New Britain herald., 1915-02-19
ELLIOTT Il OUTLINES
 NEW HAVEN BILL
Before General Assembly Committee  N
 ON Railroads.

HAxtford, Conn.,. Feb 19-Presi- dent Howard Elliott of the New York
 Now Haven and Hartford Railroad d
 company, spoke before the legislative committee on railroads yesterday af- ternoon on bill under which his company seeks the right to pledge. sell or otherwise dispose of certain stocks in other corporations acquired
 under charter amendments in 1889
 and 1905 and now held in the com
 panyAs treasury. The stocks in oues
 tion are 62,378 shares of the Old Col ony Railroad company acquired be-
 fore 1905, and 34, 4,754 shares acquired since that date. making total of
 9S.1 132 shares and 5.2OO shares of the Boston and Providence railroad com pany. both being leased roads of the Now Haven company.
 Ban Broad in Terms.
 During the hearing, the point was raised by Senator Whiton, the com mittee chairman, that the bill was much broader in It's terms and asked for more authority than President Elliott explained his company wished --whtch was to clear up any possible legal doubt as to the right of the
 company to take the shares as free
 assets and pledge them as collateral for loans. Such loans can be obtain ! ed at rate of interest below that being paid on notes which are part of the coSnpany's floating indebted
 ness or the avails may be used to
 pay some outstanding notes.
 ss N was finally decided that coun
 sel for the company should draw up
 d substitute bill to meet the idea of the company, which was that specific auth ority to do certain acts should be
 granted rather than to give general authority to dispose of stocks of any company which 1t might hold.
 Charter Amendment.
 ga Under tho charter amendment of 1889. 1t was explained by counsel for the company, the right was gwen to acquire the capital shares of VarloAs railroads, the ultimate object pelng 10 permit the New Haven to merge subsidiary or leased roads into the system.
 Many properties were so merged. Tn the case of the Old Colony and he Boston and Providence roads the company acquired only a minority interest The stock under the law remains in the treasury and a doupt exists in the minds of counsel as to the right of the company to use tnls stock as a free asset and oHer IL as collateral. It is classed as slit edge" stock and money can pc DOT 9rowed on it at lesser rate than ary ,<@,. Il- lfott explained this point as being one of arit hmetic. Would Tide Company Over.
 If this stock can be used as col Ia teral for loans at five per cent, the I m oney can be used to call in paper outstanding on which seven per cent. interest is being paid The stock can De used as a factor in tiding over the company in it's present straits
 The company, has s53,000,OO0 in floating indebtedness part in pledges at hanks. part in notes maturing in EMay, 1915, and $20.000,0O0 in navl- cation companies notes due in May I1917 President Elliott said that the Hold Colony company's shares at the last quotation were worth probably about S14,719,S00 and at present they are simply treasury stock. If this can be hypothecated and floating indebtedness retired with the | money so raised, it means that the Rcompany has considera ble assistance and saves money. A temporary loan be available until conditions turn | for the better or until some general / {plan of financial rehabilitation is de-s lcided upon. The Old Colony stock 3has guaranteed dividends of seven per cent and the Boston and Provi- dcnce of ten per cent. The latter
 stock sells at about PIP a share. Stocks Part of Assets.
 Mir Whiton asked if the stocks were part of the company's assets and \ President Elliott replied that they were. He also said that there was
 no- Likelihood of the road selling these shares.
 Mr. Whton pointed out that MT. Elliott had explained what was spe- officially desired in the way of leglsla- ion and he (Whiton) thought tho bill ought to be equally specific. It referred to other shares in other cor porations, yet actually authority was wanted to pledge shares of only two ,.ompanies He had raised the Ques- tion, Mr. Whiton explained, because Connecticut has been criticized for l laxncsa in giving the New Haven