New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1922-08-31
Strikes Force
G. & A. Into
Receivershiu
X ailroad's Debts Reach
$4,000, 900 as Judge of
u. S. Court at Chicago
Grants Creditors Plea
Securities Decline Here
Mine Shutdown and Extra
Expense of Shoplnen's
Walk-Out Called Cause

| CHICAGO. Aug. 30--The Chicago
& Alton Railroad was placed in the
hands of receivers in Federal court
to-day by Judge Carpenter. W. G..
Bierd, president, and w. w. Wheelock,
an attorney, were. named receivers.
According to a statement by Silas II.
Strawn, appointed counsel for the re-
ceivers, the receivership was precipi-
tated principally by the great falling
off in the earnings of the company
due to the coal strike and by the
extra expenses cue to sshe shopmenss 4
strike.
The suit resulting in the receiver
ship was filed by the Texas Company
Of New York and Chicago, creditor
with q claim of about $33. 900, At the
Offices of Mr.. Strawn is was stated the
receivership will not in any way
change the operation of the roads 5
! trains.
Debts Total $4,000, 900
Mr.. Strawn said the board of di-
rectors of the road, meeting in New
/, York to-day, admitted the roads in
solvency. The total indebtedness, it
was estimated, will amount to about
| S14,0O0,000. What the assets total at
this juncture it is impossible to say,
Mr.. Strawn said
"The Chicago g. Alton Railroad Com
pany has for several years been un-
, able to meet all of the interest on it's
6 per cent general mortgage bonds,"
Mr.. Strawn's statement said, '4but the
! holders of these bonds have permitted
the interest to remain unpaid in the
hope that general railroad conditions
would ultimately adjust themselves in
such way as to restore the property
E IN h 1os
| perity.
Until the strike commenced April i
+; gross earnings of the Chicago G. Alton
were very good, but, like all railroads,
| 1t has been suffering from excessive
and unreasonable operating costs, both
| in wages and materials, especially fuel,
and steadily mounting tax burdens.
i The directors, however, have been
hopeful that these conditions would
soon approach more nearly to normal
or would, in part, at least, be met by
/ offsetting factors of helpful char
acter. But such excessive costs bear
particularly heavy on short railroads
with expensive terminals, such as the
Alton, which operate little more than
/ 900 miles, and terminating in the
cities of Chicago, st. Louis and Kansas
City, with an average freight haul Of
only 185 miles and an average pas
senger haul Of only sixty-fye miles.
Strikes Precipitate Action
aThe receivership at the present
time, however, was precipitated by the
great falling off in earnings due to the
coal strike and also to the further
long continued and extra expenses due
to the shopnlen's strike. The COM
pany's normal coal traffic is heavy, and
practically all mines on its lines have
been closed since April /, thus entail
ing heavy loss in revenue, and at the
same time it has been compelled to
buy much of its fuel coal from South
ern fields, which, with added freight
charges paid foreign lines, cost 1t two
or three times the former price.
Through these eoncurriag losses in
revenue and unusual expenses the COM
pany has fallen behind, exhausted it's
current resources and is not able to
continue operations without aceuru-
lating large floating debt, which the
directors did not feel justified to incur
and probably could not have incurred.
1.-THE board of directors therefore
felt that no other course was open to
them than to acQniesce in receiver
ship for the preservation of the prop
erty in the interest of creditors aud
security holders"
Although the news that the Chicago
g. Aitcn had been placed in the hands
of receivers was not received until
long after the close of the Stack Ex-
change, the move was forecast in the
decline Of the roads securities. Re-
ports were current throughout the day
that steps were to be taken toward
a readiustment Of the company's finan-
ciai structure.
Announcement was made last night
that q protective committee had been
formed for holders Of the 3M per cent
frst lien fifty-year gold bonds, due
1850, of which $22, 600 600 are outstaad-
ing. The committee Is headed by f. III.
Ecker, vice-president of the Metropoli-
tan Life Insurance Company. The conn
mittee expects to announce shortly q
/ plan under which deposits will be ac-
cepteds The Farmers Loan and Trust
Company Of New York win act as de-
positarys