The New York herald., 1921-02-26
A. B. "a. Is PLACED
IN RECEIYERSHIP
Road Says 1t Cannot Pay Ex-
penses and Agrees to
Proceedings.

ATLANTA Feb. 25-Judee 5. H. Sib-
ley. in the United States Court. signed
to-day an order appointing Col. B. l..
Sugg, president OF the Atlanta, Blrming-
ham and Atlantic Railroad its receiver.
The order was issued on petition Of the
Birmingham Trust and Savings Com
pany of Birmingham. Ala. which alleged
that it held note for $90,000sdue March
z. which the road was unable to pay
The railroad company agreed TO the
receivership and to-day's proceedings are
r sequel to the company's announcement
on January that wages would be
reduced on February ], followed by a
protest of its employees that went be-
fore the Railroad Labor Board, and the
refusal of the board to assume jurisdic-
ton over the wage dispute.
This is the second time that the road
has been in the hands Of the court. 1t
was under a receivership from 1909 until
1916. In 1916 it made money. it was
stated, and was taken out Of the hands
of the receiver. Federal control fol-
lowed in 1917.
In its petition the Birmingham Trust
and Savings Company said that although
the roads gross receipts were $4,000
mile a year. it was losing 100000 a
month, and that it's only salvation was
for the court to take charge
Counsel for the company in answer to
the petition admitted that the road was
operating at q loss and that with the
Railroad Commission fixing the rates
and the Railroad Labor Board fixing
wages, ii was unable TO meet expenses
and in the interests of all parties con-
cerned a receivership was desirable.
THE A. 3. a. is a good property.
ssrves large part Of Georgia and taps
a productive country said one of its
New York directors yesterday. Yet
il has been losing approximately 100000
per month for months. Most of this
loss is due to the high wages it must
pay it's employees. 1t did not benefit
with other roads in the freight increase.
for it hauls few passengers and little
milk, on which the increases were heavi-
est.
The roads finances are in good shape
Its bonded debt is ss,633,907 and it has
$780, 900 of stock. 1t requires but 500, 900
TO meet its fixed charges. But we are
Just UP against the proposition Of pay
ing out something like 5000 more per
day than we are taking it and it cannot
be done"
New York directors of the road are
Howard Bayne, chairman OF the board
Percy r. Pyne and George c. Clark. Jr
The history of the Atlanta, Birmingh
and Atlantic case is typical of many
small roads in the South. 1t covers $40
miles in Georgia and employs a great
many negroes on its lines. When the ma
tional gareements went into effect these
employees were all paid on the same rate
scale as were employees OF large roads
in other parts of the country. Late in
December Col. B. L. Bugg, president OF
the road, who was appointed yesterday
receiver. applied to the Railroad Labor
Board for permission to reduce wages to
meet the going price of labor in its dis
trict He was instructed to return and
confer with the roads employees. and n
second time he applied for permission TO
put into effect reduction. which had
been presented to the board In connection
with the current hearing and is under
sdvisement.
One of the roads directors said yester-
day that the case is analogous 10 a very
sick man who applies TO his doctor for
treatment and who is ordered back home
TO try and cure himself. He returns home
and again starts for the doctors Office
and Is given the some instructions. On
the way home he dies.
That is our situation exactly said
this director. eve have died on the
way home"
Col. Bugg, in outlining the base Of
the Atlanta, Birmingham and Atlantic,
said: eff we offered the road for sale,
we couldn't even find n prospective pur-
chaser. No one wants TO buy property
that Is losing si,c0oo0o annually. Our
payroll has increased almost three-fod
for every employee since the war.
More than 100000 people are served
By our line exclusively. If this road
should be scrapped they would be with
out rail transportation
10 l,n
New York directors OF the road that
some stronger Southern road might be
glad 20 buy the line and merge it with |
It's own property. I'VE have had no
offers OF this sort" said one OF the |
4. 3. AS, directors, "and + do not !
hesitate TO say that we anticipate |
none