Page:Vincent F. Seyfried - The Long Island Rail Road A Comprehensive History - Vol. 1 (1961).pdf/72

The South Side Falls to the Long Island was Jacob R. Shipherd & Co., the new owners of the South Side RR. Only a month later—November 1873—the trustees of the third mortgage bonds demanded that the road be placed in receivership. The directors, after vain consultation, agreed to surrender the road. Over the winter months a number of suits were instituted against the South Side RR by the holders of the first and second mortgage bonds when the interest coupons were not redeemed.

In the spring of 1874 a long wrangle broke out between the State and Federal courts as to jurisdiction. Each side appointed a different set of officials to look after the running of the road, and there were absurd incidents of appointees barricading themselves in the company's various offices and converting the premises into a fort against the opposing party, seizure of books, suits and countersuits to repossess them, smashed padlocks, etc.

On September 16, 1874 the property of the road was put up at public auction. As the bidding progressed, it became evident that the Flushing, North Side and Central RR was interested in acquiring the property. Finally, Elizur B. Hinsdale, agent for A. T. Stewart and the Poppenhusens who owned the Flushing railroad, bid in the South Side properties for $200,000. The road's liabilities totaled $2,554,225 and its creditors included not only the various bondholders but also the contractors Walker, Fairchild & Clark, who did the work at Bay Ridge, the U. S. Rolling Stock Co. for lease of engines and cars, and the Schenectady Locomotive Works, who built the last three locomotives purchased.

The fact that there were no less than four important mortgages on the road made the financial arrangements unusually complicated. In June 1867 a first mortgage of $750,000 had been made by the South Side RR in favor of D. R. Floyd-Jones and Treadwell Ketcham as trustees. In September 17 another mortgage, this time for $2,250,000, was placed on the road to secure funds for construction and equipment. In August 1871 the third mortgage of $500,000 was made out in the name of Nicholas Wyckoff and Elbert Floyd-Jones. The yield from this mortgage financed the laying of the double track. The fourth mortgage in the amount of $60,000 was assumed by the South Side RR from its subsidiary, the Far Rockaway Branch RR, and had been executed in favor of Daniel D. Lord and John H. Cheever