Delaware gazette and state journal. (Wilmington, Del.) 1883-1902, 1893-12-21
George Fred Williams yesterday after.
noon. Mr.. Williams

and analysed the situation as follows:
Under the instrument of trust by
which all the stocks of Boston gas com.
panies are held as collateral for trust
certificates issued by the Mercantile
Trust Company Of New York, and
called Boston United Gas bonds, there
was permission given for the issue of
. 100000 of trust certificates, or bonds,
as they may be called for convenience,
There were originally issued only
$10,000,000 Of these bonds, and l take
il that this whole transaction is method
employed to get the additional 81 100000
OF bonds issued for the new stock Of
Sl,500,000 which, by the finding Of the
commissions in this State, recently, the
Bay State company Of Massachusetts
was authorized to issue.
"The pith of the matter is, that the
Bay State company Of Massachusetts
has given its 81 100000 of new stock to
the Bay State company Of Delaware to
purchase the $4,5O0,0O0 obligation held
by the Bay Stale company of Delaware,
which the Legislature of Massachusetts
demanded should be delivered up can
celled by the Massachusetts Bay State
company ii it wished to save itself Il re-
peal of its charter.
The roundabout method of doing this
business cannot be fully explained very
clearly, but it is not so complicated
when one bears in mind that the Bay
State company of New jersey is, under
the instrument Of trust Of the Mercan-
tile Trust Company, the issuer OF the
| bonds.
"rhe $1o,oooOOO already issued were
/ xsyVittnNt tN,r SAnN- 80
New Jersey, and undoubtedly, if any
new bonds are written, they must come
from the same source. This explains
the Intervention of the New Jersey com
| pany, which, by the way, is only a
paper corporation without cash capital
or, i'll fact, anything but a mere corpora
tive existence.
"This was the transaction: The Della
ware Bay State company held the
$i,500,0O0 obligation. 1t was willing TO
deliver it up if il could get
ALL THE NEW STOCK ISSUED
by tine Bay State company of Massachu.
sets, namely $1,500,000.
THE Mercantile Trust Company
which already held the original $500, 00[
Of Massachusetts Bay State stock
would not permit this new stock to go
into the hands of the Bay State 81
Delaware, as that would clearly give il
full command of the Mercantile 'rrus
Company. Therefore, the Mercantile
Trust Company agreed to take the
81 10000 of new stock and to pay fol
it by new issue of bonds.
"The issue OF $2,000,000 of bonds was
due to the fact that the bonds are wortl
but $50 per 500, and all the loose tall
about
AN ADDITIONAL ISSUE OF $7,0o0,000
for improvements is merely cover fo
the overissue of bonds for the purpos,
of getting possession Of valuable stool
of the Bay State Gas Company of Massa
chusetts.
"trhe fact that the Mercantile Trus
Company has insisted that the new bond
shall be kept in the safe deposit box
subject partly to its control, is due prob
ably to some side transaction between
the Mercantile Trust Company and tn
Bay State company of Delaware to Sc
cure this overissue of bonds.
"The Bay State company of Della
ware delivered up the contract to tn
Bay State of New Jersey. The Ba,
State of New Jersey issued 100000
worth of bonds, and they were receive
by the Mercantile Trust Company, to
4 gether with the $4,5oo,00O obligation
When the $1,500,000 of new stock G
I the Massachusetts company was read
l for delivery, the Mercantile Trust Com
!. pany took it and delivered to the Mas
, sachusetts company the $4,500,000 obi
cation for cancellation, then certitie
=, and issued to the Bay State of Delawar
$ $2,000,000 of bonds.
1.-The long and short of the whol
J. business is that whereas, before the az
of the Legislature, there were SIT 900 ,0C
:, OF bonds and stocks issued on the stocl
y of the Boston gas companies, there al
s now $19,000,000, Our Legislature h,
6 already ruled that this proceeding is
harmless act.
"They couldn't afford to let this ne
a stock go into any one else's hands, b
cause its securities would be endangert
by this move.
2 To-day the plant in Dorchester CO.
:, trolls the gas business of all the 9th
y companies. If the control of the stoC
y of that company left the Mercanti
Trust Company, the gas compani
! would be at the mercy of the owners
y the majority of the stock.
y ut has been plain to me that wha
"a ever deal was made to get this $4,500,0
y obligation settled must be made with ii
= Mercantile Trust Company of Ne
4 York.
y "Probably the Mercantile Trust Cor
~ pany has agreed that if the bonds shou
u be left within reach it would clear
the other obligations that are n
brought to light by these public stat
Of ments."
h. Mr.. Williams criticised some of /
III statements of the above bulletin of t
ne Boston News Bureau as untrue and CT
re culated to deceive, being plainly inspir
he by Mr. Addicks. In the light of \
n Williams remarks printed above, the
re statements stand plainly for what til
a. are worth.
St, MIR. Williams was also of the opini
of that this new and ingenious method
in stock watering cannot prevent fall
the value of the securities. They tend
Vn downward yesterday.
ly The gas commission will .lnd pier
ry of work in consideration of this NJ
of scheme. Now that the Legislature /
M dropped the matter, the commission
of the only power that stands between
ID people and the gas companies.
10 ---
700 ABRA1Es0N SALE FRIDAY.
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