New-York tribune., 1911-12-31
WABASH TO DEFAULT ON As.
Kuhn-Loeb Committee Opposes
That Headed by Wallace.
BOTH DEAL WITH EQUITABLE
Trust Co. Sends Letter to Bond
holders, Provoking Criticism
j. G.. Stubbs to Make Report.

1.hrouch teleerams received here yester-
day II became known that the interest on
the Wabash refunding As, due tomorrow
is not TO be paid promptly, as was indlcat-
ed in the statement given out by the huhn-
Loeb bondhoders' committee at the tme
the receiver for the road was appointed.
The Kuhn-LOeb committee Is now a'
tempting TO gather the bondholders INTO
their fold in opposition to the committee
headed by James y. Wallace. president OF
the Central Trust Company, or "hlch W.
A. Read and Albert II. Wiggin are meih-
bers The two committees are WorKlhg III
direct opposition to each other IN 'hel'
plans for the reorganization Of the Waoasn'
The Equitable Trust Company is the
trustee for the refunding mortgage IS "
protect the holders of which has oeeh the
announced object of the organization ol ''io
two committees Alvin w. hrech' Pieei
dent of the Equitable Trust COMPANY 10
the chairman of the Kuhn-Loep conihli'
tee and at the same time the Equi'aOie
Trust Company is the hnanciaI agent Va
the Wabash and the medium through "hicn
the interest on the bonds VIII oe P
when il is paid. This makes IL necessary
for the bondhOlders, no matter WIN "Hien
committee they wish to affiliate, TO send
the coupons OF their bonds TO the Equi'aoie
rrust company for payment TO certain
bondholders who have. as usual sent 'hei
coupons to the Equitable Trust COMPANY
for collection the trust company has sent
the following letter:
Referring to the coupons due January j.
1872 on first refundlng ana eNIensIolis ior m,,'-
gage bonds Of the Wabash Railroad COIh-
many which you have sent us Tor ColeC-
lion. you are doubtless aware that TeceiH TeaN
ers have been appointed OF an tne paii
roads and property OF the Wabash haii-
a committee for which the Equitable
Trust Company of New YORK is @ @actns sII SI
depositary has been appointed TO secure an
proper and desirable co-operauon Oh tno
part of bondhoders and has pubhshe9 ho
tee. copy of which is inclosed here"i't, 10 va
You will note that arrangements hdEe
been made TO advance TO deposllots VI
bonds the amount of the interest maturing
thereon on January l, 1872
on receipt, for deposit, OF the bonos IroliI
which the coupons sent to US by you Ior
collection were detached. We VIII remit ',le
amount of such interest and cerunca'es u
deposit for the deposited bonds 49,, 4.
In order that further communCauons "
bondholderS may be properly addressed.
Will you please supply us with the corFeC'
addresses OF the owners of the coupons foT-
warded by you?
HCriticism is especially strong on the fail
ure of this letter to mention the opposition
committee and give the bondholders a
chance TO make a choice between the two
committees both OF which offer TO loan
the January interest. II is a unique posi-
fion for the financial agent Of a corpora
tion TO take, II is argued by the opposition
committee, to try to lead the holders OF
bonds into affiliation with a particular COM
rrittee in the reorganization of the road.
Tactical Advantage at Stake.
II the Kuhn-Loeb committee. by the use
Of its position with relation 10 the Equitable
Trust Company, gains possession OF the
names Of all of the holders of the bonds, IL
Will II is pointed out have thus secured a
valuable tactical advantage over the wal
lace committee I'm the fight to secure rep
resentation Of the bondholders, which will
mean the ultimate control Of the road and
dictaton Of its financial policy and man
aEement.
j. T. Cotton. jr., counsel for the Wallace
committee. for which the Central Trust
Company is depostary said yesterday: Il
do not know of any statute which the
VI Equitable Trust Company has broken by
issuing this notice. which may induce bond
D., lders who do not know Of the other
committee to deposit with the Kuhn-Loeb
committee.
notions Of good taste and fair play, and
think no trustee should allow itself to
favor one faction Of It's oenefciares against
the other. {cwcver. the device Is so oo-
Yious th9t | % not believe II Will get many
depOsitors for the kuhn-Loeb committee"
J. G. Stubbs. who has just retired as vice
president and director of traffic Of the Har-
riman lines, has been retained by the bond
holders protective committee Of the Wa
bash Railroad. headed by Robert Goelet to
make an examination of the Wabash and
report upon the condition and requirements
Of the property.
The committee has also engaged well
known firm Of public accountants TO eX-
anime and report upon the financial posi-
tion and accounts Of the Wabash. The OBJ
feet Of the committee in having these ex-
aminatons made il is announced, is to find
out just what the needs of the property are
and then TO formulate and carry out, in
cooperation with Kuhn. Loeb & CO., plan
10 place the financial structure Of the COM
pany upon a sound and permanent basis.
I'p to the close Of business yesterday no
funds had been deposited with the Equitable
Trust Company. trustees Of the first re-
funding and extension mortgage bonds OF
the Wabash Railroad to meet the six
months interest due January 1 on the
bonds. which makes it apparent that the
company will default on the payment. This
committee. however. as we'll as the other
Wabash bondholders' committee, headed by
James y Wallace, has made arrange
ments with the bankers to advance to de-
posting bondholders the money 10 pay the