New-York tribune., 1907-05-19
HUGE B. R. 7. MORTGAGES
ISSUE OF s26, ,O0Qj0 900.
Loans Made to Subsidiary Com parpies
for Improvements.

Mortgages aPgregrating $2500o,1p) axe 1about 10
be executed by two of the constituent companies
OF the Brooklyn Rapid Transit Company TO secure
the latter corporation upon cash advances maze
and TO be made by it to the subsidiary companies
for additions, betterments and improvements Inc
financing plan IS explained fully in the fosloWlns
statement issued yesterday afternoon by \. u
MeneeIy, secretary ard treasurer of the Brooklyn
Rapid Transit Company:
Notices have been VIII shortly be sent 20 pT ane
road Company and OF the Nassau Electric Raj,
road Company Of special meetings 10 oe oTt doTt4
June % and l. respectively, TO authorize t3 MOI
gage behalf OF the Brooklyn Union M tigVafsa eT b
lir@aa t6o company Ra9ga iof ectrc Rnroad Company
$4,000. 10 secure certihcates OF y1Ies
TO the Brooklyn Rapid Transit Company FOR ceS9
advance from that company enable the railroad
nnents and improvements to their raHroa0S ANA
hThs Is in pursuance of the system OF fnancrss
aqsPtea ompany come WITCH Vas in brief that IN
stead OF each separate company OF tne sysre; isSes
of securlties, the Brooklyn Rapid Transit company ny
would raise the necessary @ o TGaS og sdvanee moneys
70 the constituent companies from time 70 @ tltile
q the constituent companies for such adyanGes G,7
5os1x Tefa fSat iG inasmuch as many millions dol
lars would be necessary for the proper eNteHslUn f
Of security with which the investing public would
pe0ne InaeoUs IaIsI collection Of securities issued
by ue Of this plan the Brooklyn Rapid
Transit Company issued us Inortgage GaSeG T-, s
80 & 70 Cor sj5d o6o Of whth about $6 Ooo 900
reserved to take up at or before n3tarlty Inc = @ @
pany and fits constituent companies The REMAINDER
Of the 69nds gr0eees %sFe 20 fof sdon
extensions. etc, of the constituent companies & ana
issued and sold of such bonds SIS, ,1o 900, and the
proceeds Of such sale haa Hosy nanftas Dgnn their
Certificates of Indebtedness payable on demand i0r
It was the intention at the time OF the execution
and Of this large brooklyn ttaplu 4IahsIS
mortgage that the certificates Of indebtedness 10
would be secured by the mortgages OF the com, com
Rap;d TTans 5sSleE Company. as the owner Of
eeTtiaoates and the Brooklyn Rapid Transit bond
in no stronger position than that OF any general
creditor Of the constituent companies. ,,. -
This viii now be accomplished in the following
manner:
The Brooklyn Rapid Transit Company pa has EN-
tered into agreements with most Of its CONSTITUENT
companies TO furnish from time to time WITHIN In9
panes shall require for extensions, improvements,
safe In eEe6angs B tRePefor the ceacstes
debtedness Of such companies payaptee on oesu s I
debtedness be issued and sold 70 the Brook
iyn Rapid Transit Company. but also the GER I
thcates heretofore issued shall be secured BY c tne
mortgages Of the Tailroad eoP2eS bSeto The
Board Of Railroad Commissioning has alreao1y
sgg ~ 9onIh Rrookl%n Railway Company, and
after he snorovaI by the stockholders of the Mas
sau Electric and Brooklyn Union Elevated Railroad
companies viii be asked 10 give its consent also TO
the mortgages TO be issued by those last named
companies.
The mortgages for which consent is requested to
the extent that they secure past expenditures DC
To the extent that they secured expenditures here
after 70 made they carefully limit such eNpendi-
actual cost Of additions, improvements
and extensions. The certificates OF Indebtedness
cannot be issued less than par, and must rep
resent such actual cost Under the terms or the
Rrooklyn Rapid Transit Conpany's mortgage bonds
issued under that mortgage must be issued at pal
for the par of such certificates OF Indebtedness
and any deficiency arising from the sale of Brook
lvn Rapid Transit bonds at less than par must o'
mede up out of the earnings of the company.
II will therefore, be that not only is III:
investor In the bonds or the BROOKLYN fapiS
Transit Company thereby protected as 70 the Sc
curity Of his lien. but there is no opportunity fo
eny fictitious increase of capital charges. 1t Il
believed that this system Of financing IS not ONLY
conservative, but that only by such means can M
constituent companies be provided with the capl
which has been ana viii continue 10 De essen
tial for the proper development and enlargement
OF railroad facilities in the territory covered b,
the lines Of the Brooklyn Rapid Transit Company
The Brooklyn Rapid Transit convertible pc
bonds the sale OF which cash is provided
for additions and betterments on the lines OF th
system, closed yesterday on the stock EXcheng
at S2l.. The mortgages executed in favor OF tn
ProokIvn Rapid Transit Company by the Set
. Beach Railway Company, the Canarsie Railroa
- Company and the South Brooklyn Railway Com
q pany. as noted in Mr. Meneelys statement, hay
amounted in the aggregate to about 100000, it
~ said. Assuming that that figure IS correct, an
that the proceeds Of practically all Of the S2S,lO3
BROOKLYN Rapid Transit bonds disposed or slno
piled purchasing from the constituent coInpa
MES their certificates Of Indebtedness lthe state
Tnent says that they have been mostly SO aT
pIied). il would appear that around Ss,0o0oO ha
been advanced TO the various other constituen
companies. 1t is not announced how large the eE
penditures TO date On account OF the Brookly