The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1912-05-21
BATTERED FINANCES OF
PERE MARQUETTE Barred
IN COURT By RECEIVERS
Roads Obligations During Year
$5,204,0O0 With Only Half
That Sum Available
EQUIPMENT NEEDED, TOO
New Plant Required Immediate
ly Will Cost $2,OOO,OOO-
Where's Cash Coming From?

The affairs OF the Pere Marquette
railroad were thrashed out before
Judge Angel, in the United States
district court, Monday morning. The
specific petition before the court
recommended an order authorizing
the receivers. to pay the interest on
the underlying bonds OF the Chicago
&c Western Michigan railroad, which
amounts to $4,000.
Explaining the affairs OF the road,
Frank W. Blair, one of the receivers,
stated that the income for the year,
figuring on a five per Gent increase
over the gross revenues for last year,
would be about $17,500.0O0, and flgur-
Ing the operating expenses at 20 per
cent they would amount to $4,000
900, the balance left for the payment
OF interest and maturing obligations
amounting to $2,605000. The obliga-
tions that have to be met during the
current year amount to $500, 900,
about twice as much as the amount
available.
There is payment OF $588,000 In
lterest due about July 1. that 1t is i'm
possible to pay out of income. II will
be necessary to issue receivers certi-
Ificates II these payments are to be
met. The outstanding claims for ma
lterials and supplies amount to ST.
$4,000, and the principal and inter
est on equipment bonds falling due
amount to $1,S4O,0O0.
Mr.. Blair S.ated that the receivers
recommended the payment of the in
terest on the Chicago & West Michi-
gan bonds only on condition that the
equipment obligations might be taken
care OF by the Issue of receivers
certificates.
Following Mr.. Blair, General. Man
lager Cotter took the stand.
viii you state what expenditures
lyou consider necessary for improve
ment on the Pere Marquette to enable
it to be operated as It should be to
perform its public duties and It's
duties to the stock and bondholders? p
said Attorney H. M. Campbell.
Mr.. Cotter then gave a list OF the
things needed, including 80 miles of
90-pound rails, to cost $536.000.
These are to be used on the main
line between Detroit and Saginaw"
said Mr.. Cotter, and the rails now In
use there will be put on the Grand
Rapids-Bay View division. The rails
taken up there will be put on the
branches where there are now 80.
! pound rails which have been declared
unsafe for traffic by the railroad com
mission"
The list OF immediate requirements
also includes engine houses in Port
Huron, Toledo and Ludington, to cost
$l5O,OO0; coaling plants in Saginaw
and other points to cost 500, 900, yards
In Port Huron, and Toledo to cost
$l5O,OOO, and new depots in Ludington,
Port Huron, and st. Joseph.
! If we don't get authority to build
these stations from the court we will
get orders from the railroad commits
sion by wire" added Mr.. Cotter.
The equipment requirements listed
were 40 lomocotives, 80 for freight
service, 40 cabooses, wrecking train
and ditching machine. Permission
to scrap 80 locomotives which are
obsolete was also asked for. The new
equipment would cost $1,109,S00.
The total expenditure required for
immediate improvements amounts to
a little over 100000 said Mr.. Cotter
The receivers asked for instructions
on the payment of certain current ex.
penses which were not covered in the
original order appointing them, such
as advertising expenses, medical
charges, telegraph tolls, legal ex
expenses, etc. The receivers were
held not liable to pay claims arising
lout OF personal injuries.
In connection with the request fol
permission to pay the interest on the
Chicago and West Michigan bonds a
letter from Newman Erb, one OF the
receivers, was read in which he stated
that the Pere Marquette road Is fully
able to pay operating costs and inter
est on underlying bonds, the integrity
of which would not be disturbed BY
any reorganization, however drastic.
w. w. Grape, a Dondholder, wrote
that no certificates should be issued
which would impair the rights of the
underlying bondholders, and suggested
that all certificates which may b.
issued in the future should be subject
to the claims of the underlying bond
holders.
Judge Angel took the recommends
tons under advisement and stated thai
he would issue hia orders within q 40