New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-10-15
S7,552,OOO NEW HAVEN
BOND ISSUE SANCTIONED.
u,bIic Service Commission Dis
; approves, However, OF Un-
derwriting Cost.
MINORITY REPORT FILED
,.,rce w. Anderson Contends
Permission Granted by
Fellow Members
Is Illegal.

,..,on Oct. 1.-THE Public Service
-.,ss,on to-day approved the proposed
VN ~ se7.552,000 of per cent con-
.c,, adventure bonds by the New York,
"w Haven & Hartford Railroad Com
any .A,oA oro,,.o,
-. Ds,,tion Of the company in every par
80 was signed by four members.
r..1.riek J. Macleod, chairman; Everett
GONE Clifton White and George II.
%.,op One member. George w. Ander-
sissented, and filed a lengthy mi
.I,v report, saying: II am unable to
s.,Ircs myself that the order voted by
y. ,s,ority Of the commission is not on
'. last three grounds. illegal and void"
oy IFS approval the commission makes
. ,ossibie for the New Haven road to
s,,a us floating debt amounting to s4O,-
,,s7se TO pay 100000 Of the funded
,,bt and TO provide money for new equip
-.pi and for improvements.
Calling attention Ito the contracts made
,y The company for the payment Of GER
ain charges and expenses amounting TO
80, s1ss0.oOO for the underwriting of
"a. ,ssue" the commission In its report
.r. "while this transaction is not d.
...tv involved in the present case. as the
..,nany has not requested the commission
!. csp,talize these charges. but proposes
:, defray the same out Of earnings or IN
,one other way. we believe 1t Is our DUTY
a ,,press the view that an arrangement
!, This kind. entered into between the
..-,sny and one OF its directors, is not
!. accord with ethical standards or sound
rsic policy"
adverse Action Hazardous"
m, commission discussed the effect
et adverse action on the petition might
sy. had on the company by forcing II
"a the hazard Of negotiating within the
,,,, few weeks short time notes for siO'
w0o or $4,000, 0OO." and then said;
The placing of the company's finances
20, a stable basis is. in our judgment
4, essential prerequisite to the improve
r,rts in transportation conditions which
a, 50 urgently demanded by the pubic
,,a for which we are disposed TO look
Aopefully toward the new management OIL
d, company, IL II Is given a reasonable
0,,ortunity 20 work out a constructive
Nan for the rehabilitation Of the ran
oad properties"
lf,er quoting from the recent report Vi
=, Interstate Commerce Commission 10
!. effect that the New England rail-
i ad situation needs rest, an opportunity
~ constructive work and public support
" Public Service Commissions report
c.tinues:
/ The sins and shortcomings OF the com
sny IN the past have brought about their
an retribution. The company mas re-
.yed a stern admonition that II cahho'
,,ocs.d IN defiance OF law and pubic
co,icy without the risk Of disaster we
belieye that this lesson will be needed ana
that further recrimination upon the con-
duct Of the company in the past can serve
N useful purpose, but, on the contrary Is
likely 10 increase the losses. already sur
aesntly heavy, sustained by innocent
stockholders. and TO impair still furtner
III, transportation facilities so vital 10
II. business prosperity of the state
New Haven Better Disposed.
The fact that this company, in the pc
tton now before us. has for the first time
admitted itself TO the adjudication OF
Massachusetts, tribunal. in so far as relates
. 10 iu capitalization and general hnancial
| Affairs may perhaps be taken as a happy
. Ngury for a better era, in which the
@npany and the public will work to-
. other in friendly cooperation under the
hs in order to bring about the improve
nsnts 80 urgently needed in the railroad
Abilities OF the commonwealth"
In considering some OF the legal ques-
Ions involved the report says:
Tho claim has been made that the cap
al stock Of the company is limited to
as amount validated by Chapter e52 OF
es Acts Of 1910, and that for purposes or
ne present case all ttock issued by the
company since the passage of that act
INST be disregarded. With this view OF
as law we do not find ourselves In &C
erd. In our Judgment the capital stock
the company actually paid in WITHIN
~ meaning OF said section is sufficient
mount to warrant the proposed issue
asends."
% the question OF whether convertible
e'<ntures are legal r. this state the com
skson saws:
While securities OF railroad companies
L this form have frequently been ap-
Fosea by the Public Service commissions
auher states and are a recognized and
sOlsr form OF investment, the statutes
1ns Commonwealth contain no SPECIFIC
SAority for or prohibition Of an issue
convertible bonds CT debentures. 1t Is
S'asible. therefore, until the law Is
ne more specific or the courts have
pasn, r the commission TO pass au-
"nAtively upon this important legal
'ssuon. The petition before us, how
va eompels us to answer this question
'''oing TO our best judgment
Stock Issue Authorized.
having H. mind all considerations
'unent 10 the case before US. we are
mVsed TO approve an issu 81 cr.vert-
Noentures for the amount set forth IN
petition and &c Authorize an issue or
Vuralent amount Of stock at pr ~
issued In exchange for such debent' es
-seeordance with the terms thereof.
Tar as questions of law are in
,,' The commission has no desire TO
s.np' to arrogate to itself the function
e.s 0ourt by including in this order an
s'e opinion upon the many perplex-
~ - legal questions which we have been
SEQ to decide in this case"