The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-19
PREPARED TO ISSUE
EQUIPMENT TRUSTS
National Railway Service
Ready to Put Out Certifi-
Gates for S60,000,000.
TWENTY ROADS APPLIED
S. ID. Warfield Describes Meth
DDS of Company in Pur-
chases and Financing.
TWENTY ROADS APPLIED

The National Railway Service Cor
poration announced yesterday that 1t
was ready and prepared to issue $780,
o00,oOo of It's trust certificates for the
purchase of equipment to be supplied
to railroads, and the announcement
enumerated the following roads as Eek
pected to be included in one or other
of the two methods of financing out
lined by the corporation: Baltimore
and Ohio, Chicago. Rock Island and
Pacific Bangor and Aroostook, Mime
apols and st. Louis, Wheeling and
Lake Erie. Gulf Coast Lines and Gin
cinnati Indianapolis and Western. The
equipment desired by those roads COM
prlses locomotives and freight cars or
various classes, the cost approximate
ing $40 100000.
S. Davies Warfield. president of the
corporation. said yesterday that car
riers other than those provided In the
series in contemplation were In negotia-
ton with the corporation for equip
ment. Twenty railroads. he said, have
applied for equipment at an aggregate
cost, If supplied. of $125,0oo,000. The GER
tificates to be issued are in two series,
not to exceed $30.o0o,0oo each, maturing
in fifteen years. Seven railroads or
systems. enumerated above, are thus
provide two distinct methods under
which the roads obtain equipment.
The trustees of the service corpora
ton, now numbering eight. but later to
be extended to twenty, are:
Haley Fiske, president of the Metro
politan Life Insurance Company OAR
win P. Kingsley, president of the New
York Life Insurance Company John j.
Pulleyn, president of the Emigrant In
dustrial Savings Bank and president OF
the Savings Bank Association or the
State Of New York; Myron t. Herrick.
Cleveland, president Of the Society FOR
Savings; George M. Brook Boston
president of the Home Savings BanK
and chairman of the National Confer
ence of Mutual Savings Banks OF the
country; w. w. McClench. Springfield,
Mass. president Of the Massachusetts
Mutual Life Insurance Company Louis
r. Butler, Hartford, Conn.,. president OF
the Travellers Insurance Company; ).
Davies Warfield, Baltimore. president OF
the Continental Trust Company and
president of the National Association OF
Owners of Railroad Securities.
In a statement issued yesterday 5.
Davies warfield described the methods
and conditions Of equipment purchase
and financing as follows:
ARRANGEMENTS are being compieteo
for the initial issue of the Service Cor
poration's trust certificates In TWO series
renresenting the two distinct methods
under which railroads secure equipment
~. The conditional sale basis, series
No 1 under which a railroad may pur-
chase equipment in thirty semi-annual
oavrents. the title remaining In the
service corporation until all payments
are made payments by carriers on prin-
cipal being charged to their capital ac-
counts The other method Is the lease
basis, series A, under which carrier
may lease equipment from the service
corporation in thirty semi-annual rental
payments. with interest, charged largely
10 operations, but ultimately acquiring
the equipment IL and when all payments
ore made. The Bankers Trust Com
pany of New York is trustee of series A.
lense basis. and the Guaranty Trust
Company Of New York trustee OF series
No. 1, conditional sale basis.
ION the condition sale basis carriers
make q cash payment on account or
their equipment or deposit collateral
securities agreed upon In each case;
on the lease basis a nominal amount
of collateral securities may be depos-
tied. On the lease basis the lien OF the
service corporations certificates ex-
tends to the equipment of all of the
carriers to the full amount of that
series. The railroads are not required.
however, to make direct payment for
any carrier in default. In the condi-
tional sale basis the lien on the equip
ment acquired by each carrier Is linz
tied to the purchase price or It's
equipment. 1t is provided In the trust
agreement that in the event of a de-
fault in either series the service corpo-
ration may apply to the Interstate Com
merce Commission for general order
concentrating or diverting the use OF
the equipment of defaulting carrier
to other railroads. The corporation
NAV also sell or lease such equipment
to other roads. In both series at the
expiration of fifteen years, provided all
conditions of the trust have been met,
the equipment condtionally purchased
or leased will become the property of
the respective carriers"