New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1912-02-04
P.S. c. RETAINS CONTROL
OVER BOND ISSUES.
Issues Order Making Condition
for Sd Ave. Co. Mortgages,
Which 1t Approves.
S25,OOO,OOO SINKING FUND
Opinion Says Systems Assets
Are S44,046,637; Liabilities
S73,626,744, and criti-
cises F. w. Whitridge.

The Public Service Commission, which
on January II approved the plan of re-
organization of the Third Avenue Rail-
road Company, now superseded by the
Third Avenue Railway Company IN
obedience TO the mandate of the Court
of Appeals adopted two orders yester-
day that will prove the commission has
certain control over the issue of secu-
rites by reorganized companies, unless
its action is revised in court. The de-
cision in question was at first supposed
to take away entirely the powers OF the
Public Service Commission i'll this re-
spect.
One order approving two mortgages
and one providing that special fund
must be established, to he accumulated
until il amounted 10 S25,OOOOOO, to be
used only for the purchase and retire
ment of the mortgage bonds of the COM
psny. or for the acquisition of property
for capital or investment purposes were
adopted.
This sum, S25.OO0000. was in round
figures, the excess of the securities
which the court required the commission
10 authorize over and above the valua-
ton of the property of the company
made by the commissions engineers
while the plan of reorganization was
being considered.
The work of appraising the property
occupied corps Of engineers many
ln nj
total S54,916,000, of which $15.790.000
will he in refunding mortgage fifty-year
per cent bonds. Sd, J36 adjustment
mortgage income bonds and l6,590.00O
capital stock.
The order for the establishment of a
special fund to be used in squeezing out
what the commission believed TO he
water" in this capitalization required
that not less than 100000 year should
be paid into a special amortization fund,
plus per cent each year upon all previ-
Gus payments, until S25.O00,N00 be ac-
cumuIated. which, at the rate stated,
would take about forty-eight years.
Until the fund should have accumu-
lated it was provided that no interest
should be paid on the adjustment income
bonds nor any dividends on the capital
stock
Another and strictly separate fund
must also he maintained for the usual
purposes described as maintenance, de-
probation and renewals. The order re-
quired that this should he at least ~
per cent Of gross operating revenues.
The refunding mortgage approved pro-
vided for the issue, ultimately, of $40
100000 i'm bonds. while the adjustment
income mortgage provided only for the
precise amount of bonds already author
lied, S22.536,OOO.
In an opinion accompanying the orders
the commission pointed out that the COM
the Third Avenue System TO be approx
mately 81? 626, IA "a, and the assets
only SD. 046. 637 ~.
The commission said Frederick w.
Whtridge formerly the receiver and
now president Of tho company. who had
on innumerable occasions severely criti-
.cised the commission, once testified thar
the annual depreciation amounted I,
S600,OOO. in a case in which it was the
object Of the company to show small
earnings, and on another occasion when
the object was to show large earnings, he
testified it was only 100000.