The Brattleboro daily reformer. (Brattleboro, Vt.) 1913-1955, 1918-03-28
1885,, 900 to Be Advanced
to Take Up Notes Which
Will Be Due April Is
EASY RATE MEANS
SAVING TO COMPANY
Terms of Loan to Extend One Year
Road to Pay Per Cent Interest and
Present Collateral Is Accepted by the
Government

Government.
WASHINGTON, March 2s-Direet-
or General McAdoo yesterday agreed
to advance S43,964.0 600 to the New
York. New Haven and Hartford Rail
road to protect collateral notes of this
company which mature April -.
Announcement of this decision was
made following q conference of a special
committee of the directors of the New
Haven system and officials of the rail
road administration The $43 ,96i,0o0
is to be lent for 10 months with inter
est at per cent a year with right
of renewal for one year more on the
same terms. The government will take
as collateral for the advance substan-
tally the same securities which are
now pledged to secure the notes out
standing and maturing April u.
In the agreement the right is re
served to the secretary of the treasury
to sell the collateral or any part of IT
at any time at such price as he may
determine and to apply the proceeds
! to retirement of notes.
/ The funds will be advanced from the
$500, coo appropriation carried IN
the railroad bin and the notes Will be
discounted through the federal reserve
hanks to keep the railroad fund liquid
The New Haven notes are secured by
the greater portion of the treasury as
sets of the New Haven system, includ
ing bonds aud shares of various sub
sidiaries and allied lines amounting tC
about sos, 600 600 par value.
Negotiations for government aid II
meeting the maturity of these one yea
collateral trust notes have been unde
way for weeks. Directors of the New
Haven and It's bankers said it woul,
be impossible to secure a renewal o
the notes and that sale of the collatera
would involve ruinous sacrifices IN tn
= present state of the market. Such
. course it was urged might result in dis
membermeut of the system ana 'f1rJur.
to the public interest. Efforts to NEE
. the maturity in other ways had no
f proved successful, though the stock
holders had authorized issue of pre-
u. fcrred stock. 1t was doubtful if tn
: amount could be absorbed this way.
The notes which the government ha
g agreed to take up are part of an issu
= of $40. 200, 600 brought out in Apr
4 last year by !. P. Morgan & Co. to +,
+ fund similar amount then outstanC
o ing. Since the notes were sold 50, 036
?, 600 have been repurchased in the ope
II market by the company OF the note
d still outstanding $20,000,000 are obi
| cations of the New England Navig'
n ton company, a subsidiary of the Ne
Haven. The rest represents the parel
: company own obligations.
In connection with the agreemel
e reached, the railroad administratiC
~ issued statement in part as follow
70 1.-The director-general has invest
a gated this subject carefully and HI
- given due consideration to past al
present records and earnings and to Il
future prospects of the New Have
te system, whose gross operating revenu
- for the calendar year 1917 amount
: to more than $85,O00,0 900, exclusive
Il earnings of several allied companies
st Realizing the high Importance
y maintaining the physical and financi
I'd integrity of this railroad system viii
n controls SO largely the entire transpC
tation facilities of several leading
dustrial states which are essential
the war making functions Of the I
ton and whose lines are already bel
H. taxed to perform service which is II,
. more important than ever, and havi
a proper regard to the security offer
,;a for the loan desired, the director Q,
-, eral has decided to extend the rel
.0 needed
~ "The rental which the New HAY
% system Will receive under governm,
:. control has not yet been definitely
certained, but it is estimated it v
amount to a sum sufficient to pay
--. Of the company interest, rentals q
other fixed charges, including inter
on this new note issue and yield a s.
stantial surplus each year during
period of government control VIII
viii be applicable to Improvements
other purposes.