New-York tribune., 1909-03-26
ERIE OPINION PUBLIC
nECISION IS MODIFIED.
ct,set BeIie0es Road WI accept
Order and Issue Bonds.

many. March 25-The Public Service Commits
o. District, announced to-day the opinion
for commissioner Martin S. Decker. setting forth
Sa.,s and conclusions on which are based its
u -, and order approving the application OF the
pIuroad Company 10 Issue S3Oo00.00O & per cent
E1S E1.--I bonds The opinion lays down the follow
o.i.srsl rule which should govern the commits
Z :, cases Of capitalization:
= divisions OF the law regulating capitalize
- * off pubic service corporations are general IN
fs-.sses those presenting difficult conditions and
e-ssf1r necessity as well as those relating simply
g 2ts tnt for the acquisition CT property or for i'm
c@9yerlets by the sale OF oc1as which are market
sble q the law intends that the commission shall
fct &C., operating and traffic conditions pertaining
pAsssse Iroperty sought TO be charged with new
eAP+ss An be granted in those cases where the kind
y bonds The security upon which they are based.
frspostion Of proceeds the financial condition Of
- applicant its resources traffic and otherwise.
nd generally, the state OF Its property, such
- - me belief Of the commission. warrant GER
t;acano aLnoanosei bond issue is reasonably REQUIRED
Ins,ssosilv for one or more Of the purposes named
Re statute the basis OF future capitalization.
1,,ing to the matter directly involved In the ap-
-s.s,,on. The opinion OF Commissioner Decker
s-es and discusses at length the probable re-
-r-oes Of the Erie Railroad Company in connection
-. ,ts proposed execution Of the collateral trust
sssn+ure ard issue hereunder OF $50 01o.ono per
=, bonds On all the facts and conditions dis
se5 BY the investigation it is held that authority
:. ;ssue the proposed bonds according TO the plan
,ss should be granted. subject 10 conditions gen
.-sDv described as follows:
Consents TO the funding Of general lien and
,-vertible bond coupons accruing during the i've
years 6 N secaPsS to te eHen of 20 per cent
= .geh coupons Cor such less percentage as the
ee-.-riSson may hereafter designate upon salts
ss:sory showing by the Applicant prior 10 octo;
Ar- he
-ss-1-y norton Of the bonds TO be used for any
n2l-s -1osa ,IrtII sucb exchange shall have been
s-eomplished. and in case consents for the ex-
c1s1g 1g,sin | The tine fixed by the commission the
56aaoa s5s Sh should then stand as If denied with
snfhority 70 the applicant 70 present revised
= new Application IN accordance with the then
RE unissued notes heretofore authorized by
@ s5SgR g ma ay 0 oe aef Sfee1 tat ao de s4o PF'0
& The collateral indenture should be prepared
80 sbould contain such suitable covenants and
defeasanoe clauses as win render effective the re-
: such tndenture should provide for the ex-
penditure Of money from income Tor improve
inents specified during each seTni-annual period
when the funded interest viii accrue, or within
interest sccruing in that period, carrying any eX
cess Of money 50 EXPENDED over 10 the creqlt q
saeeeos esss5 70 the ,'s f nrooeeds OF any Of
The notes hereafter issued for funding any in
s5eoverents other than those specified in this
record may De made with such income upon spe-
S-oyi5s "a 4E that in case Of failure 10 50 expend
money for improvements during any calendar year
such purpose during period not less than three
laonths 70 be fixed by the commission
coupons and notes should be on the basis Of face
value E15hout premium or commission BUT IN IN
ssnts for such exchange should be permitted;
o-ier within thirty days.
Chairman Stevens and Commissioner Osborne dis
sss;, but file no opinion
rs formal order Of the upstate Public Service
Commission, made public on March 2, granting the
application Of the Erie Railroad Company for per-
mission 70 issue S00ooOo0 per cent collateral gold
bones. modified the original order Of February in
extending from August until October or later
TIE period within which the consent Of the holders
Of % per cent Of the general lien and convertible
bonds 70 The funding Of the coupons aeeruing On
those bonds during the next FIVE years must be Sc
cured and denied the request Of the company that
the orer be changed TO require the consent OF only
g per cent Of the bonds In the opinion handed
down yesterday. supplementing the order Of March
9 ths commission makes the important modification
that the required consents shall be 80 per cent or
such less percentage as the commission may mere
after designate upon satisfactory showing by the
spplicant' change which II is believed in Wall
Street VIII assure the acceptance Of the order oy
tie Erie and the Issuance Of the bonds.
The Erie Railroad Company issued yesterday
morning before the publication Of the commissions
opinion the following official statement;
No action has been taken by the Erie company
with respect the acceptance or non-acceptanee OF
the conditions imposed by the Public Service COM
mission In connection with the granting OF
authority 20 issue bonds The precise nature ana
effect Of the restrictions will not be known until
the commission has passed on the form OF the coli
lateral indenturs covering the proposed bond
issue The company will submit the form Of such
tDdenture for the approval Of the commission, ana
4 Is expected that II will be passed upon within
few days. The company will then be bic TO de-
ternine whether Il can accept the terms and re-
O. the trust fndenture.
The Erie issues were strong yesterday, the com
mon stock making e net gain Of IL points, the
first preferred ~ and the second preferred 12s-