New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1913-09-06


ten years has been rotten" he said
The alta * was directed particularly
against the 70. u-tion of an under
writing syndicate to take the bond is-
sue. with j. +. Morgan & Co. at the
head and the .irst National Bank and
the National City Bank the other large
members. The under writing syndicate
was to receive . per Get Of the total
issue and ]. p. Morgan & co. were, to
get p of l per cent for acting as
bankers.
One OF the directors is going 10
make a profit out Of the SALE Mr..
Buckley objected.
Bonds Not ssIable.
Mr.. Morgan explained that in the
present condition OF the market 1t was
doubtful if the bond issue could be
fioated if the whole amount was offered
for stock subscription. The bonds were
TO be offered to stockholders at par, at
the ratio of one bond 10 every three
shares of, stock. These terms and the
high rate of interest were compared adj
versely by the minority stockholders
with a sale of S30,000000 convertible
bonds in 1906 at 3i2 per cent.
Before the issue can be floated the
various public service commissions of
Massachusetts. Connecticut and New
York must approve the issue. hear
ing is TO be held in Boston next Tues
day on the proposal, and Howard FL
lott and Z. D. Robbins will appear be-
fore the Massachusetts board TO urge
the authorization CT the issue.
In detailed schedule filed with the
Massachusetts Pubic Service Commits
sion yesterday were shown items of a
floating debt Of S40023, $50, B.. funded
debt TO be paid with proceeds of con-
vertible debentures of 1913 amounting
TO $4,000. 900, equipment purchased ant
constituting present floating debt. SIG
So, $50 and cost Of improvements and
betterments of the New Haven and
controlled property. S1s,391, I44.
In his testimony before the Puio
committee in Washington last Deem
Der the late j. Pierpont Morgan re-
vealed the terms of the fiscal agree
ment { which the letter Of j. p. Nor
gan Co. r-ferred. in return for the
authority to act "a sole fiscal agents
for the New Haven the Morgan firm
agreed to loan the road 80 per cent Of
the c~reed cale price of it securities
and to give the -oa' the benefit Of
counsel and advice" This agreement
and a similar one with the New York
Central lines were the only written
agreements the Morgan firm had with
any of the corporations for which it
acted as fiscal agents, Mr.. Morgan tes-
tilted.
The agreement with the New Haven
company was made on December 10.
1910. me with the Boston & Maine,
a subsidiary, was made on December
IS, 1919, and the one with the Maine
Central was made on January II.
1911
You must remember" said the elder
Morgan at the time of the money
trust" investigation, that all securi-
ties sold and issued are not always
good, and when there is a responsible
fiscal cent there is moral strength
behind them"
Since the New York, New Haven &
Hartford has been classed as a Nor
gan" road. however. many Of the mi
IN oil nd
those owning from five to one hundred
shares Of stock, have not felt that the
guarantee of a strong banking house
behind their securities. coupled with
policy of monopoly and expansion,
has benefited their incomes from the
stock and bonds; and it was partly be-
cause of the dissatisfaction at the
widespread purchase of every possible
competitor that Charles S. Mellen was
practically forced by the strong opin-
ion to resign.
They remember that before the elder
Morgan brought Mr.. Me!len East from
the presidency of The Northern Pacific
the New Haven road, in which almost
every farmer had an interest, was pay
ing 10 per cent dividends, while the
stock sold at over 200 Now a deficit
after dividends Of 8 per cent have been
paid is shown in the angual income ac-
count.
At the executive meeting yesterday
Howard Elliott stated that without
knowledge of recent resolutions passed
by the executive committee calling for
the installation of the best signal and
safety devices, he had ordered the
prosecution Of the installation of sig
nails between New Haven and Spring
field The executive committee APP
proved the expenditure OF $3.50, 600 for
the purpose.
New Haven. Sept 5.-James S. Hem
ingway, Of the directorate of the New
Haven Railroad was asked tonight to
discuss the withdrawal of the Morgan
firm as fiscal agents for the road.
As a member Of the directors exec,
utive committee he was present at to-
days meeting. He said:
THE announcement was complete
surprise to me when it was read at to-
days meeting in New York City. had
no idea that it was contemplated, al
though OF course. the road or the firm
had a perfect right 10 withdraw from
The agreement If either wished. The