Evening star. [volume] (Washington, D.C.) 1854-1972, 1914-01-10
Traders in New Haven Con-
vertibIes on New York Curb
Market Hard Hit.
GRANT OF BOND ISSUE
IS ANNULLED BY COURT
Sharp Break in Stock on Exchange.
No Excited Trading-Price
Subsequently Rises.

| NEW YORK, January 1O-Traders on
| the New York curb market today saw
| s2U.OO0 vanish in thin air. Paper profits
| estimated at this amount disappeared
outright on account of the refusal of the
Massachusetts supreme court to permit
| the New Haven Railroad Company to
issue 100000 convertible bonds.
According to the custom on the Grub
trading in these bonds began as soon
| as the company announced 1t would issue
them. They were bought and sold
when as and if issued the seller of the
bonds guaranteeing to the buyer to make
delivery when the securities actually
were issued. The New Haven converti-
bles were popular issue from the start,
and there was heavy trading in them at
about 102. Later these bonds "when
issued" We're transferred to the New
York Stock Exchange. where the price
rose to 10. The transac actions there ag-
eregated more than s24OO0,OOO.
The decision of the Massachusetts court
nullified all contracts and the paper
profits of traders IL result of the rise
in the quotation went glimmering. One
curb broker today displayed contracts
for the New Haven convertibles which
he said represented profits of $4,000 He
tore them up with a grimacc.
Sharp Break on Exchange.
On the stock exchange there was a
sharp break in the New Haven stock.
1t opened down 81 points at T3 Not
withstanding the extent of the break,
there was no excited trading, and the
price subsequently rose above 10. The
low price in the history of the COM
rnnn
dividend was passed, was 6Sss. The old
convertible per cent bonds rose 55s
points.
A member of the firm of ]. p. Morgan
q Co. said today that as far as his
house was concerned no arrangements
short-term notes which fall due in May.
There was report from Boston that
the Morgan company and two Boston
houses had agreed upon an extension Of
the notes for three years. 1t was further
stated here, however. that no guarantee
for such an extension had been given,
and that Morgan & Co. would take no
definite action at present, certainly not
before some time next week.
Grant of Bond Issue Annulled.
4 BOSTON, January 10-The public serv-
ice commissions order consenting to the
issue by the New York, New Haven and
Hartford Railroad Company of SCI, ,700,-
OGO of conertible debenture bonds was
annulled yesterday by the supreme
court, which declared approval of such
an issue was beyond the authority Of the
commission. The proposed bonds car
ried an option of exchange for stock at
par after five years from date
The approval by the commission of an
issue of stock must relate to the present
and not to a remote future the deci-
sion reads.
limits Commission authority.
THE amount of stock which the COM
mission intelligently can approve to be
issued is inseparable from the price at
which it is to be issued. The price at
| which public interest may require that 1t
| may be issued during a period of ten
years, beginning five years hence, is
! Impossible of ascertainment now. But
the approval of convertible debentures
| with the right to take stock at par in
payment during that period involves fix
| ing price of the stock during the like
period.
Affords No Security.
An order entered now that stock be
issued at par during that period of time
| can afford no security that the corpora
ton will get an adequate return for it's
stock, or that the rights of other stock
holders will be guarded properly
Counsel for Morgan C.. Bulkeley, for
others started the proceedings in opposi-
=; 10