The Washington herald., 1909-02-07
HAY BLOCK READING
Baltimore Contract a Bar TO
Western Maryland Deal.
CAPITALISTS FEAR A TRICK
Under which City stock
Was Sold Thought 10 Be PrOtee-
tfOn Against Plans TO ReOrganize
wabash System-VaIue of Local
Road to Local Advancement.

Baltimore, Feb. 6.-The Gould stocks,
especially the shares Of the Western
Maryland Railroad, continue 10 excite
interest In financial circles both IN Balti-
more and New YORK by reason Of the per
Tsstent strength and rumors that control
Of the Western Maryland VIII pass to
the Reading when the former system is
reorgsn!zed.
The report concerning the Reading
with designs upon the Western Maryland
Railroad has again raised the question
OF the legality OF such transfer. N view
Of the wording Of the ordinance under
which the city Of Baltimore sold its hold
ings OF Western Maryland 70 the Fuller
syndicate. which represented the GOulds.
This ordinance which was designed TO
prevent the Western Maryland from fall
ing into the hands Of the Baltimore and
Ohio or the Pennsylvania OF companies
controlled By those corporations and
thus shutting out another competing line.
expressly provided that no title shall
rest in the purchaser or purchasers OF the
stock OF the Western Maryland Railroad
Company Il sold 10 a railroad company
now controlling, owning. or operating
any line or system OF lines centerlng. ter
minaJing or operating in the cities OF
Baltimore OF Philadelphia. OF 10 any per
sons OF corporation representing. directly
or Indirectly. such railroad company"
Syndicate Accepts Condition.
This IS followed by power al any time
10 institute legal proceedings to prevent
the violation 0f this provision. The pur-
chasing syndicate in writing expressly
accepted these conditions. The city Of
Baltimore has taken 10 action 10 abro-
gate this contract OF 1872 There IS an
other agreement. which provides that the
Western Maryland shall be the Atlantic
seaboar3 terminus Of the Gould system.
but there IS doubt whether this agree
ment could be enforced.
There are still many weIl-informed per
sons who believe that the original plans
Of the GoUids for building q connection
between the Western Maryland and the
Wheeling and Lake Erie viii be carried
out, though II u IS. it IS not probable
that the Goulds viii be the dominant fac
tors in the management At the moment
the reported deal with the Reading is
considered the most likely. but Il is recog-
nized that the contract with the city Of
Baltimore may be a barrier 10 the carry
ing out q this plan unless the rnunlci-
palitv could he induced % sbrogate the
contract
Western Maryland Valuable.
Receiver Bush has demonstrated con-
clUsfvely that under competent and ag-
gressive management the Western Mary
land is a valuable property. The roadbed
has been almost entirely rebuilt during
the past two years. The main line has
been relaid with heavy steel rails prao-
ticaTly al the way from Baltimore to
Elkins, ". Va. and probably for the
first time in its history the system has
an adequate supply Of rolling stock and
motive power. The earning power OF the
system IS steadily increasing. net rev
enue in the last few months having been
more than sufficient to meet fixed charges
and interest on the floating debt
The reorganization committee has
drafted q tentative plan for the reha-I
bilation OF the company, and now
sii@tVSSty awaits ttit supreme court Go-
cisi0n on the eonstitutionality Of the com
modify clause Of the Hepburn act, as up
on this decision viii depend the terms
which win be offered 10 stockholders to
participate IN the reorganization OF the
property.
The company has outstanding s10,0o1. .o0o
OF 4 per cent general lien and convertible
bonds secured by mortgage upon more
that 10000 acres Of coal lands. the prod
ucts OF which the Western Maryland
Is prohibited from hauling under the op-
Grafton OF this law, which provides that a
railroad shall not transport products Of
an enterprise which It owns or controls.