New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1911-06-10
REVIEW THIRD AVE. PLAN

MV|lW lnINU HvC. TlHIN
Continued from hrat mage
10 per cent Of principal and 10 per cent
IN payment Of interest due; the 500. 1886
600 new per cent income bonds. repre-
senting GO per cent OF their principal.
and S939O.OOO. or q per cent. in new
stocks. The stockholders on payment Of
the S45 share cash assessment would
get 40 per cent in new refunding per
cent bonds and Is per cent in new stock.
A long series Of hearings, beginning in
January and continuing until July, was
held by the Public Service Commission
Cor the consideration Of this plan. and on
August . the commission handed down
decision rejecting the proposal Of the
bondhoiders' committee. on the ground
that the proposed capitalization was not
justified by the value Of the property
and that il was not within the earning
power Of the property. The committee
In October applied for a renearing which
was refused. and William y. Guthrie
counsel for the committee, then took an
appeal to the Appellate Division. the
Judgment Of which. reversing the Public
Service Commission, has just been
handed down.
Justice Clarke said in the decision OF
the court that the main question in
volved in the controversy had never been
considered by any court. II was the as
sumption Of the Public Service Commits
sion that II had the power to determine
the details Of the reorganization plan
and the amount Of stocks and bonds 70
he issued in order TO carry it out; FUR
Their. that the wishes. views and inter-
tsts Of the purchasers, the bondholders
and stockholders. crystallized in their
plan, and on The faith of which the pur-
chase was made and confirmed by the
rourt, are Of no effect whatever, anu
that IL has the power to regulate these
details.
REORGANIZATION Law in Force.
argued that the reorganization statute
had been repealed by the Public service
Commission act--not directly, but I'M
pliedly. Justice Clarke held that the
statute is still in force. saving: Repeats
by implication are not favored by the
courts, and unless the provisions or the
two acts are so inconsistent that they
cannot both exist side by side repeal
of the earlier one by the latter should
not be declared If the statute has been
repealed, then ! know Of no statute
under which a reorganization of rail-
road can he had. Certainly there are no
provisions of the Public Service act
which can he availed Of. | cannot con-
vince myself that the Legislature acct
dentally. indirectly and unwitting.y
would so reverse and destroy the long
established public policy of the state in
respect TO the reorganization of rail-
roads"
The court then tells what the Public
Service Commission can do within its
power. and calls attention to the fact
that that body cannot pass upon the pla n
Of reorganization.
1T was none of their concern" said
the court, "as to whether or not the COM
pany had made good or bad bar
gain"
Whether the case may be taken to the
Court Of Appeals by the Public Service
Commission will depend upon the nature
of the order entered by the Appellate
Division. The opinion of the court was
handed down yesterday, and the order
will be entered after three days notice
to the parties in interest.
How Appeal May Be Taken. ,u
If the order should be final, that is
aimed directly at the validity of the de-
cision of the Public Service Commission
in refusing to approve the reorganization
plan, an appeal may be taken. but II the
court merely orders the commission to
see that the railroad company carries
out the plan Of reorganization according
to the proper legal steps provided by
the blU eldtS 'cl p'I diI'I Jaw, Dis lllJl-
Gated by the opinion. no appeal can he
taken.
In discussing the courts opinion. 2
lawyer closely connected with the case
said last night:
THE court appears To hold that the
old state corporation law is in force and
the old methods continue for the reor-
ganiza ton Of railroad corporations Ir
that case. all that remains for the Public
Service Commission to do is to see tina,
the company has taken the proper lega
steps Of reorganization. II would have
the effect of taking away from the COM
mission any power to determine the
amount of bonds or stock. or their dis
tribution on the part of the reorganiz-
ing company.
Under this ruling the only effect the
public service act would seem to have
is 10 add another requirement In the
plan of reorganization Of railroad com
panies. The commission cannot change
the plan, but merely has to see that the
steps have been legally taken by thu
company under the old corporation law
1t was said that IT was unlikely that
the final order Of the court would fur
nish grounds for an appeal.
Whtridae Becomes Receiver.
The Third Avenue Railroad Company
was placed in the hands Of Frederick "
Whitridze. as receiver. on January g
1905 upon the application Of the Contra
Trust Company, trustee of the first con-
solidated mortgage 1t had been through