Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1912-04-04
Public Service Commission For.
bids Buying Ontario & Wes-
tern Of New Haven.
of New Haven to Buy
Control of Rutland Railroad
Remains to Be Decided
Financing Checked.

road company to acquire majority of
the stock Of the New York. Ontario &c
Western Railroad company was denied
to-day by the public service commission.
The majority stock Is now owned by the
New York, New Haven &c Hartford Rail
road company. There is pending before
the commission an application OF the New
Haven for permission to acquire a ma
iority Of the stock OF the Rutland Rail-
road company. now owned by the New
York Central The applications were
opposed by the minority stockholders OF
the Ontario y Western and the Rutland
The New York Central contended that
the acquisition Of the Ontario & Western
would give II an entrance into The
anthra cite coal fields Of Pennsylvania as
we'll ms additional facilities for trans
portation out of New York city. The re,-
sons for tho denial as given nv the com.
mission are:
mo transfer Of a bare majority interest
from the New Haven to the Central
should he permitted without reasonably
guarding the minority from possible op-
preston by the majority interest. No
means are apparent by which this can
he done except by imposing as a condi-
ton OF the authorization that the Central
shall take over such of the minority stock
's may be offered it upon the same terms
per share az it pays tho New Haven IF
the minority stockholders awaited them
selves of this privilege. ~ would make q
purchase price 10 be- paid 10y the Central
OF substantially 500. NO. mo and involve an
| annual fixed charge for interest OF sub
stantially sl.!500oo
UNWILLING TO IMPOSE BURDEN.
1.-The commission is unwilling to impose
this burden upon the Central and has had
its attention called to no advantage which
In its Judgment would compensate for the
| disadvantages involved in such an invest
ment.
THE continued successful development
| Of the capabilities of the Ontario Il West
ern requires close attention to and care
| ful study of traffic, operating and fnan-
cial conditions.
1T Is the clear Judgment of the
commission that the energies of the
Central and its credit and resources
| of every nature should properly be
devoted to the public duties and bur
| dens with which It is now charged
ard to the urgently demanded solution
Of the numerous and complicated prob
lens pressing upon 1t in connection
with the proper growth and develop
ment of It's existing properties"
The New Haven owns 20 shares of
the preferred stock and 2al 900 shares
of tho common stock Of the Ontario
& Western while the Central owns
only 10 shares of the preferred stock.
The Central asked for authorization
to purchase all Of the stock owned by
the New Haven. agreeing to paw s1s.-
1oS,397.so by issuing It's 5o-year de-
benture bonds for that amount bear
ing s5s3.332 interest payable annually
BARE MAJORITY OWNED.
| The commission calls attention to the
fact that the New Haven owns a bar,
majority of the total stock issued. name
ly. s2olo+.Do as against a minority in.
terest Of ss.'53oS3, the difference being
only s-l0or,.
In deciding the case the conrnissio,
says that IT took into consideration tn,
protection of the rights of minority stock
holders. the control Of n comparatively
small railroad by great system which
is to some extent competitive and which
has 20 some extent intimate traffic rea
lions with it, possible elimination of com
petition by the practical control and alb
sorption OF the competing line. and tn
effect upon the central itself. which ma,
be anticipated from tho assumption o
new responsibilities and liabilities.
EFFECT ON THE NEW HAVEN.
New Haven. Conn, April 9Th
,., % ba
e. Hartford railroads sale of the on
tario a. Western control to the Ney
, York Central will have some effect o
the future financing of the New HAY
en- company. Under the terms Of tn
proposed sale the New Haven corpor
alton would have received from III
, New York Central for the controlling
Ontario & Western shares, the sum o
/, sl3.lOS.397 In a single four per cent
long time debenture of the purchasin,
, corporation. The debenture coul
have made the basis of collatera
trust loan sub divided and sold 10
, about the same amount of cash. Tn
291, $50 shares representing Ontario
Western control now remain in tn
treasury OF the New Haven corpora
= ton. subject TO the earning of divi
= dends practically guaranteed by tn
= New York Central In the form OF in
terest on the purchase debenture bono
Another effect OF the failure of the sal
relates to the future extension fror
y White Plains. y. v. northward, Of tn
New York. West Chester g. Boston lin,
In his last annual report referring TO thi
d extension President Melien OF the Ne,
: Haven company called attention TO N
II value Of its future connection via Il,
" Poughkcepsic bridge system with III
Ontario e. Western and prosprctiy
" facilities for the delivery of all rail 60,
1t borough of the Bronx. The northwar
4. extension of the New York. West Chest,
g. & Boston was approved by committt
4. of the New EaVen directors, but was he
IN allegiance while the sale OF tho Ontar
& Western to the New York Central wa
H. pending before tho commission. tt
s. failure of the sale now almost necessari
1t revlves the New York. West Chester
10 Boston extension plan.
y The sale of the control OF the Rutlar
ID railroad by the New York Central to Il
20 New Haven was arranged for at Il
same time as the Ontario & Western -
| and Is Stil before the New York con
n mission for approval or rejection. Pres
dent Mellen has heretofore denied tn,