New-York tribune., 1918-06-20
Money Needed to Meet
$57,735,000 Obligation
Maturing July l
Up to the Stockholders
Must Exchange Part of Pres
ent Securities for Three
Year Gold Notes

cially that it would, upon stipulated
conditions, make direct advance of
not more than SIT 1870 900 to the B. r. r.
to assist the company to meet the $751;
$4,000 OF its six-year per cent Sc
cured gold notes which mature on July
j of this year.
In return for this financial lift the
War Finance Corporation will receive
new thrce-year per cent secured gold
notes Of the b. R. r. at par. If tho
company meets the conditions laid
down the advances of money will be
made to banks as provided in Section
ct the War Finance Corporation.
Present Security Stands
The proposed advance, according to
statement issued by the War Finance
Corporation tonight, is conditional
upon the holders Of the Brooklyn Rapid
transit Company's notes now outstand.
ing consentlng 10 exchange not less
than 20 per cent Of the face amount
OF their notes for new three-year 2 per
cent secured gold notes of the company.
me new notes will be secured by the
collateral now deposited as security
Tor the present notes and by $29, 900 900
additional bonds of the r. r. T. Com
pany, 10 be issued under a consolidated
ana rcfundlng mortgage, recently ap-
proved by the stockholders of the com
pany.
The proposed plan, it is said, will en-
Iost the cooperation of the War
finance Corporation, the Brooklyn
hapld Transit Company and the hold
crs OF the maturing obligations, with
the expressed interest and approval of
'he controller of the City of New York
and the Public Service authorities.
Call to Stockholders
in announcing Yesterday that hold.
ers of the s57,735,0O0 Brooklyn Rapid
transit per cent six-year notes will
DC asked to extend their holdings for
ne" threc-ycar Z per cent notes the
company stated that the note indenture
Will provide that while the issue is out
standing no dividends will be paid "in
cash or IN any securities or scrip un-
less such security or scrip shall by its
terms rank subsequent to the rights Of
the holders of the notes as against any
Oh IT. the assets of the company"
Ihe official statement of the COM
pany, which made it clear that note.
holders may accept new notes in full
or ~ per cent as provided for under
the plan put forward by the War FL
nance Corporation, said:
referring to the statement of the
War Finance Corporation that it has
agreed to make an advance to the
Brooklyn Rapid Transit Company Of
not to exceed $17,320,500, equal to 30
per cent of the face value of it's matur-
ing notes, for three years at per cent
interest per annum on the condition
that arrangements be promptly made to
exchange the remaining 70 per cent OF
the notes for new three-year 7 per cent
notes OF the company, the Brooklyn
Rapid Transit Company states that a
circular is now in course Of prepara-
ton which will be sent to noteholders
during the next few days inviting them
to deposit their notes with the Central
Union Trust Company of New York un-
der an extension plan under which
noteholders will have the privilege Of
accepting for each $1,000 note either
(a) $500 in cash and $500 face value
OF the new three-year per cent Sc
cured notes, or (b) $1,000 face value
Of the new three-year 7'per cent Sc
cured notes.
Pledges Gold Bonds
The new notes are to be part OF an
issue limited to S57,735 900 to be se-
cured by the deposit of $57,735, 600 New
York Municipal Railway Corporation
first mortgage per cent bonds and
s39,0oo,O0o Brooklyn Rapid Transit
Company consolidated and refunding
mortgage ten-year 6 per cent gold
bonds.
"The indenture will provide that the
company will cause to be pledged there
under any additional Brooklyn Rapid
Transit Company consolidated and re-
funding mortgage gold bonds to an
amount equal at face value to ex-
penditures made out Of the current
surplus earnings Of the company for
capital purposes and for which the
company may be or becomes entitled
to draw bonds from the trustee as we'll
as any New York Municipal Railway
; Corporation first mortgage per cent
sinking fund gold bonds acquired by
The company with such current surplus
earnings. In order to conserve its
cash and to that extent to avoid the
sale of additional securities pending
the life of the new notes the indenture
will further provide that while the
notes are outstanding the company will
pay no dividends upon it's capital stock
in cash or in any securities or scrip un-
less such security or scrip shall by its
terms rank subsequent to the rights
Of the holders Of the notes as against
any of .he assets, Of the company.
"The plan has been approved by
Kuhn, Loeb & Co.. Central Union Trust
Company of New York and Kidder, Pea
body & Co., the bankers who placed the
maturing issue of notes and wfo rep
resent large amount thereof"
Professor Beard Balls