in It's treasury 81. .oo00oo Of common
stock Of the Pere Marquette. Il per cent
Of the total. which practically constitutes
control This company is now solvent.
and wil do better with the revival OF
business and an alliance with the Balti-
more and Ohio.
In addition 10 this. the Cincinnati. Ham
ilton and Dayton owns q One-half interest
in the stock OF the Southwestern Con-
struction Company. the other half being
owned by the Southern Railway and its
affiliations.