New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-08-31
Ask Additional
Receiver for
The NJ, K. & T.
Speyer & Co. in Petition
Say c. E. Schof Favors
Opposing Interests

ST. LOUIS, Aug. 30.-Application for
an additional receiver for the Missouri,
Kansas e. Texas Railroad was filed in
the Federal District Court here to-day
by Speyer & Co., Of New York. Circuit
Judge Hook will hear arguments on the
petition in New York on September Z.
The additional receiver is asked on
the allegation that Charles E. Schaff,
now the sole receiver, is favorable to
the reorganization plan Of Hallgarten
& Co. and Seligman & Co., of New
York. Speyer & Co. claim that this
reorganization programme makes too
much OF a curtailment in the fixed
charges.
Receiver Called Pessimist
The statement also is made in the
petition that Mr.. Schaff is inclined to
take too pessimistic view of the pros
poets of the road and that he does not
give proper weight TO suggestions for
improvement in operating management.
Speyer & Co. filed the petition as
holders Of 100000 of two-year notes
and portion of the general mortgage
bonds and Of part Of the first refunding
fours.
The fixed charges and sinking fund
charges now aggregate 100000 a
year. Il is stated that the reorganiza-
ton plan Of Hallgarten e. Co. and j. &
W. Seligman & Co. cut the fixed
charges to s3,sOO,OOO, while Speyer &
Co. maintained that the fixed charges
could be safely fixed at about S4,50O,-
900, in which case they would still
amount to only 62A per cent of the
average net earnings for the years
from 1911 to 1915. The bankers fur
Their state that the fixed charges Of
s4,5o0,ooo are justified by the past and
present earnings capacity Of the sys-
tenn, especially In view Of the new
money which is to be raised through
the reorganization.
Differences of Opinion
Differences Of opinion, the petition
states, have arisen between the present
receiver and the holders of the two
year notes and general mortgage bonds
as TO a number of questions of policy
such as prompt payment Of the inter
est on s40,000,000 Of 4 per cent first
mortgage and other underlying bonds.
In view of these differences and of the
fact that the interests of the junior
security holders differ from the inter
csts of prior lien holders, the petit
TONERS claim that the junior security
holders are entitled to a direct repre-
sentation in the management of the
road, especially in view of the fact
that the receiver has shown himself
TO be a partisan Of the proposed plan,
which favors the holders of prior
liens" They also state that the re-
ceiver in discussion upon the merits
of a plan of reorganization should not
align himself with one set of security
holders against another.
Estimates at Variance
Attention is called to the fact that
the estimates of the receiver, given by
him from time to time as to the re-
quirements of the road "are so much
at variance with each other, and with
the actual ascertained results, that
confidence in his judgment as to other
questions is impaired" For these rea-
sons the petition asks that another
competent railroad man should be ap-
pointed as an additional receiver ain
order that the court may have advice
as to the proper management of the
railroad which is uninfluenced by any
preconceptions or pride of opinion, due
to a connection with the management
of the road prior to the receivership,
or by any prejudice in favor of any
particular plan of reorganization or
any particular class Of security hold
ers."
The road was placed in receivership
on September 81. 1915. after efforts
made BY the various groups of security
holders to effect a readjustment had
proved unsuccessful. Suit was brought
by the Railway Steel Spring Company,
and Mr.. Schaff, who had been acting
as president of the system since 1872,
was appointed sole receiver.