New-York tribune., 1908-07-10
BOND ISSUE APPROVED.
Pabhc SefUice Commission Grants
duplication of DeIascare & Hudson.

Inc Public Service Commission for the I'd Dis
'ie' announced yesterday in opinion by Com
missioner Martin s Decker its decision on the ap-
phcation Of the Delaware & Hudson company for
leave to execute mortgage for $50 ooo 600 uoatur-
ing In 1913, and issue s2e 500 600 bonds there
uhoer- Inc Delaware & Hudson sought to refund
pfacucalIy all of its existing obligations including
1lree existing mortgages one for IS coo 600 ,pon
It's property, one for $1,000 600 upon the Adiron-
oack Railway. merged with the Delaware &
1uoSoh properties. and one for 100000 upon the
Schenectady d Duanesburg Railroad, which has also
peen merged with the Delaware & Hudson proper
les ana also including its outstanding notes.
ling s1s.137,5O
Ihese embrace note issues the proceeds of which
were used in acquiring seventy-ve thousand shares
OF the stock of the United Traction Company to
me amount of S4.6e5.295 IS. stock and bonds of
the Troy & New England Railway Company to the
amount of s230.S6S ~. and advances made to the
hudson Coal Company "a coal corporation sub
sdiary TO the Delaware & Hudson cou1pany)
amounting to S2.500O00.
These items dsalowed upon the present ap-
phcauon the commission holding that proof has
oeen presented showing that they are proper sub
Jects Tor capitalization under the mortgage upon
the Delaware Hudson company railroad proper-
ties. and, without expressing any present opinion
upon the question of their capitalization states they
matters which may he brought nm IN q r,,bee
quent application.
Commissioner Decker holds that the same test
must be applied in cases where sought to issue
ponds to refund or discharge existing note obliga-
n
bonos tc acquire property, to construct an add-
tonal line or to make improvements generally and
that test is whether the particular matter is a
proper subject of capitalization.
The opinion goes state that taking into
consideration the large earning power of the rail-
way properties owned controlled by the Della
ware Hudson Company and the excellent fnan-
cial condition Of that company the minimum net
price for the bonds now authorized for immediate
sale and application the discharge of the note
NOT he
the par value 4 per cent interest basis, and
that they should under normal conditions find
ready sale at above par.
Advances Of money made by the applicant to
companies holding the nominal title of roads lying
in Canada which are TO all intents and purposes
important extensions of the applicants line and
which advances were used for the purpose of con-
structing the Canadian roads and in return for
which the applicant received certificates of indebt
edness of one of the Canadian companies it being
its purpose TO merge both the Canadian companies
when construction is completed, the commission
holds to constitute in effect the purchase price of
the certificates of Indebtedness of the Canadian
companies that the purchase of such certificates of
Indebtedness the acquisition of property.
purpose which the provides that capital
may be secured, and that under the circumstances
of this case which include the full ownership by
the applicant of the stock of both Canadian COM
panes, a bond issue covering note issues used to
purchase the debt certificates should be approved.
A first and refunding mortgage covering the ap-
plicant's owned and leased railway properties and
trackage rights over various lines for an amount
limited S50,ec000o. to become due in 1s43 Is ap-
proved by the commission subject to prescribed
Limitation of bond issues.
The applicant is authorized to issue under such
mortgage bonds 10 the amount of S650oGOO bearing
not to exceed per cent interest for the sole pur-
pose of retiring outstanding bonds under the three
existing mortgages the terms and conditions Tor
exchange of the new bonds for underlying bonds or
for the sale Of any of the new bonds TO purchase
any of the underlying to be first submitted to the
commission for approval, provided that such ex-
change may be made par for par, without pay
-,o~+ of anv nrenli1Im on the old bonds by the
annlicant from its treasury, at any time without
such approval.
An issue of bonds under such mortgage to the
amount of SIS $4,000 covering certain existing note
obligations of the applicant aggregatng Sl2O44ooo -
"a a. allowance of not than per cent
os tba mar value Of such bonds for the purposes
Of sale is also approved