The Bridgeport evening farmer., 1909-08-16
DENIES HANEN'S PEAN ANF0RagEN pB0WS
strafNewa EsxiaBds Scheme Declared ts be Peculiarsb by;PnbIic Ser.
 yice Board
sl,,,ls.ses TISSUE ] SOUGHT

Askany. .s.Aug.S16.-Charging that the .,oer York New Haven & Hartford Rnxlroad- company was endeavoring to ruAs out other sbondholders, than Itself Lerom the benefits of .thes plan for re- kundineathe debts ofsthe Central New Enxlanda Railway scompany. the Pub hic Service Commission in the Second Dasfrfet. has refused an application for tconsent to the saxecution of $2o.oO0- eooo .mortsageS on the slatters conpany's brouerty andath issuance of bonds kbsfeunaer Nufss GOO. This was the k1ew Haven's financial treorgantzation ! the commission points touts4HatA thel lNeW ork, New Haven & kE3a<tfordS Company owns d,S25,H1 Of khesss. .55o.ooo Of thepcapital stock which EAe sCenfral sNewF England has out ktandfng, and gsoScontrols the line. Of &he s12 32O 800 of fbondss which the com oanys has Issued tn her.HJew Haven holds Fes, ,sss; ;12s and soutsiderys S2,Ssl l,sss- kgeneral mortgage income bonds tamounting to $.250.o0o. of which the New Haven, Company owns $6,S29, ,123. kThese bonds have been outstanding [ten years and1 have paid no interest. tAnother issue Sof income bonds for (which the Central New England is tliabIe has beennoutstanding since 1887 land no interestHhas ever been paid. EThis issue amounts to $1,164 300, of (which the New@Haven company owns is1. 4oo0
 The commission explains that it is proposed to issue interest-bearing Fbonds bearingi4 per. cent, in the place fof the income bonds ' owned by the IHyew Haven: Company except that this Icompany eis 3not to exchange about $1,- loco, 600 off it's .lncomeS bonds for inter Iest-beafing* bonds. atSthis time. 9th Ter parties Shave no sright under the }proposed mortgage tos exchange their kincome bonds < for i ainterest-bearing fbonds.
 In addftionsto getting new bonds for iits old ones. saccording ato -sthe report kthe New Haven Scompany wanted also Ito get. new bonds on unpaid finterest f$13, SIT, which it claimed as interest Ion the amount. of the unpaid coupons, lthe whole amounting to .$534. 4.6eo.
 It is declared that the proposed mortgage. while, ostensib1y Rdrawn to Irefund all the outstanding indebted tness. is so drawn. that no. bonds can be issued by the trustee sunless they are presentedlAhy either ! the- Central New England sorf the. New Haven lCompany. This means the. New Haven Company only. in practical effect. since it wholly controls the other. The 1 amount of bonds owned by outsiders I which cannot be refunded as of right | is g, 331, ,376.71. 2.
 In making its decision the commits sion in a detailed opinion written by tChairInan Stevens held:
 1. That the applicant (the Cen traI New England) is not legally indebted for the interest upon the | unpaid coupons
 2. That no sufficient reason has been shown why unpaid interest should be made a capital ob1iga-
 tions of tEe applicant
 8. That refunding scheme
 which embraces the securities held by only creditor and that creditor in control of the applicant through ! stock ownership cannot be approv- ed
 f. That under -all the circum-
 stances of the case the. conversion
 of the income bonds held by the
 New Haven Company into fixed
 rate interest bearing bonds cannot
 be approved.
 The last paragraph of the opinion re-