The Bridgeport evening farmer., 1915-02-18
R. R. PLAN FOR BONDING SUCKED. BY MIR. BUCKLEY Former Governor Says Scheme Involves Virtual Repudiation of Vast Debt BAY STATE BLOCKS
 UNsUPERvIsED DEBT Elliott Asks for Right to Sell Certain Securities Owned
 By Company
Especial to The Farmer.)

Special to The Farmer.)
 F7artford, Teb. 1e-President How ard Elliott and other officers of the New Haven Company pleaded before the committees on railroads, today, for the p1n permitting the railroad to in crease it's deft. or for the bill permit ting the sale of certain securities own ed by the company.
 Tie bili in it's present form was op- posed, yesterday afternoon, by Morgan G. Bun1ey, former governor of Con nect1cut. principally because the crea- ton of an additional debt as prop poseds will withdraw the security that sup ports a Issue of some $19 100000 mortEage bonds of the Providence Se- cnrities Company. These bonds are debentures which take precedence i over stock. but which would not take precedence over a debt supported by dxst mortgage
 There is a prospect that the New Haven company will not get the pow CT to Issue these bonds without SUI perv1s1on by the pubic utilities com na1aston
 It Is likely that the policy advocat- ed by The Bridgeport Farmer. dur ing several years, will be applied and thaE power will be given to the Util-5 itdes Commission to supervise the is sue Of the proposed securities
 IF this adjustment is reached, 1t VIII not be due to the providence and but to the circumstance tha4 Massa- chusaEts will refuse to sanction any ether procedure, and Connecdcuts 8 permission Do issue the bonds would If tho permission of MaSsach husetts were withheld.
 Former GovEnor Bulkeaey suggest ed to the comnntssion that provision ought t0 be made for a sinking fund, to rsEzre the debt at it's maturity.
 1 EElkott. this afternoon. explain cd tIaat the New Haven road has over 8SO.0o0. 900 of obligations coming due within a year and half. He pointed out that the directors thought it nec- eAaxy in view of the generally dis tuxbed conditions of business and es- peciaIIy the present condition of the New Haven road to have made avail able 6or disposition the stock the company holds in leased lines. The most important of these lines are the Boston & Providence, of which the company holds S59 shares and the Oad Colony ra1lrOad in which it holds SS,818 lsnare2
 nr EH9Ott told the committee that if t1aese stocks could be sold the money could be used in paying of the interest charges on large amounts of outstanding obligations
 
 financial advantage of the road fn it's general scheme for upbuilding the properties.
 1zr Robinson explained to the committee that the petition sought to make clear the sconnpany's legal right to dispose Of stock it holds in s1hst- diary Hne& He said there was some doubt as to the connpany,s night to sell these stocks because of it's char ter provisions and was meant to clear up the cfouded situation
 EN1E4 R. R. BONDS Ill.,.
 The railroad was represented al the hearing by Vice President E. G. BuckIand, Benjamin I. spock, their general counsel, and La1cfus F. Robin son Of Hartford. The bond issue plan ned will be in the form of first mort gage on the main line of the road, which fs at present unmortgaged.
 The bill up for hearing before the railroads committee would give the railroad authority to issue bonds to flae value of twice it's capital stock me bill further provides that @any z1oxt8age hereafter executed by a rai1- road or street railway corporation shah secure all it's outstanding bonds, de bentures, notes or other evidences of Indebtedness previously issued by such Corporation, or assumed by snch cor sporation through merger of any other steam or street railway company ex-
 
 notes or other evidences of indebted ness secured by direct mortgage, or secured by collateral in the hands o1 a trustee, and except contingent uabil- 1tfes upon which such railroad or street railway corporation is liable only as a gJarantor or endorser.
 Basis of Objection
 t was upon thds latter clause that Senator BuIke1ey based his objections The Providence Securities company was the holder of the street railway lines about Providence, R. l. The New Haven took over this company guar anteeing the outstanding bonds There are now no assets to this company, as the property was taken by the New Haven, and the only value of the bonds lies in the New Haven,s guarantee Senator Bulkeley claims that if the other indebtedness of the road is tc be secured by mortgage, the Provi- denee Securities bonds should also be secured in 8 similar manner.
 BuckIand Opposes
 Vice President Buckland claimed that this would be an unfair condition as the bond holders of the Providence Securities never expected to be se- cured by q mortgage when they pur-
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