Article Text
In the Hands of a Receiver. Six years ago the Central Railroad and Banking Company, which at the time was one of the greatest and most prosperous railroad properties in the south, passed into the hands of Wall street men. Yesterday a receiver took possession of it. The announcement that it was in a receiver's hands created a profound sensation in this city, as it will throughout the state. The Central has always been regarded as a solid Georgia institution, and as such Georgians feel a pride in it,and & great many of them are owners of its securities. There is some satisfaction in the thought that the appointment of 8 temporary reoeiver was not brought about by a default in the payment of any of the road's obligations. The purpose of the action on which the receivership is based is to break the lease of the Central to the Richmond and Danville. The plaintiff In the suit is Mrs. Rowena M. Clarke, of Charleston, who alleges that she owns fifty shares of the Central's stock. She asks that the lease be broken on the ground that it is against public policy and contrary to the state constitution, and because she believes that she is in danger of losing her property. As is well known, a committee is now engaged upon a plan for reorganizing the properties which are controlled by the Richmond Terminal Company. The Central railroad system is one of these properties. The suit to break the lease of the Central to the Richmond and Danville will doubtless check work upon that plan. Whether it will prevent the plan from being carried into effect is a question that cannot now be answered. It would seem as if the lease was not necessary to the plan of reorganization. The East Tennessee, Virginia and Georgia is an independent corporation, and it is included in the reorganization scheme. The breaking of the lease, therefore, would not necessarily make the reorganization under consideration impossible. Indeed, it might assist it, for thereason that the guarantee of a 7 per cent. dividend upon the Central's stock being no longer in force and the ability of the Central, operated as an independent system, to pay that dividend, or even a smaller one, being doubtful, the minority stockholders might be more willing to accept the reorganization scheme than they would be otherwise. It is difficult to see how the plaintiff expects to be benefited by the course she 18 pursuing. She may think her stock will be worth more with the lease broken than with it in force. But if the lease should be broken the Central system would still be controlled by Wall street men. The plaintiff seems to think that the majority of the stock of the system is so held that it cannot be used legally to control it. But the stock could be so distributed, easily and quickly, as to avoid that objection, if the objection is a valid one. It is, therefore, not apparent what the plaintiff has to gain by her suit. There are, of course, various suggestions in connection with the suit. One is that the Richmond Terminal wants the lease broken to facilitate the work of reorganizing its properties. Another is that there are parties who want the reorganization scheme defeated in order that some of the Central system may be used in forming another combination. No one can say, except those on the inside, whether either of these suggestions have any foundation. In the absence of any information to the contrary, the reasons of the plaintiff, as stated in her petition for bringing the suit, must be accepted. If the suit is not withdrawn it is not improbable that the decision will be against the lease. A decision rendered recently in a case in which a question similar to the one in this case was presented seems to justify such a conclusion. If the lease is broken, how will Savannah's interests be affected? The answer to that question depends, of course, upon whether she would again become the headquarters of the Central, and whether new combinations, which undoubtedly would be made, would be for or against her interests. TTTL
