The sun. [volume] (New York [N.Y.]) 1833-1916, 1907-05-19
B.. R, 7. TO SPEND $85,OOO,OOO
1T TELLS HOW 1T PROPOSES TO
RAISE THAT SUN.

Intend 70 Authorize Mortgages TO secure
Certificates OF indebtedness for Cash
Advances to Make Additions and I'M.
p~FOyements viii He Settled In June.
The Brooklyn Rapid Transit Company
announced yesterday a plan for financing
improve pents and extensions on two Of
it's most important subsidiaries and funding
an indebtedness already contracted by the
dominant company for the subsidiaries.
TIT Brooklyn Union Elevated and the
Nassau Electric Railroad Company are the
subsidiaries concerned In the new financing.
TIT omount involved is S25. 600. 900. Of which
$40, 90 900 is to be q fixed charge on the
Brooklyn Union Elevated and IS 900. 900 on
the Nassau Electric.
In accordance with the plan special
meetings OF the Brooklyn Union and Nassau
Electric have been called for JUNE 10 and
June ii respectively to authorize mortgages
in the amounts named above TO secure
certificates OF indebtedness heretofore or
hereafter issued by those companies to the
Brooklyn Rapid Transit for cash advances
from that company. These cash advances
were made or are to be made to enable
the subsidiaries to make necessary additions,
bstterments and improvements and for
the purchase OF new equipment.
The financing is further explained in a
statement from Charles Meneely, secretary
and treasurer Of the Brooklyn Rapid Transit
Company:
The plan is in pursuance Of the system Of
financing adopted some years ago by the
Brooklyn Rapid Transit Company, which
was, in brief. that instead Of each separate
company Of the system attempting TO finance
it's own requirements by issues Of securities,
the Brooklyn Rapid Transit Company would
ale H. l-1- - 49, IL ~ ta
own bonds, and with the proceeds advance
money to the constituent companies from
time to time and TAX in exchange their notes
or other obligations for such advances.
In pursuance OF this plan the Brooklyn
Rapid Transit Company issued Its mortgage
dated July /. 1902, TO the Central Trust Com
pany OF New York as trustee for $50. 900. 900,
OF which about Ssi 600, 900 was reserved TO
take up at or before maturity the underlying
bonds OF the Brooklyn Rapid Transit Company
and its constituent companies, 1t was the
intention at the time Of the execution and
delivery Of this large Brooklyn Rapid Transit
Company mortgage that the certificate OF
indebtedness TO the purchase from the con-
stituent companies should be secured by the
mortgages of the company issuing the same:
other wise the Brooklyn Rapid Transit Com
pany. as the owner Of such certificates, and the
Brooklyn Rapid Transit bondholders, having
q lien on such certificates, would be In no
better position than that OF any general
creditor OF the constituent companies.
This will be accomplished In the following
manner The Brooklyn Rapid Transit COM
pany has entered into agreement with most
OF Its constituent companies to furnish from
time to time within the next ten years such
moneys as each of these companies shall
require for extensions, improvements, adj
ditions, dc, up to a maIlmup amount, and
to take In exchange therefor the certificate
OF indebtedness Of such oompsny payable
on demand, upon condition that not only
the certificates OF indebtedness yet to be
issued and sold to the Brooklyn Rapid'Transit
Company, but also the certificate heretofore |
issued, shall be secured by the mortgages
OF the railroad company issuing such certi-
as collateral security thereto.
The Board OF Railroad Commissioners
has already authorized such mortgages by
the Sea Beach Railway Company. the Ca
Railroad Company and the South
Brooklyn Railway Company, and after the
approval by the stockholders Of the Nassau
and Brooklyn Union Elevated Rail-
road Companies. will be ask ed TO give It's
also to the mortgages TO be issued
by those.
The mortgages for which consent 70 re-
to the extent that they secure past
expenditures, do not add one dollar to out
standing capital charges; TO the extent that
secure expenditures hereafter TO be
they carefully limit such expendi-
lures TO the actual cost Of additions. improve
and extensions. The certificate Of
shall not be issued at less than
par and must represent such actual COST.
Under the terms Of the Brooklyn Rapid
Transit Company mortgage, bonds issued
under that mortgage must be issued at par
FOR the par Of such certificates Of indebted
ness. and any deficiency arising from the
sale OF Brooklyn Rapid Transit bonds at
than par must be made up out Of the
earnings Of the company.
Under the same financial scheme previous
mortgages have aggregated but 1900, 900,
the present plan c~ontemplatee a greater
for improvements than ever
undertaken. Very nearly all OF the
200. 900. It is said. will be devoted to i'm
provements to be made and very little to
those already completed.