The Bridgeport evening farmer., 1913-03-17
MYSTERY OF
new HAVEN
STOCK SLUMP
More Than Hundred
Millions Poorly In
vested
RunlOT of Boston & Maine
Passed Dividend StartIeS
Market
Especial to The Farmer)

Hartford, March 17-Intense interest
has been excited here by the Wan
street prediction that the dividend OF
the Boston & Maine railroad will be
passed, and the dividend Of the New
York, New Haven & Hartford rail-
road cut from eight down to six per-
cent. in October.
The stock of the New Haven COM
pany has been steadily dropping,
during some years. In 1906 the stock
was quoted at almost $500. 1t is today
slow on the market less than at $119
per share.
During all of this period the profits
steam road business have been stead
fly increasing. The steam road has
been doing a growing enormous, and
profitable business.
The question is as to the miraculous
system of finance by which the bus1-
show a deficit, so that it's dividend
may be cut, while it's stock decreases
by millions in value, although it's bus
iness has continuously increased.
The passage of a dividend on the
Boston & Maine would mean a fur
ther deficit in the revenue of the New
Haven, for the latter owns more than
$21, 100000 Of the common stock of the
Boston & Maine, and a passed divi-
dend would mean a loss of $S75,oOO to
the net income of the New Haven
company
But this in itself would be a mere
ite1ns in its effect upon the enormous
profits OF the New Haven company,
were 1t not that the New Haven COM
pany has issued more than a hundred
millions of its securities upon which
it must pay from four to eight per-
cent, for properties which turn into
the New Haven Golfers from nothing
to two or three per cent.
OF the Boston & Names dividend
situation, The Boston News Bureau
says:
.ewhile since Boston & Maine has
been paying 4 per cent, either re-
duction or passing of the dividend
would up until yesterday have oper-
ated to render its own bonds nOn-le-
gal for savings bank investne nent in
Massa chusetts, there has been no no
ticeable selling by the banks. This ie
a situation which speaks volumes for
the investment standing of Boston &
| Names debentures despite the in
creasing troubles of the road, and OF
course also reflected the anttcipa ion
of enactment into law of the bill CIV
| ing roads two years of grace in case
they should temporarily be unable to
fulfil reuirements. Thus, should BoS-
ton & Maine step out of the dividend
ranks this summer, the banks could
not invest in subsequent issues while
\ the company remains nOn-O1V1OenC
| payer. Its old bonds, however, shall
not be rendered Illegal and if after
| the expiration of the two-year period
| Boston & Maine complies for the fol
lowing fiscal year with requirements
of the law, it shall be regarded as
| having complied Herewith during the
period OF the failure. Additional is
sues of Boston & Lowell, Fftchbure
| and other leased roads bonds will re-
main proper purchases for the banks
Notwithstanding a Boston & Maine d.
| vidend reduction. AS separate cor
| porations themselves meeting all st1-
| pu1ations of the savings bank law
the status of the leased lines will re-
main unaltered.
| 1.-The Massachusetts savings institu-
tions own approximately one-third OF
| all Boston & Maine bonds-tha;t is, OF
| the road itself. The latest available
! figures showed this ownership to be
81, ,669, 900. Added to this the bonds
| of Boston & Lowell, Fitchburg, Con-
| necticut River, and other minor 1eas-
| ed roads, it will be seen that the
savings banks have very sizable
stake in the prosperity of the Boston
| & Maine system