The sun. [volume] (New York [N.Y.]) 1833-1916, 1913-09-11
Leads Minority Stockholders
Battle Against $167, ,OOO,-
600 Bond Issue.
MORGAN EXPLAINS PLAN
Consolidation With Lake shore
and Michigan Southern
Is Defended.

WARRINGTON, Sept 1o--ln q hearing
before the Interstate Commerce Com
mission considerable light was thrown
to-day upon the proposed consolidation Of
the New York Central and the lake shore
and Michigan Southern railways. One
Of the interesting Developments was the
making public Of J. p. Morgan's explana-
ton Of the financing Of the proposed con-
solidation. Mr.. Morgan appeared quietly
before the commission yesterday and II
was not known until to-day that he had
testified.
The inquiry by the committee Is being
made at the direction Of resolution
adopted several weeks ago by the Senate.
The resolution was introduced by Senator
Norris of Nebraska. and It calls for all
the facts and circumstances connected
with the proposed issue by the New York
Central OF per cent. mortgage bonds
amounting to 31s7.10:.40o. These +s
were to be used to take up outstanding
81, per cent bonds now existing against
the New York Central and the stock OF
the Lake Shore and Michigan Southern
Railway
Senator Norris's curiosity was aroused
over this bond issue and he asked the
commission to ascertain why the New
York Central was willing to increase its
hxed charges by about $540.OO0 a year
through this financing. 1t was apparent
that the Nebraska Senator had an idea
that the proposed refunding Of bonds In
volved some big consolidation not dis
closed on the surface.
Nj. Mosgan's TAstinoay.
J p. Morgan's testimony before the
commission was brief. He said It was
essential that the proposed bond issue
go through. ~ the financing Of either the
Lake Shore or the New York Central
could not 90 on piecemeal forever. He
added that by the issuing Of one bond
secured by a general mortgage Of the
combined systems there will be evolved a
security which In q short time will be-
come recognised as a general system Sc
curity and moro or less standard-one, In
fact In which the people will have more
confidence than they would have In mort
sage bonds Of smaller system.
Another feature Of interest In to-day's
proceedings was the bobbing up Of the
name OF c. II. Venner as one OF the New
York Central minority stockholders who
are protesting against the proposed plan
Of reorganization. Mr.. venner has gained
considerable fame through litigation
against corporations In the capacity Of .
minority stOckholder. J. Aspinwall Hodge
Of New York appeared ~ counsel before
the commission for dissenting stockhold-
era Mr.. Hodge has represented venner
as counsel In q number Of such suits.
Whether or not Mr.. Vennef or other
dissenting stockholders had anything to
do with Senator Norris Introduction Of
the resolution Of inquiry has not been
learned Mr. Venner and the minority
stockholders with him seem to be the
only persons opposing the reorganisation.
what the Brief says.
brief filed on behalf Of the New
York Central says that with the consent
Of the stockholders OF the two companies
and when the required authorization BY
public authorities shall have been given.
II is proposed to consolidate the New
York Central. the Lake Shore and Michi.
Ean Southern. and certain other New
York Central lines west Of Buffalo. The
brief adds that there 10. however. no In.
tention Of including the Michigan Central
In such consolidation.
Albert II. HarriA representing the New
York Central. told the commission that
no definite plan had yet been made for
me consolidation. and that It had not
been determined what roads would be
included
MI Hodge. representing dissenting
stockholders contendsd that the proposed
consolidation. or at least the development
OF the merging Of the New York Central
with the Lake Shore would violate the
sherman antitrust law as Interpreted In
me Supreme Courts decision In the
Northern Securities case.
Mr. Harris fatly denied the statements
oi Nr Hodge In regard to violations
" 'h- Sherman law. but he seemed to
'!ltk 1t possible that the Government
ai'er the consolidation might raise the
question whether or not the consolidated
company could hold q controlling interest
On the stock Of the Michigan Central.
Deates A.y Restraint.
Harris said: "A consolidation Of
'ne New York Central and the Lake
'No'" Viii not subject commerce between
'ns states to restraint. The roads Of the
wv" companies connect at Buffalo and to-
se'her form . continuous through route
pe'"eeu New York and Chicago. The
ous'H''s which they now do 10 not com.
peU''Ee' each server its own separate
Nfr'ory and each delivers through ship
men's to the other.
aen these companies shail have been
VOnS(l,1lteh Nkx.n A. -
inc ornion that the public interest 70.
qul'' II TO do SOD raise the question
"n.'A' the consolidated company can
Nblu A cpptrnlllpu lnt~ ln H.