The sun., 1909-02-14
ERIE May ISSUE ITS BONDS
But ONLY on TERMS LAID
down BY r. s. BOARD.

Apart From Funding OF Certain NOte'
Nesy a3O. 900 .OOO Issue Must Go Into
Jmproyemen ents - Decision Jpholis Sc
eurIty for the Proposed Financing
ALBANY, Feb. is.-The upstate Public
Services Commission has granted au'
taority for an issue OF ts0.0Oo,oO0 s pei
cent collateral thirty year bonds Of the
Erie Railroad. Application for the issue
was made by the railroad company last
November, and the commission has put
moro time on It than on any other matter
that has come before It, for the applica'
tim raised points that were new In rail-
rvad financing.
Authority to issue the bonds was ac'
corded by a divided vote. with Commits
sioners Decker. Sague and Olmstec
m the affirmative and Chairman Stevens
and Commissioner Osborne In the mega
tive. While a majority Of the Com
missioners approved the issue Of the
bonds they did not grant the application
as made by the company, but imposed
restrictions not embodied in the applica'
ton. The most important OF these re.
strictions is that all Of the money realized
from the sale OF that portion OF the bondt
70 be sold after August 1 must be ao-
counted for in expenditures for actua
improvements. as contrasted with ex.
penditures for maintenance. operation
or old indebtedness.
The conditions are as follows:
First-That collateral trust indenture
shall be prepared and submitted for ap'
proyAl by the commission.
Second-That an equal amount OF the
bonds may be exchanged for coupons fall
ing due during the period from January 1.
1909. TO January |. 1918. upon the Erie COM
pany's general lien and conv ertible = pei
cent. bonds to the amount of $ll, $50, 900
provided that the exchange shall be upon
the basis OF par value Of bonds Tor face
value OF the coupons. without payment
OF prem ium or commission by the CON-
pany, and that an exchange OF such bonds
Tor such coupons shall be effected for
not less than 90 per cent OF said coupons
20 the amount OF Sll $50 900 before August
D. 1909 and II such exchange shall not he
Erected before august 1. 1909. and before
sny Of the remaining bonds now author
ked shall be issued or used. the whele
order shall cease to be effective or In
force.
,Third--That the company shalt set
aside and expend from income every six
uOniItb LOT improvements duu duultlOlls
TO the property. as pcr the schedule OF
improvements and additions filed in tho
case. an amount equal TO the interest so
refunded which has accrued during such
period Of SIX months. and that this shall
continue during the five year period
covered BY the interest coupons 80 re-
funded
The intent is that this extension and
funding Of interest shall be fully covered
by improvements and additions to the
railroad property at the end OF the five
Years This provision also applies TO
notes hereafter used to fund any interest
obligationrof the company prior to August
J, 1909, II such notes are exchanged for
the bonds authorized. The notes referred
to are those authorized by the commisSio on
in It's order Of March 81. 1908
Fourth--That II such amount. equal
to the accrued interest refunded. shall
not be so expended for improvements
or additions in the manner and within
the time specified. the difference between
the amount OF interest accrued which
has been refunded by exchange Of bonds