The Detroit times. [volume] (Detroit, Mich.) 1903-1920, 1914-07-08
Issue of S4,OOO,OOO Worth of Re.
cevier's Certificates viii
be Authorized Dur
ing Day
is HALF OF AMOUNT
NAMED IN PETITION
Two Million Dollars of Back
Taxes is First Lien Against
Property

Hearing on the petition OF the re-
ceivers Of the Pere Marquette rail-
road for permission TO float an issue
OF receivers certificates TO care for
the more pressing obligations OF the
system was resumed before Judge
Tuttle, in United States court, We'd
nesday morning, with every indication
that the court would, before the close
or the day, grau permission for an
Issue OF $t,000,000, one-half the
amount asked in the petition.
Judge Tuttle clearly indicated his
determination to pursue this course
Tuesday afternoon, intimating that
the only point for decision today was
that of what priority the issue shall
take as regards the securities of the
underlying bondholders.
or the proposed issue, $4,000 900 i'm
medtately necessary for the payment
or back taxes unpaid since 1912. will
be as a first liep on the property, ac-
cording TO plans outlined by the
court Tuesday afternoon. II the in
terested parties will take up the re-
naming s2,000,00O, or find a purchaser
willing to make the investment az
five per cent interest, Judge Tuttla
viii place this half OF the issue sub
sequent to the divisional mortgages.
In case this is not done, the entire
issue OF $4,000000 will be made a
nrst lien on the property and the
only recourse of the security holders
VIII lie In an appeal. Counsel for the
Dondholders indicated that they
would avail themselves OF this course
II such action is taken.
Judge Tuttle also indicated his DE-.
termination to sell the system with
the least possible delay, probably IN
october, when Dean Cooley. who h
F! making an appraisal under the direc-
Clon or the state railroad commission.
completes his work.
lean Cooley was the first 10 taks
ie ssand when the hearing was re-
| noon. aiter-
tiaae ne explained, in detail, his opera
.n making an appraisal OF the
properties of the Pere Marnuatta
IL constitutes an inyentorv of 81.
road S books he said. "Tbis insor
nation is then put In the banI, -
engineers who are going over the .vs
tenn mile by mile, so that wban a.,
specuon is finished we will have
complete inventory OF all parts of The
property" u tne
lie explaine dthat actual vaIues =,
railroad properties was about t,vo
thlrds OF the book value He said ~.
the 0ook value OF the Pere Marouat,a
was approximately S111. 600 O00 ara
Chat the actual value would ho ha
tween 100000 and $4,000. 600. This
valuation, he said, would NOT incI,,d.,
roillng stock, equipment or anvthino-
or that sort
Inc nnal appraisal will. he said
snow the intangible as well as the tan,
sIole assets OF the company. He
Wouid not venture to predict whethar
mere would be any Intangible" as.
sels TO include in the final net hg.
ures. "eS hs-
Juuse futile forestalled anv effort
20 OBJECT to the appraisal by announc.
ING that he had directed IN ereceiv.
ere 10 pay for the appraisal. provided ,
tnat the railroad commission tooI(
cnaFge or the job He insisted that he
was Wen within his authority as he
ldu IoIlowed the custom of prohata
Juuses In first ascertaining the value
OF properties which come under thei,
Jurisdiction
IL was important that the court
should know something of the nron.
erty with yhich IL had 10 deal" said
Judge Tuttle, before authorizing
elther an issue OF certificates or the
sale OF the property. | hope and ex.
| pect the sale OF this road will take
place at no distant date. and it will
be necessary for me 10 know the min.
lmum price at which the system
should be disposed Of Everyone
present can take an exception 90 the
courts findings il he wishes 10 do sou
Attorney Hal Smith. representinE
the underlying bondholders. inquired
II there was any authority in law 10
compel security holders to pay the
railroad commission for obtaining in
formation the experts OF the road
are supposed to have ttorney.Gen-
eral Grant Fellows replied that he
believed there was such authority. and
insisted that the railroad commission
was not responsible for the bad in
Nestments OF security holders.
In reference TO equipment obliga-
tons, Frank " Alfred general man
ager for the receivers. said that but
S3,000,O00 OF contract price OF sl4..
100000 had been paid for equipment.
A 2 Osborn. counsel for the equip
ment companies. said that the mate
rial could be seized IL the money was
not paid and Mr.. Alfred showed that.
in this event. the company would be
forced 10 expend 100000 a month for
the rental Of the necessary equip
ment 10 remain In operation. whereas
It is nov. spending but $4,000
month for that purpose The list OF
equipment which might be seiEed for
non.payment includes 5000 freight
cars. 200 gondolas. so locomotives. g
senger cars
The Pere Marquette will hereafter.
be a "dry" road. Judge Tuttle having
ordered the receivers not 70 obtain \
renewal OF the government license.