The Bridgeport evening farmer., 1915-01-28
New Haven Managers
Want Blanket Powers
Continued frorn PAGE one

zone very desirable method of rails
ing the money needed would be for
the stockholders to buy new issues of
common or preferred stock, and with
the proceeds of such issues pay off
the floating debt, thus supporting
their own property. The showing
made by the property and the COM
plications surrounding it during the
past two years, are such that any in
crease of common stock at this time is
out of the question. The issue of
preferred stock is a desirable method
when practicable, but it is not clear
that the right exists, under present
laws. Connecticut gives the right, but
there is doubt whether Massachusetts,
gives it to railroad corporations. This
doubt has been removed by recent
Massachusetts Legislatures as to
street railway, gas and electric light
companies. There is also some un-
certainty in this respect under the
statutes of Rhode Island. It is now
important, therefore, to have the laws
made clear so that steam railroad
companies can issue preferred stock
as a means .Sof raising money if mar
ket conditions justify.
Another plan would be to convert
the floating debt into long time
mortgage bond carrying a much low
er rate of interest.
Although there are no mortga ge
bonds outstanding on the main line
of the railroad from New York to
Providence, and from New Haven to
Springfield, except $3.50, 900, between
New London and Providence, never
theless, the company cannotN pay it's
obligations by an issue of bonds Sc
cured by a mortgage because Of lin
itations and conflicts in the laws of
the States Of Massachusetts, Rhode
Island and Connecticut. Massa chu-z
sets permits the issue of mortgage
to twics the amount of capital stock
and premiums actually paid in while
Connecticut limits the amount of
mortgage to one-half the amount ac-
tuaI1y expended on the railroad. I'm
der this limitation no mortgage could
be issued which would take care of
the outstanding obligations necessary
to be included, to say nothing of the
floating debt and additional neces-
sites of the railroad. As the gem
era1 laws of Rhode Island do not spe-
officially auth orize railroad MORTGAGES
Ven's right to mortgage property in
that state
Under existing Massachusetts, law,
any mortgage made by the New sHa-
ven Company must secure the bonds
| of other railroad companies now a
part of the New Haven system. which
are already amply secured by first
mortgages on the property of those
roads and manifestly should not
have the additional security of any.
/
\ main line of the New Haven.
doubt exists as to the actual
amount of outstanding capital stock
recognized by the State of Massachu-
sets owing to the fact that when
the New Haven securities were validat-
ed by the report of the Valuation
Commission in 1911, stock issue was
authorized and subscribed for but
1 only the amount then paid in wasgval-.
idated. Legislation to validate the
total amount paid in is obviously nee
essary.
's.The plan suggested for financing
would be materially improved if in
! Massachusetts the New Haven were
| given the right to acquire its leased
lines upan terms satisfactory to the
/ Commonwealth and to the respective
/ stockholders of lessor and lessee lines
There are some minor conditions
and Inconsistencies, such as a require
ment in Massachusetts, for the issue
| of fractional shares, and a prohibition
] of the same in Connecticut.
! 1.-The Public Service Commissions of
New England, recognizing the i'm
lportance of sound plan for the issue
of railroad securities have been Civ
ling the subject much time and
thought. Sitting in joint sessions,
they have invited the attendance of
representatives of the railroad and
the public and have asked their views.
| Tt is expected that the legislatures of
the various states will have the bene-
fit of their recommendations, and as
a result of these conferences, the leg
islatures will be asked to pass the
laws needed to bring about harmony
and to remove unnecessary restric-
TONS
s'This week the necessary bills will
be introduced at Providence and
Hartford. In the near future, when
the Massa chusetts Commission makes
its report to the general court. the
II necessary bills will be introduced at
/ Boston.
''By the passage of these bills the
credit of the New Haven Company
viii be strengthened and the owners