New-York tribune., 1912-04-06
GOES UNDER RECEIVERS
Pere Marquette Railroad in Their
Hands Second Time.
NO BOND ISSUE PERMITTED
Earnings of the Company Not
Enough to Meet Its Fixed
Interest Charges.

" blair of Detroit; Dudley y. waters
Of Grand Rapids and Newman Erb' oi
New York receivers for the Pere Mar
,uctte Railroad Company. Tho state de-
,,t.d Yesterday the application OF the rail
lcad company for a 100000 bond issue.
Receivers were appointed on petition
filed bv the American Brake Shoe ana
Foundry Company of New Jersey. Inc
railroad company operates about -ozo ilh'eS
Of railroad. OF this $40 miles are in Mich
iean. the rest being in ohio. ILLINOIS ana
ontario Canada
The bonds. mortgages and other liah'h-
,tee Of the company aggregate $f96N9Vo'
If was stated in the application Tor the
S4oOo0n, bond issue that tn" iunds were
necessary to take care Of outstanding IN
debtedness. as no resources for that pnr-
pose were on hand
Tho complaint asking for I'''l'''
hlames the recent document 'aiI'uS d''''
lion to the roads financial oo"u'"v.
drawn ND by the Saginaw Board ot Ir8u''
as partially responsible for us present
trouble ~,
The nassiue Of the Pere Marquette R''
road Company into receivers hanoS was
,,o. ,,ravnected after the action OF the state
ps,road Commission in refusing to ao'hoI-
,zo = SGoooo bond issue requested 10y IN.
,,.,,,,..r, 10 meet maturiucS Que NH"
.,d otbe, requirements. Governor 'Sp'''
arroar.d before the commission ana "l-
,,o..d ,b. issue. IIc urged that !. J. MOI
,,,. 90. other heavy stockholders come ~
the relief Of the COMPANY
Newman Erb Hints at Politics
Newman Erb. Of New York, chairman o'
1be executive committee and one "i ''1
4 .tafC
which he says.
There is practically no hosune %I'ruo %tu,' ,aI-
,,,esent bonded Obligations ol lh' - 'i' of
,r',.r pailroad are below IN" aNtiaE' -, "
similar railroads and its stock ,dpCa''1Ii is
is considerably below Su'o HN,r"eb eboard Of
,b. beUof of the management, iHe po"t w. U
S;re,tors and the banking interests "lc.t.
,oad that the request Inaut 10 1' u.o,,Id
Railroad Commission II s'@I' .n tiddo over
have enabled tho company 10 ''r' rartiy
a.. diN3c,lties Tho commission apPa'cHVS
iCok a different view. Many 1Ile,4s 4s.,,otte y, ,t,
management believe Inc ,Ta ,,a,,,e
Railroad was mdut 4'O''''
of politics.
NJ rrh said there would be no change IN
.ho management Of the railroad, but tn"'
,na receivers must acquaint themselves WIN
.no axistIng conditions before definite
poicy can be decided upon.
Announcement that receivers had oeel.
ennoInted for the Pere Marquette KAN o'''
did not cause much surprise In wan 0u 60 60
as the annual report published lo"
,reaks aro. showed that the road hau n''
earned its fixed interest charges Tor '.o
Ascal wear ended June 80 by appioNiila''''
,anOn. The direct cause OF the rece'N'i
shin WAS attributed. however ny Interests
in this city closely identified with the com
rany to the refusal of the MicmGah ol"'
Railroad Commission to allow l"e io"O "
carry out arrangements it had maue Io'
borrowing money TO meet maturing ooh9"-
t,ous According TO these interests. II be-
came necessary that receivers Sho"iu 't
appointed, so that the interests oI d' 0''"'
itors might be protected.
n was explained that the Pere Marquette
Lad had a very hard winter, the operating
cost. owing 10 the unusually heavy snow
storms. having run up as high as l15 pei
cent Earnings had been picking up r.
Gently. however, and IT was hoped that IN
a few months the road would he more thal
earning its fixed charges. IN the mean
time IL was found necessary to raise funds
10 pav eff some Of its more pressing meI-
chandise debts, and for this purpose tie
companv vainly sought permission Of the
Michigan Railroad Commission to Sell 81
C1O0n0 bonds.
This is the second receivcrship for the
Pere Marquette. JudsOn Harmon, now Gov
ernor OF ohio. having been apl onted re-
ceiver for the road, ana also OF the On
cirnati, Hamilton & Dayton Of whose sys
TEN il was then a part, on December /
1895 4 plan for the reorganization Of the
company. which. in addition TO readJustne
fits finances. provided for its consolidation
with the Pere Marquette Railroad Com
uany. OF Indiana. ana its restoration rs al
indcpendcntly operated road was ratified
ly the stockholders on December =. 10
and Oh December Il Of that yedr the re-
ceiver turned over the property 10 the
stockholders.
The new company. formed by the con
solidatiou of the old P,re Marquette Wit
the Indiana company had been incorporat
cd under the title of the Pore Marquette
Railroad Company. With capital stock o
As0naH0. consisting of Sl62JOl,0 Commoa
81 ,16eYcO per cent hIst preferred, cumu
Jatiyc after three and one-haf years am
with preference as To- assets. and Sl.01"I"
per cent uon-cumuldtiyc second preferred
As q part Of the reorganization plan t''
stockholders subscribed for }JNA"o pc
cent nve-year dcbentures of tue h"W com
pany which were used IN Iayng thc float
ing debts of the former company and re-
ccivcr's certificates and for other corporate
purposes.
Morgan Interests IN Control.
The Cincinnati. Hamilton * Day ton Rail
WAY continued 10 control the new company
through the ownership of NL"o,Vp OF it.
common stock the stock Of the old com
pany having been eNchane q. snare tp
share for stock u the new company uHd"i
the terms Of the reorganization plan Tie
Cincinnati, Hamilton a Dayton acquired it-
Pcre Marquette stock iu 1901 and 1919. ia
fIrthcraucc Of q plan Tor establishing th'