Norwich bulletin., 1913-10-15
Issue of Bonds
 Meets Approval
PETITION OF NEW HAVEN ROAD
 IS GRANTED
A DISSENTING REPORT
One Member of Massachusetts Public Service Commission Considers It Illegal and Void and States Reasons.

Boston Oct 1.-The public service commission today approved the pro- posed issue of $67, ,552, 900 of six per- cent convertible debenture bonds by the New York New Haven and Hart ford Railroad company.
 The commissions order, which granted the petition of the company in every particular, was signed by four members, Frederick J. Macleod, chairman; Everett E. Stone Clifton White and George H. Bishop. One member, George W. Anderson, dissent ed, and filed lengthy minority re- port, saying:
 that the order voted by .the majority of the commissioners is not, on at least three grounds, illegal and void.'' Prerequisite to Improved Transporta-
 ton Conditions.
 By it's approval, the commission makes it possible for the New Ha- ven road to fund it's floating debt amounting to S40,023,750, to pay $6,- 0OO000 of the funded debt, and to pro- vide money for new equipment and for improvements.
 The commission discussed the eff feet that adverse action on the pe- tition might have had on the company by forcing it "to the hazard. of ne- gotiattng within the next few weeks short time notes for forty or sixty millions of dollars" and then said:
 The placing of the company's A. nances upon g. stable basis is, in our judgment, an esential prerequisite to the improvements in transportation conditions which are so urgently de- manded by the public, and for which we are disposed to look hopefully towards the new management of the company if it is given a reasonable opportunity to work out a constructive plan for the rehabilitation of the rail- road properties'
 Its Lesson Will be Heeded.
 After quoting from the recent re- port of the Interstate Commerce com mission to the effect that the New England Railroad situation needs rest an opportunity for instructive work and public support the public service commissions report continues:
 'The sins and shortcomings of the company in the past have brought about their own -retribution. The company has received a stern admoni- tion that it cannot proceed in defiance of law and public policy without the risk of disaster. We believe that this lesson will be needed and that further recrimination upon the conduct of the company in the past can serve no use ful purpose but. on the contrary, is likely to increase the losses. already sufficiently heavy, sustained by inno- cent stockholders and to impair still further the transportation facilities so vital to the business prosperity of the state"
 Anderson's Dissenting Report.
 After expressing doubt as to the legality of the order Commissioner Anderson says in his minority report:
 "Tf the order is illegal, dire con fusion, great injury to the corporation and much loss to innocent investors will be the probable result. Apart from it's illegality, the order seems to me with the public interest in matters of vital and far-reaching importance.
 '"rhe deplorable condition of this railroad at the present time is due to persistent violations of the wholesome provisions of our Massachusetts laws. The enormous losses already suffered red had the law of Massachusetts been observed"
 The Legal Objections.
 The opinion then deals with the purely legal objections to the issue, which MT. Anderson states to be:
 "1 The company has not sufficient amount of outstanding capital stOGll, legally paid in. under massachusetts, law to authorize the proposed issue.
 The cOmInlSSlOn mas no legal power to authorize the issue of deben- lures convertible into stock in the future.
 "9 The issue is made available to holders of outstanding debentures in violation of the statutes of this com monwealth.
 "A It is impossible to find that the floating debt sought to be funded was properly incurred for lawful pur- poses without absolutely disregarding the material facts"
 MT. Anderson also attacked the con tract for underwriting the issue.
 The dissenting opinion closed with two suggestions:
 Anderson's Suggestions.
 "First-That application should be made to the next legislature to vali- date the outstanding capital stock and premium account, thereby furnish ng 9 clear legal basis for the issuance 1f debentures needed for steel cars and other necessary additions to the equipment,
 ''Second-The present floating debt should be paid from the proceeds of securities which should be sold from lime to time.'
 o'RRlEN