Perth Amboy evening news., 1906-03-12
MORGAN READY
TO TAKE ROAD
Public Service Corporation TO
Surrender Control Of Enter
priseS Within Ten Days.

Within the next ten days proba-
bly, at the annual meeting of the
Public Service Corporation March
20, the big deal whereby the Morgan
firm of New York and Randall Nor
gan and other Philadelphia capital
lists will take over Il two-thirds in
terest in the twenty-five million dol
lar trolley, gas and electric lighting
plants in New Jersey controlled by
the Public Service Corporation will
be completed.
None of the officers of the Public
Service Corporation would say yes
terday exactly how far the negotia-
tiOns have progressed. 1t is known.
however, that representatives of the
Morgan firm have practically COM
pleted the examination of the books
and securities of the Public Service
Corporation. and that last Thursday
engineers and others in the employ
of the New York concern made an
inspection of the physical operation
of the trolley, gas and electric light
ing plants. 1t has been found that
the gas and electric plants are in fine
condition and are making large
profits, but that the trolley lines are
not in such condition and are not
making as much money as they
should be. In other words, the in
vestigators have found the condi-
tions exactly as they were set forth
by the Public Service Corporation
officials when the negotiations We're
opened for the bringing in OF about
elE nuu ono 0f OpW ranit9l
Exactly how the details of the big
transaction are being worked out in
regard TO stock, bonds, certificates
and notes has not been allowed TO
become public even in the smallest
part. 1t is said, however, that one of
the propositions under consideration
is to call in the $20,000,000 issue of
Public Service certificates and re-
place them with an issue of bonds.
The certificates pay " per cent. in
terest this year and are graded to in
crease in interest at the rate of one
half of one per cent. each year until
they bear per cent. The bonds
mentioned are, if they are issued, to
bear straight interest at the rate of
4 per cent per annum. Whether the
widely scattered holders of the GER
Illltdltos NhlND lC lt9tl Ntu 90 q
good investment would consent TO
this plan is problematical. There is
no way to compel them to do SO.
Another part of the financial plan
is said to he to have the Morgan firm
take the bonds of the underlying
companies of the Public Service
which are held as the backing or
collateral for a note issue through
which millions of dollars were fur
nished for the improvement of the
various concerns, and sell them. In
the case OF the North Jersey Street
Railway Company alone the Public
Service Corporation advanced about
S7,250, 900 to rehabilitate its lines
In return for this bonds of the
North Jersey having face value Of
about S11 100000 were taken over
as backing for notes. The market
value of the bonds is now a trifle over
100000, so that if they are sold
the note issue can be taken up, and
the Public Service Corporation will
gain about S2,000,000 in ready cash.
This can be added to the $12,5OO,-
600 which will be received from the
sale of the treasury stock through
Morgan q Company and would aid
materially in the reconstruction
plans.