Harrisburg telegraph. [volume] (Harrisburg, Pa.) 1879-1948, 1914-07-31
Passing Impressions of Finance
By H. L. Bennett

whereby the collateral bondholders
were asked to part with a third of
their equity. has fallen through, and
1t is now expected nothing further will
be done to bring about a reorganiza-
ton until late in the Fall. The pro-
tective committee acting for the col
lateral hondholderS comedies 1t does
not represent the majority of the
bonds, which is but another way of
saying that not enough of the bond
holders cared to tie up their collateral
with the committee to make it's plan
feasible, and 1t is o inviting further
deposits, declaring that any future
plan will include the full right to the
collateral bondholders to nance the
property and put it on its feet. This
is as it should be, for they are entitled
to their collateral in default of in
terest and should not have outsiders
endeavor to shave its value, as was the
case in this instance.
More important to the New Haven
shareholders in it's final influences,
than the government suit seeking the
dissolution of their railroad, is the ac-
ton taken in behalf of a large body of
New England stockholders seeking to
recoVI for the company the large
amount of money it is charged the di-
rectors unemployed, and wasted.
Most of the directors are among the
country's wealthiest financiers, so that
- - h6ohAAD NllVlll
the New Haven could get the money
awarded by the courts. A number of
similar cases have been tried before,
most of which turned out in favor of
the mulcted shareholders. The case
of the old directors of the American
Malt Company proved a landmark in
this form of recovering corporation
loot, as they compromised for some
thing like $500, 600 at the time. They
We're charged with paying unearned
dividends to boost the market price
of the stock.
All our financial scandals have con-
tributed largely to the broad municipal
bond market. People who are timid,
or do not even wish to invest funds in
scandal free securities of the better
grade, have turned their attention to
standard municipal bonds and, on ac-
count of the extraordinary demand,
these issues are selling above any fig
ures they could command If conditions
surrounding them were normal. No
abatement in the demand for good
municipal bonds is looked for among
dealers for some time.
August l draws ear, n for the
Gould roads, which have been under
strong fire, the day is a fateful one.
for it will determine for some of these
roads, whether they will continue as
solvent properties or whether their
future requirements and financing will
be worked out under the protection of
the courts and with the professional
services, at high fees of protective
committees, as they are now organ
lied in the financial section.
When Mr.. Ramsey, the eX-president
of the Wabash Pittsburgh Terminal
Railroad Company, until he had a fall
ing out with George Gould, asked
Samuel Untermyer why So, 600, 900 was
needed for the road, the attorney, who
YArt1ng him Golf nc a nhnr ~ Itnn 30 fhA
minority stockholders, answered to
pay the expenses of the protestive
committees, for one of which he has
counsel. l merely mention this Incl
lent to illustrate hat with such high
fees we all a o fighting clothes
and take up the gauge for the ''vox
populi, as 1t is a very profitable cham
pionShip.