The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1912-04-06
Action Follows Refusal BY State
Board To Permit Further
Bond Issue
DEBT OF THE COMPANY
is NEAR $4,000, 900 MARK
f. w. Blair, Detroit; d. E. Wat
tiers, Grand Rapids, and New
man Erb Are Receivers

Following the refusal of the state
railroad commission to permit the
pere Marquette railroad to issue s4,-
100000 additional bonds to take care
of its maturing obligations receivers
were appointed for the road by Judge
Angel in the United States court, FRI
day morning. The petition was
brought by the American Brake Shoe
and Foundry Co., and the claim for
which the action is taken amounts to
S7,164. The bill was filed April 3. but
was suppressed until the decision OF
the state railroad commission had
been made.
Upon the refusal of permission to
issue the bonds, receivers were APP
pointed. The receivers are Frank w.
Blair, OF Detroit, president OF the
Union Trust Co.; Dudley L. Waters.
of Grand Rapids, and Newman Erb,
chairman of the board of the Pere
Marquette. They took possession OF
the Offices, Friday noon.
The petition sets forth the financial
history OF the road since the present
company was formed in 1907, by the
consolidation of the Michigan and In
diana companies, which have been In
the hands of receivers for the two
years preceding. II shows that the
outstanding stock OF the company
consists OF $14,332,930 common stock,
$923.S60 first preferred and $10,929,-
500 second preferred. The bonded in
debtedness of the company amounts
10 $69, 6S9 900. There are LOO stock
holders. In addition the company has
outstanding $2,536,000 in short term
notes. The cash ON hand on April 1
was S225,000.
There are heavy current liabilities
in addition to the funded indebted
ness Including upwards of million
dollars due equipment companies. and
the petition states that default on
these is inevitable. Default is also
stated to be unavoidable on the prin-
cipal and interest payments due April
4. The operations of the company
for the eight months ended Feb. 20,
1912. showed deficit OF $1,0S1 900,
and the total deficit since the present
organization took over the road IS
$965000.
Among the causes for the Difficult
ties of the road the action of the
L. VI
ing the encouragement to throw the
road into receivership Is mention
ed. 1t Is stated that the report was
widely published and resulted in an
impairment of the credit of the road,
and that the subsequent action OF the
organization in Withdrawing the re-
quest did not receive the publicity
that the first report did.
The Pere Marquette operates in
Michigan, Ohio and Indiana and also
owns the Lake Erie a. Detroit River
railroad in Ontario. II was formed
by a consolidation OF logging roads
throughout the Thumb district OF
Michigan, and has had career full
Of vicissitudes. In 1904 it was leased
to the Cincinnati, Hamilton & Day
ton. but in 1907, when the present or
ganization was formed, the lease was
cancelled. The road has been MIXED
from time to time in the process OF
reorganization and il has never been
on a paying basis.
The attorneys for the petitioners are
Beaumont, Smith & Harris, of Detroit.
and Fallows, Judd & Fallows, OF New
York. general counsel for the Ameri-
can Brake Shoe & Foundry Co. are OF
counsel. Merriam, Yerkes & Simons
appeared for the Pere Marquette.
The appointment OF receivers was
stated to be the only course left open
to the company in case the request
for permission TO issue additional
bonds should be refused by the rail-
road commission when Newman Erb
appeared before them I'm Lansing last
week.
In announcing the decision of the
commission, Chairman c. L. Glasgow
said that the showing made by the off,
Gals of the road was not sufficient to
warrant the permission asked. by
their own statements they show that
the road is a losing proposition" said
Mr.. Glasgow, "and that the bonds are
not worth more than so cents on the
dollar. This money, il raised. would
be used to pay interest on outstanding
obligations, and would in no way in
crease the efficiency of the service.
The Pere Marquette has bonds
amounting to S5,000,O00 that will ma
ture in July, and If we granted this re-
quest 1t would be only a matter OF an