New-York tribune., 1918-06-01
marlborough Asks
War Finance Board
For $37,700,0ooLoan
Directors of Corporation
Rule Against Direct Ad-
vance to Big Utility

simultaneously with the announce
ment yesterday that the 1nterborough
Rapid Transit Company had made ap-
plication to the War Finance Corpora
tion for loan of $37,7oo,0oO for three
years, it developed that the New Or
leans Railway and Light Company, an
other public utility concern, had been
refused direct assistance by the War
Finance Board, which issued a ruling
to the effect that "the resources of the
War Finance Corporation are not in
tended to be loaned directly to war in
dustries, but only indirectly through
the banks" The New Orleans COM
pany sought funds from the government
900 of two-year 6 per cent gold debent-
ures, which matured to-day
The action of the Federal authorities
in the case of this concern gave rise in
Wall Street circles to considerable
speculation as to what would be the de-
cision in the matter Of the loan asked
by the Brooklyn Rapid Transit Com
pany to refund a s57,ooo,ooo note ma
turity on July 1, and also the applica-
tion Just made by the Interborough
Rapid Transit Company. The applica-
tion Of the Brooklyn Rapid Transit
Company has been before the War FL
nance Corporation for week or more.
1t is proposed by the Interborough
Rapid Transit Company to secure the
loan which it has requested from the
War Finance Corporation with the de-
posit of $50 ,489 900 of first and refund
ing mortgage 5 per cent bonds of the
1nterborough, which are now held in
the Treasury, permission for the .jssu-
ance of which already has been granted
by the Public Service Commission of
New York. At the time the commits
sion granted permission for the
issuance of these bonds it stipu-
lated that they should not be sold
at less than 93h. The purpose of the
loan asked from the government is to
provide the company with funds for
the completion of the new subways now
under construction. At the present time
the company is short of cash because
of the large amounts in the construc-
tion programme, much more cash being
needed than was originally expected,
owing to the higher wages of labor
higher: costs of materials and the build
ing of additional mileage. The company
early this week was compelled to re-
duce it's dividend from 20 to 10 per cent
a year, it being stated at the time that
this step had been found necessary in
order to conserve cash. 1t is expected
that several weeks will elapse before
the War Finance Corporation renders
a decision on the Interborough's loan
application.
way and Light Company which has
just been refused a direct loan by the
War Finance authorities, the directors
have been compelled to ask the holders
of the 6 per cent debenture bonds ma
turing to-day to consent to an extern
sion of the principal. The interest will
be paid on presentation of the coupons.
according to D. D. Curran, president.
The failure of the War Finance Cor
poratlon to aid the New Orleans COM
pany apparently came as a surprise, for
at the hearings the company's show
ing was said to have been satisfactory.
In its statement issued in connection
with its ruling on this particular appli-
cation the War Finance Corporation
said:
"Holders of maturing obligations,
whether of public utilities or of other
concerns, which may find themselves
unable, because of temporary coidi-
tions, to meet their payments punctu-
ally. should consider whether in the
public interest, as we'll as their own,
they should not cooperate by consent
ing to reasonable renewals. Public
utility companies, particularly in CO.
oneration with the communities in
which they operate, should have the op-
portunity of adjusting themselves to
the changed conditions brought about
by the war.