The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-03-28
j. WILL LEND
$43,964,0O0 TO
THE NEW HAVEN
McAdOO Agrees to Advance
Amount to Cover Notes
Due April Is.
TERN OF LOAN ONE YEAR
Road to Pay 6 Per Cent. In
tereSt-Prcscnt Collateral
Accepted.
TERN OF LOAN ONE YEAT
Special Despdfch to THE SrS.

WAsH:SG-oN, March 81. Director.
General McAdoo to-day agreed to ad-
vance s439S. 600 to the New York. New
Haven and Hartford Railroad to pro-
tect collateral notes OF ths company
which mature April IS.
Announcement OF this decision was
made following a conference of special
committee OF the directors OF the New
Haven system and officials of the Rail-
road Administration. The $439S4. 900 Is
to be lent for twelve months with in
terest at 6 per cent. a year, with right
of renewal for one year more on the
same terms. The Cove: nrlent will take
as collateral for the advance substan-
TALLY the same securities which are now
pledged TO secure the notes outstanding
and maturing April Is.
In the agreement the right is reserved
to the Secretary OF the Treasury to sell
the collateral or any part Of 1t At any
time at such price as he may determine
and to apply the proceeds to retirement
OF notes.
$500, 100000 appropriation car. led in the
| railroad bill and the notes will be dis
! counted through the Federal reserve
banks to keep the railroad fund liquid.
TIE New Haven notes are secured by
| the greater portion of the treasury as
sets of the New Haven system. includ-
| ing bonds and shares Of various sub
salaries and allied lines amounting to
about $95.0OO,00O par value.
Unable to Renew.
Negotiations for Government aid in
meeting the maturity Of these one year
collateral trust notes have been under
way for weeks. Directors OF the New
Haven and Its bankers said II would be
impossible to secure renewal Of the
f; notes and that sale of the collateral
| would involve ruinous sacrifices in the
| present state OF the market. Such a
course 1t was urged might result in dis
memberment Of the system and Injury
to the public interest. Efforts to NEE,
! the maturity in other ways had not
proved successful though the stock
holders had authorized an issue OF pre-
ferred stock. II was doubtful II the
amount could be absorbed this way
The notes which the Government has
| agreed to take up are part Of an issue
of $i5.0O0.000 brought out In April
last year by J. p. Morgan & Co. to re-
! fund similar amount then outstand-
ing. Since the notes were sold $c.036.0OO
have been repurchased in the open mar
ket by the company. OF the notes still
outstanding $20,000.00 are obligations
of the New England Navigation Com
pany. a subsidiary Of the New Haven.
The rest represents the parent company's
! own obligations.
McAdOO's state ement.
In connection with the agreement
! reached to-day the Railroad Admins
/ tration issued statement In part as
| follows:
! ''The Director-General has investi-
gated this subject carefully and has
! given due consideration to past and
present records and earnings and to the
! future prospects of the New Haven sys-
TEN. whose gross operating revenues for
| the calendar year 1917 amounted to
| more than $S5,000,000, exclusive Of
earnings of several allied companies.
Realizing the high Importance CT
mainta ming the physical and financial
! integrity of this railr6ad system which
| controls SO largely the entire transporta-
tSon facilities Of several leading Indus
| trial States which are essential 10 the
war making functions Of the nation and
whose lines are already being taxed to
| perform service which Is now more
! important than ever. and having proper
| regard to the security offered for the
| loan desired. the Dlrector-C;cneral has
! decided TO extend the relief needed.
"The rental which the New Haven
| system will receive under Government
| control has not yet been definitely ascer-
| ta,ned, but IL is estimated it will amount
to a sum sufficient to pay all Of the
COMPANY interest, rentals and other fixed
! charges, including interest on this new
note issue, and yield substantial sur
plus each year during the period of Gov
ernmcnt control which will be applicable
L II Ian