Connecticut western news., 1909-08-19
[, N. [. APPLICATION
 WAS REJECTED
BY THE NEW YORK COMMISSION
Proposed Bond Issue Scheme Said to Have Possessed Peculiar Features Commissions Reasons for Re- fusing the Company's Request.

tusing the Company's Request.
 The New York public service com mission, second district, has denied the application of the Central New England Railroad Company for consent to execute a mortgage for SEQ, 900, 900 upon its pro- perty and for authorization to issue bonds upon the security thereof to the amount of $12 ,010,000. The application submitted was the financial organization plan of the New York, New Haven & Hartford Railroad Company for this property.
 The Central New England Railway Company has outstanding common stock s4,so0,ooo, preferred stock $s,- 75o,O0o, total $s,55O,0o0. Of this stock the New York, New Haven & Hartford Railroad Company owns common B. 15,395.3s, preferred S3.4l0. .37650, total S7.S25, ,771.Ss. The New Haven company
 by reason of such stock ownership
 practically owns and controls the Central New England company. The Central New England company, has outstanding funded and other indebted
 ness, the principal of which amounts to
 S12.320, ,500. Of this indebtedness the
 New Haven company holds S9, ,9S9, 123. 20 and third parties &, 1881, ,376.7i. Among such indebtedness are certain general
 mortgage income bonds amounting to s7,250,000 of which the New Haven company owns SC, 3e9, 125.29 and other parties S920, ,s76.7l. These bonds have
 been outstanding ten years and no interest has eyer been paid thereon.
 ~ Another issue of income bonds for which the Central New England Com pany is liable and which has been out standing since 1887 and upon which no interest has eyer been paid amounts to Sl 164, ,500 of which the New Haven company owns Sl,164,000 and other parties $500. It is proposed to issue interest bearing bonds bearing per cent in the place of the income bonds owned by the New Haven company except said company proposed not to exchange about $l ,000,00 of its income bonds for intsrest-bearing bonds at this time. Certain of the outstanding bonds which applicant desires to refund have unpaid interest coupons attached to them amounting to $403,2s3 33. Interest on these coupons from their due date is claimed to amount to Sl81 ,377.54. All of these bonds and attached coupons are owned by the New Haven company and the applicant asks authorization to issue it's interest-bearing bonds for the amount of the unpaid coupons and the interest thereon to the amount of $534, ,660.S7. The proposed mortgage, while ostensibly drawn to refund all the outstanding indebtedness of the applicant, is SO drawn that no bonds can be issued by the trustee to refund outstanding bonds unless such outstanding bonds are pre- sented by either the applicant or the New Haven company. This means the New Haven company only in practical effect since it wholly controls the applicant. The amount of bonds owned by others which can not be refunded as of right is $2,33l ,376.7l.
 In making its decision, the commission in a detailed opinion written by Chair man Stevens held: That the appli- cant is not legally indebted for the. intspest upon the unpaid coupons. 2-That no sufficient reason has been shown why unpaid interest should be made a capital obligation of the ap- plicant. 3-That a refundinE scheme which embraces the securities held by only a creditor and that creditor in control of the applicant through stock ownership can not be approved. A. That under all the circumstances of the case the conversion of tho income bonds held by tho New Haven company into fixed rate interest bearing bonds cannot be approved.
 The last paragraph of the opinion recites that the commission is willing to consider and approve any reasonable plan for the readjustmsnt of the Home- what complicated financial situation of the applicant, but the one submitted possesses features so peculiar that approval cannot be extended to it.